Secretarial practice 1828236004
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DirTC (F FourtH EDITIiO! i912 1923 i924 2925 326 C7 g=& 5 PRINTED IN ENGLAND Preface to Fourth Edition THE Companies Act, 1929, which consolidates the law relating to companies in Great Britain and embraces the new statutory requirements of the Companies Act of 1928, has necessitated a new edition of the Institute Manual, the third edition of which, prepared, as were the previous editions, by Judge Shewell Cooper, was published in 1924. The preparation of this fourth edition has been undertaken on behalf of the Council by Mr. Lionel Leonard Cohen; K.C. The complete recasting of the sections of the Consolidation Act of 1908, which has been made in the statute of 1929, has necessarily involved a good deal of revision. In addition, the new law has entailed some rewriting of the text in the last edition and the amplifying of certain other portions. Recent legal decisions of importance have also been included. A chapter has been added on Offers for Sale and kindred matters, while the chapter on Audit has been expanded in view of the new statutory requirements relating to balance sheets, profit and loss accounts and audit. There is also a new chapter dealing with the position of foreign companies (i.e. companies incorporated outside Great Britain) establishing a place of business in this country. The special features of the earlier editions have been retained and in addition to the text of the Companies Act, 1929, there is included among the appendices, the Companies (Forms) Order, 1929, and extracts from the Companies 'Winding-up) Rules 1929 relating to Voluntary Winding-up. The Model Forms in current use in company practice have been extended and revised. The summarised particulars of statutes regulating companies in Canada, South Africa, Australasia and India have been amplified considerably by detailing the main differences detween the law operating in those countries and in Great Britain. I'he Council and its “Secretarial Practice” Committee acknowledge their indebtedness and extend their thanks to Mr. Lionel L. Cohen, K.C., as well as to Mr. Harry M. Cohen, of Messrs. Linklaters and Paines (the Institute's solicitors). They are also indebted to Mr. T. D. D. Divine of Lincoln’s Inn for his assistance in seeing the book through the press and preparing the general index and the index of cases. W TARKER, President. W. hk. STENTIFORD, Chairman. * Secretarial Practice’ Cowiitlen [HE HALL OF THE INSTITUTE, LoNpoN WaLL, LoNDoN July, 1030. Contents CHAPTER I. COMPANIES IN GENERAL - iI. THE REGISTRATION OF COMPANIES {II. THE MEMORANDUM OF ASSOCIATION IV. ARTICLES OF ASSOCIATION - V. CAPITAL AND SHARES VI. PROSPECTUS AND ALLOTMENT VII. OFFERS FOR SALE AND KINDRED MATTERS VIII. TRANSFER AND TRANSMISSION OF SHARES IX. OTHER MATTERS RELATING TO SHARES - X. SHARE WARRANTS - - . XI. NOTICES - XII. MEETINGS OF SHAREHOLDERS XIII. DIRECTORS : XIV. RESOLUTIONS - - XV. ACCOUNTS XVI. BALANCE SHEET AND AUDIT XVII. DIVIDENDS - XVIII. MORTGAGES, DEBENTURES AND RECEIVERS XIX. RECONSTRUCTION AND SCHEMES OF AR-RANGEMENT - - XX. WINDING-UP XXII. POWERS OF ATTORNEY XXII. PrivATE COMPANIES XXIII. StATUTORY COMPANIE: XXIV. ScortisH COMPANIES XXV. ForeiGN COMPANIES XXVI. INncoME Tax 1 ITS TRADING COMPANIES XXVIII. AGEND.. .ND '"Kl.ir XXVIII. TILING XXIX., SiraMp urs PAGE I 6 io 20 3I 44 58 62 9I 110 119 128 142 158 165 177 186 193 209 226 271 288 295 306 315 321 333 AT Vv CONTENTS Appendices PAGE A TABLE OF STAMP DUTIES AND FEES, AND INLAND REVENUE CIRCULARS RELATING TO STAMP DUTIES - ~ B. DOCUMENTS TO BE DELIVERED TO THE REGISTRAR oF COMPANIES UNDER THE COMPANIES ACT, 1029 ~ C. PENALTIES UNDER THE COMPANIES ACT, 1029 -D. Stock EXCHANGE REGULATIONS AS TO OFFICIAL QUOTATION AND PERMISSION TO DEAL IN New SECURITIES = - 379 399 402 A122 E. Some NOTES CONCERNING THE PARIS STOCK EXCHANGE, ETC., AS RELATING TO COMPANIES ISSUING SECURITIES NEGOTIATED THERE -F. Forms = - - G. Companies (ForMs) ORDER, 1929 - - H. Text oF COMPANIES ACT, 1929 -J. REGISTRATION OF BUSINESS NAMES ACT, 1916 -K. CoMmPANIES (WINDING-UP) RULES, 1929, SO FAR AS RELATING TO VOLUNTARY WINDING-UP - - 803 L. Finance Act, 1927, SEC. 55, AS AMENDED BY FINANCE Act, 1928, SEC. 31 =~ - '- - 813 M. SECTION 74, LAW OF PROPERTY ACT, 1925, -- 817 N. COMPANY LEGISLATION IN THE BRITISH DoMINIONS OVERSEAS - 819 TABLE OF CASES INDEX - SECRETARIAL PRACTICE CHAPTER 1 COMPANIES IN GENERAL THe word ‘Company’ throughout this book generally means a body incorporated under some one or more of the Acts of Parliament which relate exclusively to companies in general. This phraseology of daily life happens to accord, with substantial accuracy, with the definitions in the Companies Act, 1929. S. 380 of that Act defines a company as a campany formed and registered under that Act, or an existing company; whilst an ‘existing company’ means any company formed and registered under the Joint Stock Companies Acts, the Companies Act, 1862, or the Companies (Consolidation) Act, 1908, which was not registered under such Acts in Northern [reland or the Irish Free State. The Joint Stock Companies Acts are defined to mean the Joint Stock Companies Act, 1856, and certain other Acts before 1862; but the expression does not include the Joint Stock Companies Act, 1844, under which Act companies were first empowered to become incorporated, although without limited liability. The right to register with limited liability was first conferred by an Act of 1855, which was replaced by the codifying Act of 1856, mentioned above. It must not be overlooked, however, that there are two important classes of companies or corporations to which neither the Joint Stock Companies Acts, nor the Companies Act, 1929, have any direct relation. The first of these are associations incorporated by royal charter, of which the British South Africa Compary and the Trust and Loan Company of Canada may be taken as examples. The other class comprises that large body of companies incorporated under special Acts of Parliament, generally for the purpose of working some undertaking of a public nature, e.g. railway companies, gas companies, dock companies, and the like. Companies of this class are commonly described as Statutory Companies. They are dealt with specially in Chapter XXIII. SECRETARIAL PRACTICE It must further be borne in mind that companies incorporated in the Irish Free State are only subject to such of the provisions of the Companies Act, 1929, as apply to companies incorporated outside Great Britain and (sec. 384) that companies incorporated in Northern Ireland are subject only to the same provisions and to such of the other provisions of the Act as relate expressly to companies incorporated in Northern [reland. No act altering the company law has yet been passed in Northern Ireland and accordingly the law in force is the Companies (Consolidation) Act, 1908, as amended by the Acts of 1913 and 1917, and subject to any express provisions in the Companies Act, 1929. It is believed that an amending Bill will shortly be introduced on the lines of the Companies Act, 1928, and if passed will be followed by a consolidation Act on the lines of the Companies Act, 1929. In the meantime, the 1927 edition of ‘Secretarial Practice’ will afford the best glide to secretaries of companies in Northern Ireland. Companies The vast majority of companies are, however, companies Act, 1929. to which the provisions of the Companies Act, 1929, apply. This Act has arisen out of the report of the Committee presided over by Mr. Wilfrid Greene, K.C. Asa result of that report an Act was passed in 1928 making many important alterations in company law. The modifications were so substantial that it was considered undesirable to bring most of the provisions of the 1928 Act into force until the Companies Acts had again been consolidated into one Act. Accordingly only ss. 53 and 92 and so much of the third schedule to the 1028 Act as repealed s. 45 of the Companies (Consolidation) Act, 1908, were made operative. Consolidation has now been effected by the Companies Act, 1929, and as that Act came into force on the Ist November, 1929, the remainder of the Companies Act, 1928, only came into force contemporaneously with the Companies Act, 1929. As the last-mentioned Act repealed the Companies Act, 1928, it will be unnecessary to refer to any of the sections of the 1928 Act. The draftsman has taken advantage of the consolidation to effect a more logical arrangement of the sections. This re-arrangement will undoubtedly assist students; but practitioners familiar with the Act of 1908 will have to beware of thinking that some provision has been repealed merely because they do not find it in its former setting. In considering references in other Acts or in documents to any section of the repealed Acts relating to companies, it will be necessary to bear in mind s. 38 of the Interpretation Act, 1889, COMPANIES IN GENERAL and s. 381 (2) of the Companies Act, 1929, under which in effect such references will generally be construed as references to the corresponding sections of the Companies Act, 1929. It must not be forgotten that the Act is a consolidation Act, and not a codifying Act (such as the Bills of Exchange Act, 1882, the Partnership Act, 1890, and the Sale of Goods Act, 1893). Large and important branches of existing company law are practically untouched by it, whilst the law as to debentures, apart from the matter of registration, is only dealt with in a few isolated particulars. Accordingly, useful though the Act is, all who are connected with the practical working of companies will require to supplement their knowledge of the Act by an acquaintance with a considerable quantity of additional law, for the most part the result of decisions of the Courts. Company law, then, is in part statute law, and in part case law; the case law comprising not only decisions upon the present statute and its predecessors, but also on matters in which the statutes play no directly material part. The Companies Acts, whilst conferring the boon of limited liability, at the same time restricted freedom of action to the extent of prohibiting unregistered partnerships of more than a certain number. Ss. 357 and 358 of the 1929 Act, reproducing the older law, in effect make ten the maximum number of persons who may carry on banking business together, and twenty the maximum number who may carry on any other business together, without registration under the Act, or without the sanction of a special Act of Parliament or a charter. Mining companies within the stannaries are, however, excepted. Under the Act, as under the earlier Acts, various descriptions of companies may be registered (see ss. 1 and 2). These are :— ‘a) Companies limited by shares; 'b) Companies limited by guarantee, which may either (1) have a share capital; or (1) not have a share capital; (c) Unlimited companies, which may either (1) have a share capital; or il) not have a share capital. As regards companies limited by guarantee not having a Limited by share capital, the companies that adopt this method of Guarantee. formation are chiefly associations for mutual insurance. or SECRETARIAL PRACTICE charitable purposes, law and other societies, social clubs supported by the subscriptions of their members and not formed for purposes of profit, and other companies of a like nature, which, while not requiring a trading capital, desire to have the advantages conferred by incorporation. These companies sometimes obtain the licence of the Board of Trade to dispense with the word ‘limited.’ (S. 18.) Such licence can be revoked: and if revoked, the word ‘Limited’ will be added to the name of the company, the company will cease to enjoy the privileges conferred by s. 18 and, in the case of a company the name of which contains the words ‘chamber of commerce,’ the company must change its name to a name which does not include those words within six weeks of the revocation or such longer period as the Board of Trade may allow. [Ss. 18 (4), (5) and 19 (3).] The amounts guaranteed are in the nature of reserve liability (compare s. 49) and cannot be charged [re Irish Club Co. (1906), W.N. 127]. Companies limited by guarantee and having a share capital are not common, since they offer no advantages over a company limited by shares in the usual way. Unlimited companies are also far from common, since they furnish small attraction either to the ordinary trader or to the ordinary investor. They do not attract ad valorem duty on their capital. The vast majority of registered companies being companies limited by shares, it is not thought necessary in the following pages to refer specially to the other classes of companies. But it must be borne in mind that, unless the provisions of any particular section of the Act are expressly limited to any particular class or classes of companies, they are of general application. Thus s. 5 of the Act (as to alteration of memorandum) and s. 112 of the Act (as to the annual general meeting) apply to all the descriptions of companies which are authorised to register; whilst s. 113 (as to the statutory meeting) applies only to companies limited by shares and to companies limited by guarantee which have a share capital, and s. 103 (as to keeping a dominion register) applies only to companies having a share capital, 7.e. to companies limited by shares and also to guarantee companies and unlimited companies if they have a share capital. It should also be borne in mind that many provisions which formerly applied only to companies limited by shares now apply also to companies limited by guarantee and having a share capital, e.0. S. 42 as to return of allotments. (See below, p. 50.) COMPANIES IN GENERAL J Companies under the Act also fall into two classes, according as they are, or are not, private companies. The special position and privileges of a private company are dealt with in Chapter XXII. Companies incorporated outside the United Kingdom, Foreign which establish a place of business within the United Kingdom, Companies. are made subject to certain statutory requirements. The -xtent of these requirements has been much increased by the new Act and a separate chapter (Chapter XV) has -been added dealing with foreign companies. CHAPTER II THE REGISTRATION OF COMPANIES THE Registrar of Companies exercises in the matter of registration functions not purely ministerial. He is entitled to exercise his discretion in refusing to register a company by a name so nearly resembling the name of an existing company as to be calculated to deceive (s. 17, see Chapter III); he is entitled to refuse to register as a private company a company, the articles of which do not contain the provisions required by s. 26. He also assumes the right to refuse to register in other cases, e.g. if the articles of a private company contain provisions as to share-warrants. His duty is to determine whether an association applying for registration is authorised to be registered under the Act. If all of its objects were obviously illegal, he would be bound to refuse registration; and if in such circumstances registration were obtained, the certificate could be cancelled [Bowman v. Secular Society 1917), A.C. at p. 349]. He cannot, however, hold a judicial enquiry on evidence, and he may be compelled by mandamus to register, if he improperly refuses registration [R. v. Registrar of Companies; ex p. Bowen (1914), 3 K.B. 1161]. It will be convenient to enumerate at once the essential Require- requirements for the registration of a new company, which ments. are as follows: I. A memorandum of association must be prepared which must contain the particulars required by law (s. 2). The memorandum must be stamped as if it were a deed, and must be subscribed by at least seven persons, except in the case of private companies (see Chapter XXII), when two will suffice, each of whom must sign in the presence of, and have his signature attested by, at least one witness (ss. I, 3). _. Each subscriber of the memorandum must take at least one share and write opposite to his name the number of shares he takes [s. 2 (4)]. THE REGISTRATION OF COMPANIES 7 [f the memorandum is accompanied by articles (which is obligatory except in the case of a company limited by shares), the articles must be printed and stamped as if they were contained in a deed, and signed by the subscribers to the memorandum, and be expressed in separate paragraphs numbered consecutively, and the signature of each subscriber must be in the presence of, and attested by, at least one witness (s. 9). If there are no articles accompanying the memorandum the new Table A, which is the model set of articles scheduled to the Companies Act, 1929, will constitute the articles of the company (ss. 6, 8). In the case of a private company, the articles must contain provisions (a) restricting the right to transfer its shares; (b) limiting the number of its members (exclusive of employees and ex-employees) to 50; (c) prohibiting any public issue of shares or debentures (s. 26) : ‘debentures’ includes debenture stock, bonds and any sther securities of a company whether constituting a charge on the assets of the company or not. 5. The memorandum and the articles (if any) must be delivered to the Registrar (s. 12). 6. A statutory declaration, by a solicitor engaged in the formation of the company, or by a person named in the articles as a director or secretary of the company, of compliance with all or any of the requirements of the Act, in respect of registration and of matters precedent and incidental thereto, must be sroduced to the Registrar [s. 15 (2)]. 7. Except in the case of a private company, every person appointed a director by the articles, or named in the prospectus or statement in lieu of prospectus as a director or proposed director of a company, or in the case of an intended company as a proposed director must by himself or his agent, authorised in writing, sign and deliver to the Registrar for registration, a consent to act: and unless he has already signed the memorandum for a number of shares not less than the qualification (if any), sign and deliver to the Registrar for registration an undertaking in writing to take from the company and pay for his qualification shares (if any); and a list of the persons who have consented to be directors of the company must be delivered to the Registrar by the applicant for registration (s. 140). SECRETARIAL PRACTICE Signatories. 8. The prescribed fees must be paid to the Registrar of Companies (s. 313 and Tenth Schedule). These are set out in Appendix A. Asregards theabove requirements, the particulars required by law to be contained in the memorandum of a company limited by shares will be found in Chapter III. The deed stamp which the memorandum and the articles are required to bear is in each case an impressed stamp of 10s. (see Appendix A). The names, addresses, and descriptions of the subscribers, or signatories, and of the witnesses to their signatures, must be fully and clearly set out. Women, whether married or single, may be subscribers. Foreigners may sign, even though they be resident abroad [Princess of Reuss v. Bos (1871), L.R. 5 H.L. 176], and a subscriber may sign by an agent [re Whitley Partners Ltd. (1886), 32 Ch. D. 337], though the Registrar may require evidence of the latter’s authority to do so. A corporate body, whether British or foreign, may be a subscriber and sign by its authorised representative [Whitley Partners Lid., 32 Ch. D. 337]; But for the purpose of forming the minimum number of subscribers the signature must be that of the authorised representative. A signatory induced to sign by the misrepresentation of a promoter has ro right to rescission against the company, seeing that the company did not then exist [Metal Constituents, Lord Lurgan’s Case (1902), 1 Ch. 707]. Since the repeal of the Companies Act, 1867, s. 25, it would appear that the subscribers’ shares need not necessarily be paid for in cash; for the general liability of a shareholder is to pay for his shares in money, or, with the company’s consent, in money’s worth [Baglan Hall Colliery Co. (1870), 5 Ch. App. 346]. No limit is imposed by the Act to the number of sharesin a company which may be held by a single member, and nothing in the Act requires that the subscribers to the memorandum shall take a substantial interest in the undertaking; a company may therefore consist of one person holding all the shares except six, which may be held for him by his nominees ‘Salomon v. Salomon & Co. (1897), A.C. 22]. It follows that in the case of a private company (see Chapter XXII), all the shares except one may be held by one person, and that the one share may be held by his nominee. No formal allotment of shares to a signatory is necessary [London & Provincial Coal Co. (1877), 5 Ch. D. 525]. THE REGISTRATION OF COMPANIES - ‘On the registration of the memorandum of a company the Registrar shall certify under his hand that the company ls incorporated, and in the case of a limited company that he company is limited’ [s. 13 (1)]. ‘From the date of incorporation mentioned in the certificate of incorporation, the subscribers of the memorandum, together with such other persons as may from time to time become members of the company, shall be a body corporate by the name contained in the memorandum, capable forthwith of exercising all the functions of an incorporated company, and having perpetual succession and a common seal, but with such liability on the part of the members to contribute to the assets of the company in the event of its being wound up as is mentioned in this Act’ [s. 13 (2)]. The duty of the Registrar, then, is to register the memorandum (with the accompanying articles, if any) and to issue a certificate of incorporation. The date of the certificate marks the beginning of the existence of the new corporate body, thenceforth a legal entity distinct from the members composing it. A common seal is, it will be observed, an essential part of its equipment. Express power to hold lands without licence in Mortmain is contained in the Act, but associations not for profit may not hold more than two acres of land without the licence of the Board of Trade (s. 14). The Registrar's certificate of incorporation is ‘conclusive evidence that all the requirements of this Act in respect of registration and of matters precedent and incidental thereto have been complied with, and that the association is a company authorised to be registered and duly registered under the Act’ [s. 15, subs. (1)] [see Hammond v. Prentice (1920), t Ch. 201]. Certificate of incorpora=-tion. CHAPTER III THE MEMORANDUM OF ASSOCIATION THE memorandum of association, in the case of a company limited by shares, must state the following: ‘(i) The name of the company having theword ‘‘ Limited ”’ as the last word in its name (s. 2 (1) (4)), unless a licence to dispense with the word “ Limited’ has been granted under s. 18; :(ii) whether the registered office of the Company is to be situate in England or Scotland [s. 2 (1) (b)]; (iii) The objects of the company [s. 2 (1) (c)]; ‘(iv) That the liability of the members is limited [s. 2 (2)]; ‘(v) The amount of share capital with which the company proposes to be registered, and the division thereof into shares of a fixed amount’ [s. 2 (4) (a)]. In the case of a company limited by guarantee, clauses (i) to (iv) are identical with those of a company limited by shares, whilst clause (v) must state ‘that each member undertakes to contribute to the assets of the company in the event of its being wound up while he is a member, or within one year after he ceases to be a member, for payment of the debts and liabilities of the company contracted before he ceases to be a member, and of the costs, charges, and expenses of winding up, and for adjustment of the rights of the contributories among themselves, such amount as may be required not exceeding a specified amount,” e.g. £1 [s. 2 (3)]. If a company limited by guarantee has a share capital, there will be a sixth clause identical in form with clause (v) of a company limited by shares [s. 2 (4)]. If it has no share capital, the articles must state the number of members with which it proposes to be registered [s. 7 (2)]. In the case of an unlimited company, whether or not it has a share capital, the memorandum need only have three clauses, which are the same as clauses (i) without the word ‘Limited,’ (ii) and (iii) of the memorandum of a company limited by shares (s. 2 (1) and (4)], but if the company has a THE MEMORANDUM OF ASSOCIATION II share capital, the articles must state the amount thereof 's. 7 (1)], if it has no share capital, the articles must state the number of members with which it proposes to be registered s. 2})]. oe memorandum of association is the charter of the Nature of company and defines its powers, whilst the articles of asso- Memociation form a code of regulations for the internal manage- fandum. ment of the company. The following extracts from the judgments of the House of Lords in Ashbury Railway Carriage Company v. Riche (1875, L.R., 7 H.L. 653), show clearly the functions of the memorandum. Lord Cairns, L.C., says: ‘I will ask your Lordships to observe . . . the marked and entire difference there is between the two documents which form the title-deeds of companies of this description—I mean the memorandum of association on the one hand and the articles of association on the other hand. With regard to the memorandum of association, your Lordships will find, as has often already been pointed out, . . . that that is, as it were, the charter, and defines the limitation of the powers of a company to be established under the Act. With regard to the articles of association, those articles play a part subsidiary to the memorandum of association. They accept the memorandum of Association as the charter of incorporation of the company, and so accepting it the articles proceed to define the duties, the rights and the powers of the governing body as between themselves and the company at large, and the mode and form in which the business of the company is to be carried on, and the mode and form in which changes in the internal regulations of the company may from time to time be made. With regard, therefore, to the memorandum of association, if you find anything which goes beyond that memorandum or is not warranted by it, the question will arise whether that which is so done is ultra vires, not only of the directors of the company, but of the company itself. With regard to the articles of association, if you find anything which, still keeping within the memorandum of association, is a violation of the articles of association, or in excess of them, the question will arise whether that is anything more than an act extra vires the directors but intra vires the company.’ Lord Selborne, in the same case, says: ‘I only repeat what Lord Cranworth’ [in Hawkes v. Eastern Counties Railway 1855), 5 H.L.C. 331], ‘stated to be settled law, when I say that a statutory corporation, created by Act of Parliament for a particular purpose, is limited, as to all its powers, by the purposes of its incorporation as defined in that Act. SECRETARIAL PRACTICE Name of Company. The present and all other companies incorporated by virtue of the Companies Act of 1862 appear to me to be statutory corporations within this principle. The memorandum of association is under that Act their fundamental, and (except in certain specified cases) their unalterable law; and they are incorporated only for the objects and purposes expressed in that memorandum. The object and policy of those provisions of the statute, which prescribe the conditions to be expressed in the memorandum, and make these conditions (except in certain points) unalterable, would be liable to be defeated, if a contract under the common seal, which on the face of it transgresses the fundamental law, were not held to be void, and ultra vires of the company, as well as beyond the powers delegated to its directors or administrators. It was so held in the case of the East Anglian Railway Co.’ [See East Anglian Railway v. Eastern Counties Railway (1852), 11 C.B. 775], ‘and in the other cases upon Railway Acts, which cases were approved in this House in Hawkes’ case’ [see above], ‘and I am unable to see any distinction for this purpose between statutory corporations under Railway Acts, and statutory corporations under the Joint Stock Companies Act of 1862. There is a distinction therefore between a common law corporation constituted by royal charter, and a statutory corporation, such as a railway company created by its special Act or a company incorporated under the Companies Acts. The former ‘has primd facie . . . the power to do with its property all such acts as an ordinary person can do, and to bind itself to such contracts as an ordinary person can bind himself to’; the latter ‘is made up of persons who can act within certain limits, but in order to ascertain what are the limits, we must look to the statute. The corporation cannot go beyond the statute, for the best of all reasons, that it is a simple statutory creature’ [see per Bowen L.J., in Baroness Wenlock v. River Dee Co. (1883), 36 Ch. D., at p. 675 (n)]. As regards the name of a company, s. 17 (1) (a) of the Act provides that a company may not be registered by a name identical with that by which a company in existence 1s already registered, or so nearly resembling that name as to be calculated to deceive, except where the company in existence is in course of being dissolved and signifies its consent in such manner as the Registrar requires. : The new Act imposes restrictions on the user of certain words as parts of the name of a company. Thus registration by a name including the words ‘ Building Society’ is prohibited THE MEMORANDUM OF ASSOCIATION 13 ls. 17 (1) (c)] while registration by a name containing the words ‘Chamber of Commerce’ is only allowed in the case of a company which is granted a licence under s. 18 (1) to be registered without the addition of the word ‘Limited’ to its name [s. 17 (1) (b)]. Moreover under s. 17 (2) except with the consent of the Board of Trade no company may be registered by a name which contains the words ‘Royal,’ Imperial,” ‘Municipal,’ ‘Chartered’ or ‘Co-operative,’ or hy a name which in the opinion of the Registrar suggests, or is calculated to suggest, the patronage of His Majesty the King or of any member of the Royal Family or connection with His Majesty's Government or any department thereof or with any municipality or other local authority or with any society or body incorporated by Royal Charter. The Registrar is bound to exercise a judicial discretion in determining whether or not a name is calculated to deceive, and, unless his discretion has been wrongly exercised, the Court will not interfere [R. v. Registrar of Companies (1912), 3 K.B. 23]. The registration of the name may be prevented by injunction [Hendricks v. Montagu (1881), 17 Ch. D. 638], or the use of the name after registration may be restricted by injunction [Huntley & Palmer v. Reading Biscuit Co. (1893), 9 Times L.R. 462]. And the Court will grant relief to a foreign company for a colourable imitation of its name in this country, even where the foreign company has no agency in England [Panhard et Levassor v. Panhard Levassor Motor Co. (1901), 2 Ch. 513. See also Twussaud v. Tussaud (1890), 44 Ch. D. 678; Brinsmead & Sons v. Brinsmead, 12 Times L.R. 631, referred to in re T. E. Brinsmead & Sons (1897), 1 Ch., at p. 413; Fine Cotton Spinners v. Cash (1907), 2 Ch. 184; Kingston Mill. Co. v. Thomas Kingston & Co. (1012), r Ch. 575]. A company must also have its name (which, in the case of a limited company, includes the word ‘limited,’ unless a licence has been granted under s. 18, (i)) painted or affixed conspicuously, in letters easily legible, on the outside of every office or place in which its business is carried on; (ii) engraven in legible characters on its seal; (iii) mentioned in legible characters in all the company’s notices, advertisements, and other official publications; in all bills of exchange, promissory notes, endorsements, cheques and orders for money or goods purporting to be signed by or on behalf of the company; and in all bills of parcels, invoices, receipts, and letters of credit of the company [s. 93 (1)]. There are penalties for default; and further, as regards any bill of exchange, promissory note, cheque, or order for money or SECRETARIAL PRACTICE Registered Office. goods, ‘any director, manager, or officer of a limited company, or any person on its behalf,” who signs or authorises the signing of any such document in which the company’s name 1s not mentioned in legible characters, will, if the company fails duly to pay the same, be personally liable to the holder [s. 93 (2) (3) (4)]. The holder of an order for goods means the person to whom the order is given, whether he be in physical possession of it or not [Civil Service Cooperative Society v. Chapman (1914), W. N. 369)]. The painting or affixing of the company’s name on any vehicles probably amounts to a notice or advertisement within the meaning of s. 93. The provision that the name of the company must be mentioned in all bills of exchange, &c., has been strictly construed, so that, if the name is incorrectly given, the person signing will be personally liable [Atkins & Co. v. Wardle (1889), 58 L.J. O.B. 377; Nassau Steam Press v. Tyler (1894), 70 L.T. 376]. But it has been held that the use of the abbreviation ‘Ltd.” for ‘Limited’ is sufficient [Stacey v. Wallis (1912), 28 T.L.R. 209]; and the acceptors of a bill of exchange will not be liable, although there is no correct statement of the company’s name by them, but only by the drawers (same case). A director signing must state on the face of the document that he is acting for the company [see W. & T. Avery v. Charlesworth (1914), 31 T.L.R. 52, Elliott v. Bax-Ironside (1925) 41 T.L.R. 631, Chapman v. Smethurst (1909), 1 K.B. 927]. Otherwise he will be personally liable, though the company’s seal is affixed [Dutton v. Marsh (1871), L.R. 6 Q.B. 361]. Some such form of signature as ‘For the X. Company, Limited, John Smith, Director,” should be used. As regards the registered office, notice of its situation, and of any change therein, must be given to the Registrar and under the new Act such notice must be given within 28 days after the date of incorporation of the company or of the change as the case may be [s. 92 (2)]. The company cannot remove its registered office from England to Scotland, or vice versd, although it may remove it from one part of the country specified in the memorandum to another part. Wales is included in England for the purposes of clause 2 of the memorandum; thus, the case of a company whose registered office is at Swansea, it should be described in the memorandum as situate in England. The insertion of the correct registered address in the annual return is not a sufficient notice under Ss. 92. THE MEMORANDUM OF ASSOCIATION 15 The registered office is the place at which documents must be served on the company, and they may be so served either by leaving them at, or sending them by post to, the registered »ffice [s. 370 (1)]. The word ‘document’ includes summons, notice, order and other legal process (s. 380). A summons in criminal proceedings, as well as writs in civil proceedings, must be served at the registered office, as required by the section, and not at a branch establishment [Pearks v. Richardson (1902), 1 K.B. 91]. Where a company registered in Scotland carries on business in England, the process of any court in England may be served on the company by leaving t at, or sending it by post to the principal place of business of the company in England, addressed to the manager or rther head officer in England of the company, but a copy of the process must be sent by post to the registered office in Scotland [s. 370 (2) (3)]. A verbal notice to the company, e.g. of the withdrawal of an application for shares, is good [Wilson's case (1869), 20 L.T. 962]. In the absence of the secretary, such notice may be given at the registered office to a clerk in charge, and is then a communication to the company [Truman’: case (1894), 3 Ch. 272]. As regards clause (iii), the objects clause, the objects of the company must not include any that offend either against particular statutes or against the general law, e.g. a company cannot give itself power to purchase its own shares, for by so doing it reduces its capital without leave of the Court contrary to the provisions of the Act. It is now the practice to state very fully and clearly the objects of the company. It must be remembered that the powers of a company to transact business are limited to the objects and purposes specified in the memorandum. Everything which is at variance with, or goes beyond the scope of, the memorandum, is lira vires the company, and absolutely void and incapable of ratification, although all the shareholders may assent to it [Ashbury Railway Carriage Co. v. Riche (1875), L.R. 7 H.L. 653]. It is better therefore to err on the side of taking too wide rather than too narrow POWeTS. General words in the memorandum are held to be auxiliary only to the primary objects of the company. It must be remembered that the Court will, in interpreting the memorandum, endeavour to find out what is the primary object of the company, and will verify its conclusion by reference to the prospectus [re German Date Coffee Co. (1882), 20 Ch. D. 169; re Amalgamated Syndicate (1897), 2 Ch. 600]. Objects. 0 SECRETARIAL PRACTICE A company may have several objects, but they must be clearly defined, and not implied by stringing together a series of vague powers. Where the main object is clearly set out in one paragraph, the others must be taken to be ancillary, giving wide powers to carry out that object, but not enabling the company to carry on any kind of business it likes, notwithstanding a paragraph in the objects clause to the effect that each paragraph is to be in no way restricted by other paragraphs. [Stephens v. Mysore Reefs (1902), 1 Ch. 745; see also Pedlar v. Road Block Gold Mines (1905), 2 Ch. 427, distinguishing the former case]. If, however, the paragraph contains further provision to the effect that each of the detailed objects is to be deemed an independent substantive object, this paragraph is effective; but there is a doubt whether a memorandum so drawn is a compliance with the Act, and whether the Registrar ought not to refuse to register it [Cotman v. Brougham (1918), A.C. 514]. Although such a paragraph is effective to make any transaction which is within any of the detailed objects within the powers of the company, yet, if it appeared that the object set out in one paragraph was clearly the main object of the company and that object had failed, it would appear that the company could be wound up on the ground that its substratum had gone. . [Cotman v. Brougham (1918), A.C. 514 at p. 520.] The objects clause usually includes the following words: "To-do all such other things as are incidental or conducive to the attainment of the above objects, or any of them.’ Such words have been considered of importance [Simpson v. Westminster Palace Hotel (1860), 8 H.L.C. 712; Johns v. Balfour (1889), 1 Meg. 191; Deuchar v. Gas Light & Coke Co. 1925) 41 T.L.R. 563]. But generally speaking they are used to exclude all doubt as to whether a company has power to do such things, and are not ‘meant to authorise a company to do any other things than those which have been previously declared to be the “objects” for which the company is established, but to prevent failure in accomplishing those objects by reason of any merely verbal or accidental error or uncertainty in the expressions applicable to those objects’ [per Bacon V.C., London Financial Association v. Kelk (1884), 26 Ch. D. 107, at p.. 138]. In Evans v. Brunner, Mond & Co. [(1921), ‘1 Ch. 359] these words were held to justify a grant out of the funds of a chemical manufacturing company to universities and other scientific institutions, for the furtherance of scientfic education and research. Although, as has been said above, it is wiser to state. fully the objects of the company, and to leave as little as possible THE MEMORANDUM OF ASSOCIATION 17 to implication, yet a company has undoubtedly an implied power to do anything that may be reasonably necessary to attain those objects. In other words, a commercial corporation has such powers as are expressly or impliedly warranted by its constitution [Kingsbury Collieries (1907), 2 Ch. 259]. What may be ‘reasonably necessary’ depends on the particular objects of the company, e.g. the directors of an ordinary trading company have an implied power to borrow for the purposes of the business of the company General Auction Co. v. Smith (1891), 3 Ch. 432]. This implied power is strengthened by the inclusion of general words such as those quoted above, but any words which attempt to give a company power to do anything ‘that may appear advantageous’ are useless and misleading, and should never be employed. As regards the limitation of liability clause, s. 147 of the Act provides that a company, if so authorised by its articles, may by special resolution alter its memorandum so as to render unlimited the liability of its directors, or managers, or of any managing directors. The share capital, is dealt with in Chapter V, together with the various methods by which the capital clause can be altered. The memorandum of association is unalterable, except in ‘he cases, in the mode and to the extent for which express provision is made by the Act. A considerable number of alterations are, however, permitted by the Act. A company may change its name by passing a special resolution, and obtaining the written approval of the Board of Trade, whereupon the new name is substituted in the register at Somerset House for the old name and an altered certificate of incorporation issued (s. 19). This approval will not usually be granted unless the new name affords some indication of the business carried on. It is therefore desirable to submit the proposed name to the Board of Trade before passing the special resolution. The change of name does not in any way affect any rights or obligations of the company, or render defective any legal proceedings by or against the company. If a company is [otherwise than in accordance with s. 17 (1) (a)] registered by a name identical with or nearly resembling that of another existing company previously registered, it may change its name with the sanction of the Registrar [s. 19 (2)]. Where a company uses the words ‘Chamber of commerce’ and its licence under s. 18 has been revoked it must within Alterations to Memorandum. [8 SECRETARIAL PRACTICE 6 weeks change its name to one not containing those words; and in the event of default will be liable to a fine of £50 for every day during which the default continues [s. 19 (3)]. A company may also, in certain circumstances, alter its objects clause by passing a special resolution, and presenting a petition to the Court for confirmation of the alteration, when the Court may confirm the alteration, on such terms and conditions as it thinks fit, after being satisfied that sufficient notice has been given to debenture-holders and to persons whose interests will, in the opinion of the Court, be affected by the alteration, and that creditors who in the opinion of the Court are entitled to object have either consented, or been paid, or that their debts have been secured. An office copy of any order confirming an alteration of the objects clause must be delivered by the company to the Registrar for registration within fifteen days from the date of the order. The matter is dealt with in s. 5 of the Act. These alterations in the objects clause may only be made so far as they are required to enable the company: (a) to carry on its business more economically or more efficiently; or (b) to attain its main purpose by new or improved means; or (c) to enlarge or change the local area of its operations; or (d) to carry on some business which, under existing circumstances, may conveniently or advantageously be combined with the business of the company; or (¢) to restrict or abandon any of the objects specified in the memorandum ; or (f) to sell or dispose of the whole or any part of the undertaking of the company; or (g) to amalgamate with any other company or body of persons. The alteration contemplated by (a) is one which will leave the business of the company substantially what it was before re Cyclists’ Touring Club (1907), 1 Ch. 209]. As a condition of confirming alterations in the objects of a company, the Court has, whilst sanctioning additional objects, required the insertion of a clause to the effect that no such additional objects shall be undertaken, except as a subsidiary object, without the sanction of a special resolution of the company [John Brown & Co. (1914), 84 L.J. Ch. 245]. THE MEMORANDUM OF ASSOCIATION 19 In the case of (d), the new business may be wholly different from the existing business, provided it be not destructive of or inconsistent with it; and the question whether the new business can be conveniently and advantageously combined with the existing business is for the company’s shareholders and managers [Parent Tyre Co. (1923), 2 Ch. 222]. Assuming that the Court has jurisdiction, all that it has to decide is whether the alteration is fair and equitable as between the members of the company; it is not concerned to consider the wisdom or desirability of the proposed alteration “Jewish Colonial Trust (1908), 2 Ch. 287]. Certain alterations in capital are permitted by ss. 50 and 55. See pp. 3I et seq. CHAPTER 1V ARTICLES OF ASSOCIATION Table A. WITH the memorandum, there may, in the case of a company limited by shares, and there must in the case of a company limited by guarantee or unlimited, be registered articles of association, signed by the subscribers and prescribing regulations for the company (s. 6). The articles of a company limited by guarantee or of an unlimited company are required by the Act to contain certain provisions as to the capital or number of members (s. 7 and supra pp. 10 and II). In the case of a company limited by shares, registered on or after November 1, 1929, if no articles are registered, the regulations contained in Table A, in the first schedule to the Companies Act, 1929, are, so far as they are applicable, the regulations of the company. Many existing companies have as articles, Table A of 1908 or some modified form of an earlier version of Table A. Table A is a model set of articles, which can be adopted, modified or rejected, as the company or its promoters may please. It has been held that, the original Table A being part of the Companies Act, 1862, placed there by the legislature, no transaction which conforms to its provisions can be ultra vires [see Lock v. Queensland Mortgage Co. (1890), A.C. 461]. The same principle must apply to the revised Table A of 1906, the Table A of 1908, and the present Table A. The regulations contained in Table A (as well as any other articles) can be altered by a special resolution passed by the company (s. 10). Table A may be altered by the Board of Trade from time to time, but any alterations so made will not affect any company registered before the date of such alteration (s. 379). Table A, however, does not suit the requirements of all companies. Large companies continue to have special articles of their own, and exclude Table A entirely; small companies may adopt Table A with or without modification; but generally speaking it is more convenient for a company to have articles of its own, and the additional expense is small. 20 ARTICLES OF ASSOCIATION 2T The danger of hybrid articles, ¢.e. Table A with modifications, is well illustrated by the cases of Fisher v. Black & White Publishing Company (1901, I Ch. 174), and R. Paterson and Sons v. Paterson (1916, W.N. 352). [t may be found useful to notice some of the chief points vhich require special attention in preparing the articles of association. The articles should provide for the purchase by the company of the business it is formed to acquire, whether by entering into an agreement already prepared but not executed, or by adopting an agreement already made between the vendors and certain persons as trustees for the proposed company. If any of the vendors are also directors, it. is usual and advisable to insert a provision for their protection; but the protection will not be effective unless it covers the facts of the particular case and the extent of the protection ls open to some doubt. [See Ommium Electric Palaces v. Baines (1914) 1 Ch. 332 per Sargant J. at p. 347.1 Provision should be made for the payment of commissions for underwriting. A limit should as a rule be placed on the borrowing powers of the company, e.g. that the amount borrowed must not exceed the amount of the nominal capital, except with the sanction of a general meeting. This limit is essential in the case of a company requiring a quotation on the Stock Exchange and is usual except in the case of private companies. The length of notice required for a general meeting, the quorum, and the conditions under which a poll may be demanded, should be specified; and in framing these articles the provisions of s. 117 (see infra p. 126) as to the length of notice required for a special resolution must be borne in mind. The voting powers of members, whether on a sliding scale or otherwise, must be carefully arranged, so as to prevent the control of the company falling into the wrong hands. Provision should be made as to voting by proxy. It is convenient to provide for class meetings of shareholders, giving power for a special majority of a class to bind the class, so that variations may, if necessary, be made in the respective rights of the different classes. Full provisions as to the number, appointment, qualification, remuneration, disqualification, retirement, and removal of directors should be made, and, if necessary, regulations as to the appointment, etc., of one or more managing directors, or of alternate directors. Where a director is to be appointed by a general meeting, it should be provided that due notice Contents of Articles. SECRETARIAL PRACTICE of intention to propose any candidate other than one recom mended by the board must be given to the company. The powers of the directors should be specified, and, in most cases, ample powers of delegation given. Proceedings at board meetings may be fully regulated. It is usual to insert a provision empowering a director to contract with the company, but any such provision must be subject to the restriction that he must declare his interest [s. 149] and is usually subject to the further restriction that he may not vote in respect of such contract. A directors’ indemnity clause against liabilities incurred in the conduct of the company’s business, other than liabilities due to the directors’ wilful act or default, was often inserted and was effective (see hereon re City Equitable Fire Insurance Co. Lid. (1925) 1 Ch. 407). Under s. 152 of the Act of 1929, however, (1) the provisions of such a clause are made void except that provisions in force at the commencement of the Act will remain effective for six months from that date, (2) any transaction in force is protected for a period of six months, and (3) the company may under any such provision indemnify any director, manager, officer, or auditor against any liability incurred by him in the successful defence of any civil or criminal proceedings, or in connection with any successful application to the Court under s. 372 for relief from liability for negligence, default or breach of trust or duty. A provision should, therefore, still be inserted limited to such indemnity as is authorised by the third exception mentioned above. Provisions as to accounts and audit are, in practice, usually inserted as a reminder of the provisions of the statutory law (ss. 122, ef seq.). Express provision should be made, except in the case of a private company, to give effect to the statutory obligation to send a copy of the balance sheet and all documents required by the Act to be annexed thereto to each shareholder (s. 130). It is desirable to give the board power to form a reserve fund, subject to whatever special conditions may be advisable in each case. Where power is taken to create redeemable preference shares (s. 46), special provision should be made as to the Capital Redemption Reserve Fund referred to in that section. Amongst the regulations as to payment of dividends, it should be provided that interim dividends may be paid, that no larger dividend may be declared than is recommended by the board, and that no dividend shall bear interest against the company. ARTICLES OF ASSOCIATION Articles of association commonly contain many clauses which simply reproduce statute law. Such clauses are of course surplusage, although for the sake of completeness, it is desirable to insert them. For the Stock Exchange requirements as to articles of association, see Appendix D. It may be pointed out that the word ‘regulations,’ where it Nature of occurs in the articles of a company, may or may not be Articles. equivalent to ‘articles’ [Quin & Axtens v. Salmon (1909), A.C. 442]. In other words, a company may have ‘regulations’ other than its articles; these may be constituted by minutes of the board, or by resolutions carried in general meeting. {t must, however, be borne in mind that the articles -can only be altered by special resolution and a resolution of the board, or an ordinary or extraordinary resolution of the company in general meeting, if inconsistent with the articles, would be ineffective. The articles form a code of regulations for the internal management of the company, whilst the memorandum is the charter of the company and defines its powers. The respective functions of the two documents are clearly described in the extract from the judgment of Lord Cairns, in Ashbury Railway Carriage Company Vv. Riche (1875, L.R. 7 H.L. 653), cited in Chapter III. The provisions of the articles cannot, therefore, extend the powers of the company. It is useless, for example, for an article defining the powers of directors to clothe them with a power which the company itself does not possess. Thus, to take a simple instance, if a company, which, not being a trading company, has no implied power to borrow money, has not in its memorandum taken a power to borrow, it is clear that an article giving the directors power to borrow will be wholly inoperative. Again, if the memorandum of a company defines the rights attaching to different classes of shares, and itself contains no provisions for the alteration of those rights, whether by reference to the articles of association or otherwise, it is useless for the articles to provide that those rights can be altered by special resolution, or by any specified majority of the shareholders. Neither can the articles deprive members of rights given to them by statute, and therefore a provision in the articles that, in case of a reconstruction, dissenting shareholders shall not have the rights given them by s. 234 is invalid [Payne v. Cork Co. (1900), 1 Ch. 308]. Similarly, shareholders having in certain circumstances a statutory right to present a winding-up petition, an article purporting to Legal Effect of Articles. Company and its Members. Members Inter se. 2A SECRETARIAL PRACTICE deprive them of that right is invalid [Peveril Gold Mines 1898), 1. Ch. 122]. In the same way an article seeking to take away the right of shareholders to requisition a meeting, or to inspect the company’s books would be wholly inoperative. The legal effect of articles of association, as a whole, requires to be clearly understood. S. 20 (1) of the Act provides that ‘subject to the provisions of this Act, the memorandum and articles shall, when registered, bind the company and the members thereof to the same extent as if they respectively had been signed and sealed by each member and contained covenants on the part of each member to observe all the provisions of the memorandum and of the articles,” and this section as judicially interpreted is the chief source of information on the point. The questions which require to be considered may be stated as follows: (1) What is the effect as between the company and the members? (2) What is the effect as between the members themselves? (3) What is the effect as between the company and outsiders? (1) As between the company and its members, it is clear that the members are bound to the company, and a series of decisions has firmly established the proposition that the company is similarly bound to the members. It is to be observed that the relationship of the member to the company is more than a simple contractual relation. He is bound as though he had covenanted with the company under seal. The practical result is that the company can sue a member to enforce the obligations of the member to the company under the articles. Thus the company can sue a member for calls, or to enforce a lien, or for many other purposes. Similarly, a member can sue the company if the company acts in contravention of the articles, e.g. in forfeiting shares without complying strictly with the relevant terms of the articles. The rights, however, in respect of which a member can sue the company are the rights merely with which he is endowed as a member of the company. When, although a member, he acquires rights in another capacity, even as a director, other principles apply (see 3, below). (2) As between the members themselves the position appears to be different. It is true that in Wood v. Odessa Waterworks Company (1888, 42 Ch. D. 636), Stirling, J., said that the articles of association of a company constitute a contract not merely between the shareholders and the company, but between each individual shareholder and every other. But the words of the section hardly bear the construction that each shareholder has contracted with every ARTICLES OF ASSOCIATION 2; other shareholder, and Lord Herschell, in Welton v. Saffery 1897, A.C. at p. 315), after stating the words of the section, went on to say: ‘The articles thus become in effect a contract under seal by each member of the company and regulate his rights. They cannot, of course, diminish or affect any liability created by the express terms of the statute; but, as I have said, the statute does not purport to settle the rights of the members inter se; it leaves these to be .determined by the articles (or the articles. and memorandum together), which are the social contract regulating those rights. I think it was intended to permit perfect freedom in this respect. It is quite true that the articles constitute a contract between each member and the company, and that there is no contract in terms between the individual members of the company; but the articles do not any the less, in my opinion, regulate their rights ¢nter se. Such rights can only be enforced by or against a member through the company, or through the liquidator representing the company; but I think that no member has, as between himself and another member, any right beyond that which the contract with the company gives.” The point, then, is that, there being no contract constituted by the articles between one member and another, although their mutual rights are regulated by the articles, one member cannot in general sue another in respect of a violation of those rights, but the company must do 1t for him. (3) As between the company and outsiders the articles do Company not constitute any contract whatever. And this seems to be and true, even in the case of a member in relationships with the Dutzidess, company arising otherwise than purely through membership. [t was long ago held that where the articles of a company provided that the preliminary expenses should be paid by the company, this gave the promoter no right whatever to recover them from the company [Melhado v. Porto Alegre Railway Company (1874), L.R. 9 C.P. 503]. The effect of the article was merely an agreement by the company with each individual shareholder, that the company would pay the preliminary expenses; and if the company failed to do 50 there was no breach of contract with the promoter, but only with the shareholders, who were not damnified. Similarly, in Eley v. Positive Life Assurance Company (1876, 1 Ex. D. 38), there was an article providing that the plaintiff should be employed for life as solicitor to the company and should only be removable for misconduct. He acted for some time, and then the company discontinued the employment. [t was held that he could not sue the company. Lord Appointment under the Articles. Cd SECRETARIAL PRACTICE Cairns, in the Court of Appeal, stated the effect of the article as being that, the articles being an agreement infer socios, it amounted to an agreement between the parties to it to employ the plaintiff. This being an agreement to which the plaintiff was in no way a party, he had no right of action upon it. ‘This article,” he says, ‘is either a stipulation which is binding on the members or else a mandate to the directors; in either case it is a matter between the directors and shareholders and not them and plaintiff.’ Lord Cairns meant, apparently, that the contract was between the company and each individual member, and also between each individual member and each of his fellow members; but, in view of Lord Herschell's words in Welton v. Saffrey (quoted above), it appears that the latter of these two elements must strictly be excluded. The principle of the decision is not, however, affected by the exclusion. The hardship of this decision is more apparent than real. If a man is appointed by the articles, secretary or solicitor of a company, there is, it is true, no binding contract by the company or the members to employ him as such. The prudent and the usual course is for a contract to be entered into between the company and the individual -it is desired to employ, wholly apart from the articles, and then his position is clear. Even if no contract has in fact been entered into, and a person appointed by the articles has in fact been employed as, say, secretary, the view taken by the Courts is that, although the articles do not constitute a contract, it can be ascertained from them upon what terms he is serving. Or, to put the matter in another way, if the company and the secretary act as contemplated by the clause, the Courts will treat them as though they had entered into a contract in terms of the clause. There have been many cases in which this principle has been acted on, and in some of them the individual was a director. [See e.g. ex parle Beckwith (1898), 1 Ch. 324). Articles of association are public documents, and a person dealing with a company will be deemed to know and understand the contents of the articles [Griffith v. Paget (1877), 6 Ch. D. 511]; but he is not bound to do more than make sure that the proposed dealing is not inconsistent with the company’s regulations. ‘If the directors have power and authority to bind the company but certain preliminaries are required to be gone through on the part of the company before that power can be duly exercised, then the person contracting with the directors is not bound to see that all these preliminaries have been observed. He is entitled to ARTICLES OF ASSOCIATION presume that the directors are acting lawfully in what they do’ [per Selwyn, L.J. Land Credit Co. of Ireland (1869), 4 Ch. App. at p. 469], provided he does not negligently disregard facts which put him on inquiry as to some irregularity "Liggett (Liverpool) v. Barclays Bank (1928), 1 K.B. 48]. [f, however, the person is contracting, not with the directors as a board, but with an individual director, he will not be entitled to presume that authority has been conferred on the individual director unless that director has been held out as having authority, e.g. he was the managing director, and the contract was within the ordinary ambit of the powers of a managing director [Houghton & Co. v. Nothard Lowe & Wills 1927), 1. K.B. 246]. The interpretation of articles is a matter which involves the most careful attention. To discover the true meaning of an article, it is frequently necessary to look, not only at the other articles of the same group, but also at the whole set. A striking instance of this is to be found in the case of Moseley v. Koffyfontein Mines (1910, 2 Ch. 382, and, on appeal, 1911, 1 Ch. 73), where the decision of the Court of first instance as to the construction of an article, was reversed by the Court of Appeal, on consideration in connection with the article in question of another article which does not appear to have been brought to the notice of the Court below. See also Adair v. Old Bushmills Distillery Co. (1908, W.N. 24); Collaroy Company v. Giffard (1928, Ch. 144). In respect of matters which the Act requires to be stated in the memorandum, when there is an inconsistency between the memorandum and the articles, the memorandum must prevail [Wedgwood Coal and Iron Co., Anderson’s Case (1878), 7 Ch. D. 75]. In respect of matters which the Act does not require to be stated in the memorandum, if there is an ambiguity, the articles may be permitted to explain the memorandum [Capital Fire Insurance Association (1882), Ch. D. 209]. Reference has been made above to the power of alteration by a company of its articles. This power, which is of the widest description, is conferred by s. 10 of the Act, which provides that: (1) Subject to the provisions of this Act and to the conditions contained in its memorandum, a company may by special resolution alter or add to its articles’; and (2) ‘Any alteration or addition so made in the articles shall, subject to the provisions of this Act, be as valid as if originally contained therein, and be subject in like manner to alteration by special resolution.’ [nterpretation. Alterations. 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 continued 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. Accordingly 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]. ARTICLES OF ASSOCIATION 29 It has been pointed out above that alterations of the articles purporting to enlarge the powers of a company, or to deprive the members of a statutory right, are invalid. There is another limitation on the power of alteration of articles. Bearing in mind that any alteration of articles involves the binding of a minority by a majority, it must not be forgotten that the power must be exercised bond fide for the benefit of the company as a whole, and no fraud on, or oppression of, the minority, or want of good faith on the part of the majority, will be permitted. A fictitious case, put by Lord Wrenbury, in his well-known book, well illustrates this. ‘Say,’ he says, ‘that there are one thousand shares of £10 each ranking equally for dividend, a special resolution that shares 1 to goo shall for the future have twice as much dividend as shares goI to 1000 must be impossible as against shares gor to 1000.” "It is obvious that it is theoretically possible for the statutory majority of shareholders to pass such a resolution, but it is equally clear that any Court would restrain the company from acting upon the resolution, inasmuch as it would result in grossly unfair and oppressive treatment of a helpless minority. Such a resolution would not be passed bond fide for the benefit of the company as a whole. In Brown v. British Abrasive Wheel Co. (1919, I Ch. 290) a proposed alteration was restrained by the Court as oppressive to the minority; in Sidebottom v. Kershaw Leese & Co. (1920, 1 Ch. 254) an alteration introducing the principle of compulsory transfer, in the case of a shareholder competing with the company, was held to be made bond fide and was permitted. In Dafen Tinplate Co. v. Llanelly Steel Co. (1920, 2 Ch. 124) an alteration introducing a general power to buy out any member, with one specified exception, at pleasure, was held invalid, as not being genuinely for the benefit of the company as a whole; but see Shuttleworth v Cox Bros. & Co. (Maidenhead) (1927, 2 K.B. g, supra). A statutory restriction on the power of a company to alter its articles was imposed by the Companies (Foreign Interests) Act, 1917, s. 1 of which in effect prohibited the alteration of any article, or regulation, designed to limit the interest of, or power of control by, aliens, without the written consent of the Board of Trade. This Act was. however, repealed by the Companies Act 1928. A secretary should always make careful note of matters in which the articles of his company appear to be defective; and the opportunity should be taken, when meetings of the company are required for other purposes, to improve the articles and bring them up-to-date. -™ SECRETARIAL PRACTICE A company is bound, under penalty, to send to any member, on his request, a copy of the memorandum and of the articles, if any, and a copy of any Act of Parliament which alters the memorandum subject to payment in the case of a copy of the memorandum and articles of a sum not exceeding one shilling, and in the case of a copy of an Act of a sum not exceeding the published price thereof (s. 23). If the memorandum has been altered, the copy must be in accordance with the alteration (s. 24). CHAPTER V CAPITAL AND SHARES As has been seen in Chapter III, a clause (commonly the fifth) in the memorandum of association of a company limited by shares, must state ‘the amount of share capital with which the company proposes to be registered, and the division thereof into shares of a fixed amount’ [s. 2 (4)]. The amount of capital with which a company is registered, or to which that amount is subsequently increased, is generally called the nominal capital, or the authorised capital, of the company. The phrases ‘issued capital’ and ‘paid up capital’ must be distinguished, since neither of these is necessarily identical in amount with the nominal capital, or with the other. Thus a company may have a nominal capital of £100,000, divided into 100,000 shares of £1 each. If 60,000 shares have been issued and 15s. per share has been paid on them, the issued capital is £60.000 and the paid up capital £45,000. The capital clause, being one of the conditions of the memorandum, can only be altered in the mode and to the extent for which express provision is made in the Act (s. 4). The alterations so provided for are increase of capital, consolidation of shares, conversion into stock and reconversion into shares, subdivision of shares, cancellation of shares (s. 50), and reduction of capital (s. 55). Such alterations can now only be effected by the company in general meeting whereas under the 1908 Act all but sub-division of shares and reduction of capital could be effected by the directors if the articles or a resolution of the company authorised them so to do. The capital can also be reorganised by a scheme of arrangement under s. 153. As regards increase of capital, a company may, if authorised by its articles, increase its capital by the issue of new shares of such amount as it thinks expedient. Such increase need not be authorised by the memorandum nor is a power therein effective [re Dexine Co. (1903), W.N. 82], but it must be authorised by the articles, and if the articles as originally framed do not sanction such increase they must be altered by special resolution before it can be effected. The power [ncrease of Capital, Consolidation. L& SECRETARIAL PRACTICE can now only be exercised by the company in general meeting [s. 50 (2)]. The articles may require a special or extraordinary resolution; otherwise an ordinary resolution is all that is necessary. A specimen form of resolution will be found in chapter XIV. Every copy of the memorandum of association issued after the date of the alteration must be altered accordingly. Notice of any increase in the capital beyond the registered capital together with a printed copy of the resolution authorising the increase must be sent to the Registrar within fifteen days from the date of the passing of the resolution by which such increase has been authorised (s. 52). The notice must include the prescribed particulars (see Form No. 10 in the Companies (Forms) Order, 1929) of the classes of shares effected by the increase. The appropriate fees must be paid on the additional capital (Tenth Schedule attached to Companies Act, 1929), and ad valorem duty must be paid under the Stamp Act, 1891 (s. 112), and the amending acts. See Appendix A. Preference shares may be issued by way of increase of capital unless forbidden by the memorandum [Andrews v. Gas Meter Co. (1897), 1 Ch. 361] and such preference shares may be made redeemable under s. 46 (see further p. 39). The rights attached to the shares in the increased capital must not prejudice any rights unalterably attached by the memorandum to the different classes of shares into which the original capital of the company is divided [Ashbury v. Watson (1885), 30 Ch. D. 376]. The memoranda, however, of most modern companies give powers which permit modification of the rights attached to the shares in the initial capital with the sanction of class meetings. As to consolidation, a company may, if authorised by its articles, consolidate and divide all or any of its share capital into shares of larger amount than its existing shares. The power must now be exercised by the company in general meeting [s. 50 (2)]. If the regulations of the company do not authorise consolidation, a special resolution is necessary, but two special resolutions, one to alter the articles and the other to authorise the consolidation, need not be passed; one will suffice [Campbell's Case (1873), 9 Ch. App. 1]. Notice of the consolidation must be given to the Registrar (s. 51) within one month. Consolidation of shares, followed by subdivision of the same shares, may be effected by one and the same resolution [North Cheshire Brewery Co. (1920), W. N. 149]. CAPITAL AND SHARES 33 A company can only convert all or any of its paid-up shares into stock, and reconvert that stock into shares of any denomination, if it is authorised by its articles to do so. Where the power is not so given, it is not necessary to have the articles varied before the resolution for the conversion is passed. A special resolution passed in the usual way will suffice [Campbell's Case (1873), 9 Ch. App. 1]. The power to convert and reconvert must be exercised by the company in general meeting [s. 50(2)]. Notice of the conversion of shares into stock must be given to the Registrar, as must also notice of reconversions (s. 5I). - After conversion and notice to the Registrar, all the provisions of the Act which are applicable to shares only shall cease as to so much of the capital as is converted into stock; and the register, and the list of members to be forwarded to the Registrar, shall show the amount of stock held by each member instead of the number of shares [ss. 95 (1), 108 (2)]. Throughout the Act, ‘share’ includes stock except where a distinction between stock and share is expressed or implied (s. 380). Stock differs from shares in this respect, ‘that shares are Stock. not necessarily paid up.” ‘Shares are not necessarily converted into stock as soon as they are paid up; they may exist either as paid up, or as not paid up shares. But as regards stock, that can only exist in the paid up state.’ ‘Shares in a company, as shares, cannot be bought in small fractions of any amount, fractions of less than a pound, but the consolidated stock of a company can be bought just in the same way as the stock of the public debt can be bought, split up into as many portions as you like, and subdivided into as small fractions as you please. . . . Independently of that, however, it possesses all the qualities of shares. It is, in fact, simply a set of shares put together in a bundle’ [per Lord Hatherley, in Morrice v. Aylmer (1875) L.R. 7 H.L. 717, at pp. 724, 725). Stock is ordinarily transferable in the same manner, as shares, but sometimes a minimum amount of stock is fixed, and fractions of £1 are not generally allowed to be dealt with. Stockholders have the same rights as regards dividends and voting as shareholders. Preference and other rights in respect of shares are not affected by their conversion into stock. Warrants to bearer may be issued in respect of stock (see Chapter X). Stock cannot be issued direct; shares must first be issued and then, when fully paid, may be converted into stock. But the direct issue of stock is an irregularity which after Conversion into Stock and reconversion. SECRETARIAL PRACTICE the lapse of a long time may be waived [Home and Foreign Investment Corporation (1902), 1 Ch. 72]. As regards subdivision, this power can only be exercised if the company is so authorised by its articles. The power must be exercised by the company in general meeting [s. 50 (2)] but a special resolution is no longer necessary unless the articles require it. Notice of the subdivision must be given to the Registrar (s. 51). The shares of the company, or any of them, may be subdivided into shares of smaller amount, but the proportion between the amount paid and the amount, if any, unpaid on each subdivided share must be the same as in the case of the original share. But the necessity of preserving, in the undivided shares, the due proportion of unpaid liability existing in the original shares may be avoided on a scheme of arrangement under s. 153 (see Chapter XIX) involving subdivision (Vine v. General Rubber Trust (1913), 108 L.T. 709, Guardian Assurance Co. (1917), 1 Ch. 431], or on a reduction of capital involving subdivision [Doloswella Rubber Estates (1917), 1 Ch. 213], in all of which cases some of the subdivided shares became fully paid, the whole of the previously existing unpaid liability falling on the remaining subdivided shares. Cancellation. The power of cancellation of shares, which can only be exercised if the company is so authorised by its articles and must be exercised by the company in general meeting [s. 50 (2)], applies only to shares which have not been taken or agreed to be taken. It is really a method of reducing the nominal capital without the sanction of the Court; but only unissued shares can be cancelled. Notice of the cancellation must be given to the Registrar (s. 5I). In the case of any of the alterations in the memorandum dealt with above, copies of the memorandum issued afterwards must contain the alteration [s. 24 (1)]. Under the Act of 1908 a reorganisation involving the alteration of the memorandum of association by (a) the consolidation into one class of shares of different classes; or (b) the division of shares of one class into shares of different classes had to be carried out under s. 45 of that Act which contained very stringent provisions as regards majorities at class meetings. Under the new Act all reorganisations which involve an alteration of the memorandum of association will be carried into effect by a scheme of arrangement under s. 153 (see Chapter XIX). : Reduction of capital is effected by the company, provided it is so authorised by its articles, passing a special resolution for the reduction, and then applying to the Court by petition 34 Subdivision. CAPITAL AND SHARES 35 for an order confirming the reduction (ss. 55, 56). The power to reduce may be exercised in any way whatever [see Poole v. National Bank of China (1907), A.C. 229], although the Act particularises three ways, namely (a) by extinguishing or reducing the liability on any of its shares in respect of share capital not paid up; (b) either with or without extinguishing or reducing liability on any of its shares by cancelling paid-up capital which has been lost or is unrepresented by available assets; and (c) either with or without extinguishing or reducing liability on any of its shares, by paying off any paid-up share capital which is in excess of the wants of the company (s. 55). In certain instances there is a practical reduction which can be effected without the sanction of the Court, e.g. by forfeiture of shares or by surrender (see Chapter IX). S. 40 of the Act of 1908, which gave power to pay off paid up capital out of accumulated profits was repealed by the Act of 1928. Where the articles of a company, as originally framed, or as altered by special resolution, authorise it, shares not taken or agreed to be taken may be cancelled, and the nominal capital thus reduced without application to the Court (s. 50). If the original articles do not give the power they must first be altered in the usual way by special resolution, and the special resolution for reduction subsequently passed [Patent Invert Sugar Co. (1886), 31 Ch. D. 166]. A power to reduce contained only in the memorandum is ineffective (re Dexine Co. (1903), W.N. 82]. The precise procedure to be adopted to effect a reduction depends upon whether or not the reduction involves either the diminution of liability in respect of unpaid capital, or the return to shareholders of paid-up capital. If either of these is involved, creditors are clearly affected and may object [s. 56 (2)]; but in the more common case where paid-up capital has been lost, or is unrepresented by available assets, creditors are not prejudiced, and in such cases, and indeed in any case other than the two cases specifically mentioned in s. 56 (2), can only object if the Court so allows. The petition is supported by affidavit evidence. An affidavit by the chairman of directors commonly sets out the history of the company, and the circumstances leading to the present position; whilst the secretary should depose to the due calling of the meetings of the company. In the case where the reduction is sought to be effected on the ground of capital lost or unrepresented by available assets, evidence of the loss should always be adduced [Caldwell v. Caldwell (1916), W.N. 70]. Shares. SECRETARIAL PRACTICE On the petition being presented a summons is issued for the directions of the Court as to the procedure preliminary to the hearing of the petition. This procedure is governed by order L111 B. Rules 10 and 1T of the Rules of the Supreme Court. (See Appendix G.) The detailed consideration of this order is beyond the scope of this book; but it may be mentioned that if creditors are affected, the Court will require a list of the company’s creditors made out at a date fixed by the Court, and this list will have to be verified by an affidavit which is usually sworn by the secretary. As the debts due to the creditors appearing in the list will have to be paid off or provided for before the reduction is confirmed unless such creditors consent to the reduction [see ss. 56 (2), 57], it is advisable to present the petition on a date at which the company’s indebtedness is at the minimum. “On confirmation by the Court of the reduction, a copy of the order of the Court, and an approved minute showing the amount of the reduced capital with its division into shares, must be produced to the Registrar for registration and the reduction only takes effect from registration (s. 58). Copies of the memorandum issued after the registration must embody the minute [ss. 24, 58 (6)], and notice of the registration must be published as the Court directs [ss. 58 (3)]. Under the law in force prior to the 1st November, 1929, the company was bound to add the words ‘and reduced’ to its name either from the date of the presentation of the petition or, if creditors were affected by the reduction, from the date of confirmation of the resolution for reduction. Under the existing law, the company will not have to add the words ‘and reduced’ to its name unless directed by the Court so to do under s. 57 which provides that where the Court makes an order confirming the reduction it may, if for any special reason it thinks proper so to do, direct the company for such period as the Court thinks fit to add to its name the words ‘and reduced’, and may also require the company to publish the reasons for the reduction or such other information as the Court may think expedient with a view to giving proper information to the public and, if the Court thinks fit, the causes which led to the reduction [s. 57 (2)]. It is impossible to predict in what cases the Court will think it necessary to direct the addition of the words ‘and reduced’ to the name of the company; but the use of the words ‘special reason’ in the section indicate that as a rule no-such direction will be given. As already stated the memorandum must state the amount of share capital and the division thereof into shares of a 30 CAPITAL AND SHARES 3 / 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 company, 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 application is made, the variation will not take effect unless and until it is confirmed by the Court. An application under Classes of Shares. 38 SECRETARIAL PRACTICE this section must be made within seven days after the consent was given or the resolution passed. The Court must confirm the variation unless it is satisfied that having regard to all the circumstances of the case the variation would unfairly prejudice the shareholders of the class represented by the applicant and there is no appeal from an order of the Court under this section. A copy of any order of the Court under this section must be forwarded by the company to the Registrar of Companies within 15 days after the making of the Order. The expression ‘variation’ in this section includes ‘abrogation.’ It will be noticed that the onus of proof is on the dissentient minority. Shares may be divided into any number of classes, e.g. Preferred, Ordinary, ‘A’ Preference, ‘B’ Preference, and so forth. The preferential right is generally in respect of capital and of dividend, but the right may be of any kind, e.g. in respect of voting power. These rights are entirely separate, and the possession, e.g. of preferential rights as to dividend, gives no similar right in the distribution of capital [Simpson v. Palace Theatre (1893), 69 L.T. 70]. Primd facie where a preferential dividend is provided for, it is cumulative [Webb v. Earle (1875), 20 Eq. 556]; i.e. a deficiency in one year can be paid out of the profits of a subsequent year before the ordinary shareholders receive anything; but if it is provided by the memorandum that the holders of preference shares shall be entitled out of the net profits of each year to a preferential dividend at a certain rate, then such dividend is not cumulative [Staples v. Eastman Photographic Materials Co. (1896), 2 Ch. 303; see also Adair v. Old Bushmills (1908), W.N. 24]. Where capital is reduced, the presumption is that the loss is to be borne as between classes of shareholders in the same way as loss of capital, but the Court can sanction anv reduction it thinks fair. Special voting rights can be attached to different classes of shares, and it has been held that these are alterable, when given by the articles [re James Colmer (1897), 1 Ch. 524]. The question sometimes arises whether preference shares are entitled in the absence of express provision to participate in the distribution of surplus assets after all capital has been repaid. In each case it is a question of construction of the memorandum and articles. The authorities are difficult to reconcile; the latest decision, in which all the authorities are reviewed is in Collaroy Company v. Giffard (1928), Ch. 144. CAPITAL AND SHARES 39 Under the Act of 1929 (see s. 46) a company may, if so authorised by its articles, issue preference shares which are, or at the option of the company are, liable to be redeemed. This power is, however, subject to the following limitations: (1) only fully paid shares may be redeemed, (2) redemption may only be effected out of profits which would otherwise be available for dividend or out of the proceeds of a fresh issue of shares made for the purposes of the redemption, (3) if the redemption is effected out of profits, there shall be transferred out of profits which would otherwise have been available for dividend to a special ‘Capital Redemption Reserve Fund’ a sum equal to the amount applied in redeeming the shares and (4) if the shares are redeemed at a premium, the premium must in any event be provided for out of the profits of the company before the shares are redeemed. Having regard to ss. (3) it would appear to be essential that the actual terms of redemption must be specified in the articles and that an article giving the directors power to fix the terms would be invalid. Where under this section a company has redeemed or is about to redeem any preference shares, it may issue shares up to the nominal amount of the shares redeemed or to be redeemed as if such latter shares had never been issued and no capital duty will be payable under the Stamp Act upon such new issue provided that where the new issue is made before the redemption of the old shares, the old shares are redeemed within one month after the issue of the new shares [S. 46 (4).] The provisions of the Act as to reduction of capital apply to the Capital Redemption Reserve Fund save that after new shares have been issued in place of redeemed shares under the above mentioned provision enabling such issue, the Capital Redemption Reserve Fund may then be applied up to an amount equal to the nominal amount of the new shares so issued, in paying up unissued shares of the company to be issued to the members of the company as fully paid bonus shares. Shares can only be issued at a discount under the provisions Restrictions of s. 47, but whether shares are, or are not, offered for public as to Issue. subscription, a commission may be paid subject to the conditions mentioned in s. 43 of the Act (see Chapter IX, p. 95). If shares are illegally issued at a discount, the allottee cannot get rescission when once his name has been registered if he knew that the shares were being issued at a discount and assented to his name being placed on the register for such 10 SECRETARIAL PRACTICE shares; he has become a member of the company, and remains so with a liability to pay the amount unpaid on his shares [Railway Time-Table Publishing Co., ex parte Sandys (1880), 42 Ch. D. 8]. Shares may be issued at a premium without any special authority, and there is nothing to prevent the premium being treated as profits; usually, however, it is employed as capital, or used to create a reserve fund. If premiums were distributed as dividends in cash a claim might be made against the shareholders for income tax on the amount distributed. While the validity of such a claim is questionable, it is better to avoid any risk of its being upheld. No such claim can be made if the premiums are applied in paying up other shares which are distributed on a capitalisation of profits. A company may not purchase its own shares [Trevor v. Whitworth (1887), 12 A.C. 409]. A power in that behalf reserved by the articles would be void, and so, it would appear, would such a power in the memorandum (same case). If a company purchases its own shares, it reduces its capital in a manner not authorised by the Act. Prohibition It is illegal under the Act of 1929 (see s. 45) for a company to of financial give directly or indirectly, any financial assistance for the asslstance 2 purpose of or in connection with a purchase made or to be purchase of Made by any person of any shares in the company unless (i) its own lending money is part of the ordinary business of the company shares. and the loan is made in the ordinary course of business or (ii) the loan is made in the manner indicated in the section in connection with a profit-sharing scheme to enable the employees of the company to participate in its profits, or (iii) the loan is made to employees of the company, other than directors, to enable them to purchase fully-paid shares to be held by themselves in bona fide ownership. The effect of this section on transactions entered into before the coming into force of the Act is not quite clear, but it would appear that if in any case a loan repayable on demand had been granted before the commencement of the Act which would have been unlawful if made after that date and the borrower had not at the commencement of the Act completed the purchase, the company ought at once to call the loan in. In any event the section seems to prohibit the rendering by a company after the commencement of the Act of any financial assistance to enable a person to repay a loan obtained by such person before the commencement of the Act to enable him to purchase shares of the company. CAPITAL AND SHARES L The general nature of shares and some of their charac- Membership. teristics having thus been briefly noticed, it becomes material to consider how membership of a company is constituted and who may be a member. S. 25 of the Act defines a member thus: (1) The subscribers of the memorandum of a company shall be deemed to have agreed to become members of the company, and on its registration shall be entered as members in its register of members; (2) Every other person who agrees to become a member of a company, and whose name is entered In its register of members, shall be a member of the company.’ As to subscribers, see Chapter II. A director signing and delivering to the Registrar for registration an undertaking to take and pay for his qualification shares is in the same position as a subscriber [s. 140 (2)]. No one can become a member until his name is entered on the register. The register, however, may be rectified on application to the Court, if names are on it which ought not to be on it, or if names are not on it which ought to be on it (see s. 100). The agreement to take shares is therefore the true test whether a person is or can be compelled to accept registration as a member of the company, with the consequent liabilities of membership. He may apply for shares either personally, or by agent; either in writing, or by word of mouth: he may contract to take shares, e.g. as a vendor or an underwriter; he may be estopped from denying the agreement, either by taking no steps to have his name removed from the register, or by his conduct in attending meetings and so forth, although he may have originally made no agreement to take shares: and he may become a shareholder by transfer. A shareholder ceases to be a member (1) on death, although his estate still remains liable; (2) on transferring his shares to another person, though in this case he retains for one year a contingent liability in respect of shares not fully paid; (3) by a surrender or forfeiture of his shares. In the case of bankruptcy of a member, the shares vest in his trustee subject to a right of disclaimer: as to the effect of exercising which right see Wise v. Lansdell, 1921, 1 Ch. 420. Subject to the regulations of the company, anybody may who may hold shares. Some companies, however, provide that only hold Shares. persons of a certain profession shall be eligible as shareholders, and such a provision is valid. A corporation may hold shares if authorised to do so by its own memorandum and articles, and sometimes even if not so authorised, e.g. where shares are taken in payment of a debt [Lands Allotment Co. (1894), 1Ch.6161. As to infants see Chapter IX. A company |“ SECRETARIAL PRACTICE is not bound to accept a partnership as the holder of shares in the firm’s name, and the transfer of shares in a firm’s name is not accepted by the Stock Exchange as good delivery. But shares may be allotted to, and registered in the names of, two or more persons jointly, and the articles usually provide that the certificate shall be delivered to the person first named in the register. Under the Bodies Corporate (Joint Tenancy) Act, 1899, s. 1, a body corporate is placed in the same position as an individual as regards joint tenancy. Dividends are usually paid to the person first named in the register, and under most articles any one of joint holders may give effectual receipts for such dividends. Upon the death of a joint holder his interest passes to the survivors. Under Table A, cl. 103, and most articles, notices directed to be given to the members may be given to the person named first in the register. That person also usually has the right of voting given to him by the articles (see Table A, cl. 55). One joint holder cannot transfer shares registered in the names of all the joint holders [Barton v. North Staffordshire Railway (1888), 38 Ch. D. 458]. It is usually provided that the joint holders of a share shall be severally as well as jointly liable for the payment of all instalments and calls due in respect of such share; otherwise the liability is joint only. Share Section 68 of the Act provides that ‘a certificate under the Certificates. common seal of the company specifying any shares held by any member shall be primd facie evidence of the title of the member to the shares.” ‘Share’ includes stock (s. 380). A share certificate under the common seal estops the company from denying that the person to whom a certificate is granted is the registered shareholder entitled to the specific shares included in the certificate [re Bahia Railway (1868), 3 O.B. 584; Balkis Company v. Tomkinson (1893), A.C. 396). It is not a negotiable instrument, nor a warranty of title on the part of the company issuing it [Longman v. Bath Electric Tramways (1905), T Ch. 646]. If the certificate describes the shares as fully paid, the company cannot, as against a bond fide holder without notice, deny that the shares are so paid up [Burkinshaw v. Nichols (1878), 3 A.C. 1004; and see Bloomenthal v. Ford (1897), A.C. 156; Coasters (1911), 1 Ch, 86]. To raise a case of estoppel against the company, the holder of the shares must show that he acted on the certificate [Dixon v. Kennaway (1900), 1 Ch. 833]. If the company refuse to do something which, assuming the certificate to be correct, it ought to have done, it can be sued and the measure 43 of damages will be the value of the shares at the date of the breach of duty [Ottos Kopje Mines (1893), x Ch. 618]. The rule does not of course give the holder of a certificate who has got it from a bare legal owner any right against those equitably entitled [Shropshire Union Railwavs v. The Queen (1876), L.R. 7 H.L. 496]. In Appendix F will be found forms of Share Certificate ‘Forms 1 and 2), and a form of Fractional Certificate (Form 6). No charge is usually made for the original share certificate issued to a shareholder, and the Stock Exchange forbid any charge, but if worn out or lost it is usually renewed on payment of a shilling (see Table A, cl. 5). Before the issue of a new certificate to replace one lost, an adequate indemnity should be obtained. In general a statutory declaration verifying the loss, and a guarantee by a person of standing should be insisted upon; but, if the account is a small one, a letter of indemnity should be sufficient. A suitable form of Declaration and Indemnity is given in Appendix F (Form 7) The certificate should be marked ‘Duplicate’ on its face. By section 49 of the Act a limited company may, by Reserve special resolution, determine that any portion of its share Liability. capital which has not been already called up shall not be capable of being called up except in the event and for the purposes of the company being wound up. The effect of this is that the capital referred to is only available in winding up, and cannot be mortgaged or charged in any way. No alteration in the memorandum or articles increasing the liability of a member to contribute to share capital, or otherwise to pay money to the company, will bind a person who was a member prior to such alteration being made unless he consents in writing to be bound thereby (s. 22). If the number of members falls below the required minimum and it carries on business for more than six months while the number is so reduced, all its members are faced with unlimited liability if they know the facts (s. 28). The important subject of the transfer and transmission of shares is dealt with in Chapter VIII. Other incidents connected with shares are treated in Chapter IX, and the capitalisation of profits in Chapter XVII CAPITAL AND SHARES CHAPTER VI PROSPECTUS AND ALLOTMENT BEFORE a newly incorporated company (other than a private company, as to which see Chapter XXII) can commence business or exercise its borrowing powers, certain formalities must be complied with. For this purpose, companies may be divided into two classes: companies which issue a prospectus on or with reference to their formation, and companies which 0 not. Commence- A company which issues a prospectus on or with reference ment of to its formation, or, in other words, a company of which the Business ic first active step is to make a public issue of shares, must Legon. comply with the relevant requirements of ss. 34, 35, 39 and 04 of the Act before commencing business. These reauirements are as follows: — I. A prospectus must be prepared, containing the particulars required by law. A prospectus is defined by s. 380 as ‘any prospectus, notice, circular, advertisement, or other invitation, offering to the public for subscription or purchase any shares or debentures of a company.” The word is accordingly not limited to the formal document known as a prospectus, but includes any document, however informal, which offers to the public shares or debentures of the company. In this connection it must be remembered that under s. 380 ‘debenture’ includes debenture stock, bonds and any other securities of a company whether constituting a charge on the assets of the company or not. Whether or not a particular document amounts to an invitation to the public to subscribe is often a difficult question of fact. S. 35 (5), however, provides that a circular or notice to existing members or debenture holders, inviting them to subscribe, is not an offer to the public, even though the members or debenture holders may have the right to renounce in favour of other persons. An offer of shares to the public for subscription must be distinguished from an offer for purchase within s. 356 as under subsection 7 of that section a person shall not in relation to a company be regarded as not being a member of the public by reason only that he is a holder of shares in the company. Prospectus. PROSPECTUS AND ALLOTMENT 45 The prospectus, if issued ‘by or on behalf of a company, or by or on behalf of any person who is or has been engaged or interested in the formation of the company,’ must state the particulars required under s. 35 (1) and the fourth schedule to the Act and any clause purporting to waive compliance with the section is void. To be within this section the prospectus must be issued. The question of what amounts to an issue of the prospectus is sometimes a difficult question of fact; semble the document must at least have been shown to some person as a member of the public. [Nash v. Lynde (1929), A.C. 158.] The preparation of the prospectus requires great care, not only to ensure that it complies with s. 35, but also to see that the statements therein are accurate as under s. 37, directors, promoters and any persons who authorise the issue of the prospectus, are liable, even in the absence of fraud, to compensate any subscriber for shares or debentures who is damaged by any untrue statement therein unless they can establish one of the defences indicated in the section. The particulars required are considerably more extensive than they were under the Act of 1908. 2. The prospectus must be dated, the date being primd facie the date of publication, and a copy of it, signed by every director or proposed director named therein, or by his agent authorised in writing, must be delivered for registration to the Registrar. It may then be issued. It must state on the face of it that a copy has been delivered for registration to the Registrar (s. 34). 3. No person must be named as a director, or proposed director in the prospectus (whether the prospectus is issued by or on behalf of a company already formed or in relation to an intended company) unless before the publication thereof he has, by himself or his agent authorised in writing, signed and delivered to the Registrar for filing (1) a consent to act and (2) an undertaking in writing to take from the company and pay for his qualification shares, if any. This undertaking will not, however, be required if before the publication of the prospectus he has by himself or his agent authorised in writing signed the memorandum for a number of shares, not less than his qualification, or taken from the company and paid or agreed to pay for his qualification shares or made and delivered to the Registrar for registration a statutory declaration that a number of shares, not less than his quali fication, are registered in his name [s. 140 (1)]. 4. The object of ss. 85 and 87 of the Companies (Consolida- Minimum tion) Act, 1008 in requiring in the cases of public companies a Subscription. 16 SECRETARIAL PRACTICE minimum subscription as a condition precedent to allotment and in. insisting that a company should not commence business unless shares held subject to the payment of the whole amount thereof in cash had been allotted to an amount not less than the minimum subscription was presumably to ensure that a company should have adequate means for its intended operations; but as under that Act the minimum subscription could be fixed at seven shares, that object was not necessarily attained. The Companies Act, 1928 (see s. 35), altered the law in this respect and now (under s. 39 of the Companies Act, 1929), before any allotment is made of any share capital offered to the public for subscription there must have been subscribed— (a) the amount stated in the prospectus as the minimum amount which in the opinion of the directors must be raised by the issue of share capital to provide for (i) the purchase price of any property purchased or to be purchased which is to be defrayed in whole or in part out of the proceeds of the issue. (ii) any preliminary expenses or underwriting commission payable by the company. (iii) the repayment of any moneys borrowed by the company in respect of any of the foregoing matters, and (iv) working capital, and (b) the sum payable on application for the amount so stated must have been paid to and received by the company. The amount so stated must be reckoned exclusively of any amount payable otherwise than in cash, and is referred to in the Act as the minimum subscription. Under the old law a sum paid by cheque could not be treated as paid to and received by the company until the cheque had been cleared [Mears v. Western Canada Co. (1905), 2 Ch. 353], but under s. 39 a sum is to be deemed to have been paid to and received by the Company if a cheque for that sum has been received by the Company in good faith and the directors have no reason for suspecting that the cheque will not be paid. The amount payable on application in respect of each share must not be less than five per cent. of the nominal amount of the share. 5. The allotment having been made, every director must, unless he has already done so, pay to the company on each of the shares taken or contracted to be taken by him, and for PROSPECTUS AND ALLOTMENT 47 which he is liable to pay in cash, an amount equal to the amount per share payable by the public on application and allotment (s. 94). 6. A statutory declaration by the secretary or one of the directors in the prescribed form (see Companies (Forms) Order, 1929, Form 43), must be filed with the Registrar (s. 94). This declaration vouches the following facts: (a) the amount offered for public subscription; (b) the amount of the minimum subscription; (c¢) the allotment of a number of shares not less than the minimum subscription; (4) the payment by every director of application and allotment money. Thereupon the Registrar is to issue his certificate entitling Registrar’s the company to commence business, the certificate being Certificate. conclusive evidence that the company is so entitled [s. 94 (3)]. It is important to remember that contracts made by a company before the date at which it is entitled to commence business are provisional only, but become binding on that date [s. 94 (4)). Consequently, if a company is wound up before it becomes entitled to commence business, it is not liable on any of its contracts [Otto Electrical Manufacturing Co. (1906), 2 Ch. 390]. Although the company, before obtaining a certificate entitling it to commence business, may not exercise its borrowing powers, it may nevertheless offer to the public debentures, simultaneously with the offer of shares, may receive application money on debentures, and may allot both shares and debentures {s. 94 (5)]. If a company does not issue a prospectus on or with reference to its formation, but desires to be in a position to allot shares, commence business and exercise its borrowing powers without making a public issue of shares. the necessary formalities are as follows: I. A statement in lieu of prospectus must be filled up, and signed by every person named therein as a director or proposed director of the company, or by his agent authorised in writing, and filed with the Registrar. The form of the statement in lieu of prospectus, showing the particulars it must contain is to be found in the fifth schedule to the Act [s. 40 (1), 94 (2)]. The restriction on naming a person as a director or proposed director in a prospectus imposed by s. 140 (1) apply (supra p. 45) apply also to a statement in lieu o’ prospectus. The particulars required by s. 40 are to a great extent gtatement identical with those which a prospectus is required to contain in lieu of by s. 35 and the fourth schedule of the Act; but the draftsman Prospectus. of a statement-in-lieu of prospectus must adhere to the form set forth in the fifth schedule. Commencement of Business, where no Public Issue. Tv SECRETARIAL PRACTICE 2. Where a company does not issue a prospectus on or with reference to its formation, or where it has issued such a prospectus, but has not proceeded to allot any of the shares offered to the public for subscription the statement in lieu must be filed before any allotment of shares or debentures can be made [s. 40 (1)], or the allotment may be void [ Jubilee Cotton Mills (1924), A.C. 958]. But if the statement is filed but is incorrect, a subsequent allotment is not invalid [Blair Open Hearth Furnace Co. (1914), 1 Ch. 390]. It would seem that a statement in lieu of prospectus must be filed though the company on its formation agree to allot shares with a view to the same being offered for sale and the offer for sale is filed pursuant to s. 38; for although the offer for sale is for all purposes to be deemed a prospectus issued by the company, it is an offer of shares for purchase, not for subscription and the offer for sale can hardly be said to be a prospectus issued by the company on or with reference to its formation. 3. Every director must, unless he has already done so, pay to the company on each of the shares taken or contracted to be taken by him, and for which he is liable to pay in cash, an amount equal to the amount per share payable on application and allotment on the shares payable in cash [s. 94 (2)]. 4. A statutory declaration [Form 444, Companies (Forms) Order, 1929], similar in most respects to that which must be filed by a company making a public issue, but with the necessary differences, must be filed with the Registrar, who will then issue his certificate entitling the company to commence business. It should be noted that under the Act of 1929 in the case of a company which does not invite public subscriptions a minimum subscription is not a condition precedent to obtaining a certificate that the company is entitled to commence business. In this case also contracts made by the company before the date at which it becomes entitled to commence business are provisional only, but become binding on that date. Contracts referred to in a prospectus or statement in lieu of prospectus cannot be varied prior to the statutory meeting (s. 113) except subject to the approval of that meeting (s. 36). Restrictions ~~ There are very stringent provisions of the Act as to first as to allotments. S. 39 (4) provides that, in the case of a company Allotment. 13king an initial public issue of shares, if the minimum subscription has not been subscribed, and the application money received, within forty days from the first issue of the prospectus (i.e. primd facie the date of the prospectus) all the PROSPECTUS AND ALLOTMENT 49 money subscribed is returnable to the subscribers without interest, and if any of the money has not been returned within forty-eight days from the issue, the directors are jointly and severally liable to return it with interest at 5 per cent. from the forty-eighth day. = A director, however, is not liable, if he proves that the default was not due to any misconduct or negligence on his part. Any provision binding an applicant to waive compliance with this subsection is void, [s. 39 (5)] S. 39 (4) only applies before allotment has taken place; after allotment the only remedies available are under s. 41 [Burton v. Bevan (1908), 2 Ch. 240]. S. 39 does not apply to any allotment of shares subsequent to the first allotment of shares offered to the public, [s. 39 (6).] S. 41 (1) provides that an allotment made, in the case of a company making a public issue of shares without the minimum subscription being subscribed, or the necessary application money received, or, in the case of a company not issuing a prospectus or not having allotted any of the shares offered for public subscription, without a statement in lieu of prospectus being delivered to the Registrar, may be voidable by the applicant at any time up to one month from the holding of the statutory meeting or, where the company is not required to hold a statutory meeting or the allotment is made after the statutory meeting, within one month from the date of allotment, notwithstanding that the company may be in liquidation. Notice of avoidance within the month, followed by prompt legal proceedings, is sufficient; the proceedings need not be actually commenced within the month [National Motor Mail Coach (1908), 2 Ch. 228]. Under the Act of 1go8 it was held that the limit of one month did not apply to companies registered before the Act of 1900, and making a public issue after the Act, since such companies could not hold a statutory meeting. Consequently it was held that in such cases an irregular allotment could be avoided at any time [Finance and Issue v. Canadian Produce Corporation (1905), 1 Ch. 37]. This cannot arise under the new Act, as express provision is made to meet the case of a company not required to hold a statutory meeting. By s. 41 (2) a director who knowingly contravenes, or permits or authorises an allotment in contravention of any of the provisions of sections 39 or 40 is liable to compensate both the company and the allottee for any loss, damages or costs sustained or incurred thereby. Proceedings to recover any such loss, damages or costs must be commenced within two years from the date of the allotment. It would appear that the amount of damages to which an allottee is entitled 50 ~ SECRETARIAL PRACTICE is the difference between the price paid for the shares and their real value at the time of allotment, such value being ascertained in the light of subsequent events. The loss to the company would appear to be the total nominal value of the shares if the applicant avoids the allotment. The meaning of ‘knowingly’ should not be overlooked. It means ‘with knowledge of the facts.’ ‘Ignorance or mistake of law cannot be admitted as an excuse for disobeying an Act of Parliament’ [see Twycross v. Grant (1877), 2 C.P.D. 469]. It would seem, then, that when once it has been proved that a director or other official of a company knows the facts, 7.e. that shares have been allotted in a particular manner, it must be assumed that he knows whether the particular manner adopted is the right method, and if it contravenes the law he will be liable. This chapter has thus far dealt with first allotments. It now remains to deal with other provisions of the Act, which relate to all allotments. In the case of a company making an offer of shares to the public, 4.e. issuing a prospectus, or its equivalent, the provision that the amount payable on application is not to be less than 5 per cent. of the nominal amount of the share [s. 39 (3)] applies to subsequent public issues as well as to the first [s. 39 (6)]. And the important requirements of s. 42 apply to all allotments by all public companies. Subsections (1) and (2) of that section run as follows: — Return as to (1) Whenever a company limited by shares or a company Allotments. }iited by guarantee and having a share capital makes any allotment of its shares, the company shall within one month thereafter deliver to the Registrar for registration— (a) a return of the allotments, stating the number and nominal amount of the shares comprised in the allotment, the names, addresses, and descriptions of the allottees, and the amount (if any) paid or due and payable on each share; and in the case of shares allotted as fully or partly paid up otherwise than in cash, a contract in writing constituting the title of the allottee to the allotment, together with any contract of sale, or for services or other consideration in respect of which that allotment was made, such contracts being duly stamped; and a return stating the number and nominal amount of shares so allotted, the extent to which they are to be treated as paid up, and the consideration for which they have been allotted. PROSPECTUS AND ALLOTMENT 51 (2) Where such a contract as above mentioned is not reduced to writing, the company shall within one month after the allotment deliver to the Registrar for registration the prescribed particulars of the contract stamped with the same stamp duty as would have been payable if the contract had been reduced to writing, and those particulars shall be deemed to be an instrument within the meaning of the Stamp Act, 1891, and the Registrar may, as a condition of filing the particulars, require that the duty payable thereon be adjudicated under section twelve of that Act. It will be noticed that not only has the contract with the company under which the shares are allotted, fully or partly paid up, to be filed, but also the contract constituting the title of each allottee. As regards the statement of the consideration, it appears that it will suffice if it is stated generally (the nature of the consideration being disclosed), as was required to be done under section 25 of the Companies Act, 1867, repealed in 1900 [Frost & Co. (1899), 2 Ch. 207]. The Court is enabled to grant relief in certain cases of omission to deliver to the Registrar any document required by this section to be delivered. The relief may apparently be granted in three cases, ¢.e. when the Court is satisfied (1) that the omission to deliver was accidental, or (2) that it was due to inadvertence, or (3) that it is just and equitable to grant relief [s. 42 (3)]. It must be remembered that the omission to deliver the contract or particulars does not render the allottee liable to pay for the shares in cash, as was the case under s. 25 of the Companies Act 1867 (repealed by s. 33 of the Act of 1900), but only exposes the officers of the company to penalties, so that the relief is merely against the penalties. It will be convenient here to note that under the new Act the Court is empowered to order the company and any officer thereof to make good any default in filing any return or other document with the Registrar within the time limited by the order and that any order so made will be without prejudice to any liability to penalties under any other section (s. 315]. The company or any of its officers responsible for the default may be ordered to bear the costs of the applica tion to the Court for such an order. A formal prospectus is always accompanied by appropriate Application application forms. A form of application requires to be for Shares. carefully prepared, and may have attached to it a form of receipt for the application money, if it is desired to issue a receipt. It is more usual, especially in the case of large public issues, for the application forms to contain a footnote 32 SECRETARIAL PRACTICE to the effect that no receipt will be issued for the application money; the receipt being provided in the allotment letter or letter of regret. "No form of application can lawfully be issued unless accompanied by a prospectus complying with s. 35, except (I) in connection with a bond fide invitation to underwrite, (2) in relation to shares or debentures not offered to the public [s. 35 (3)],—as to meaning of public, see p. 44— and (3) having regard to s. 35 (5) where the offer is made to existing shareholders or debenture holders of the company concerned. The effect of s. 35 (3) is clearly to make the issue of an application form with the usual abridged prospectus published in the newspapers. illegal; and a breach of the subsection involves liability to a penalty of £500 for each breach; semble, every issue of a form is a separate breach. As appears above, the prohibition does not apply to forms of application for private subscriptions, but great care will be necessary to make sure that the invitation cannot be construed as an invitation to the public. This subsection, unlike the corresponding section applicable to foreign companies [s. 354 (1) (b)] does not contain the words ‘or an intended company,” but having regard to s. 35 (1) it will probably be construed as applying to forms of application for shares in an intended company and to forms of application for the purchase of shares as well as to forms of application to subscribe for shares. In Appendix F will be found the following application forms: — No. 8. Application for bonds or stock. No. 9. Application for shares, where no receipt for application money is issued. No. 10. Application for shares, with receipt for application money attached. All the above forms refer to the prospectus and embody its terms and conditions. as part of the contract. Nos. g and 10 also refer to the memorandum and articles, the terms and conditions of which are also expressly embodied in the contract. The applicant, however, when registered as a member, would necessarily become bound by them. No. 8 does not refer to the memorandum and articles. The bondholder, or debenture stock holder, will be a creditor and not a member of the company. None the less the memorandum and articles are public documents, and he is fixed with knowledge of their contents. On receipt of the applications, the secretary will have a series of application and allotment sheets prepared by. his PROSPECTUS AND ALLOTMENT 53 staff. It need hardly be pointed out that there is need for the greatest accuracy in this work. A Form of Application and Allotment Sheet will be found in Appendix F (Form 11). The board will meet in due course, and, if the minimum Allotment. subscription has been reached, and they have no reason for suspecting that the cheques for application money will not be paid, will proceed to allot. A form of resolution to allot will be found in Chapter XIV. The secretary’s business will then be to dispatch the allotment letters and letters of regret. Form No. 12 is a form of Allotment Letter with receipt for allotment money only attached. Form No. 13 is a form of Allotment Letter, with receipts attached both for allotment money and for payment in full. Form No. 14 is an Allotment Letter, constituting an interim certificate, with receipt forms for all subsequent instalments attached. In the absence of any provision to the contrary in the conditions of issue of any shares, debentures, or debenture stock, a company must within two months after allotment complete and have ready for delivery the certificates for shares or debenture stock, or the debentures, as the case may be (s. 67). It is sometimes more convenient to postpone the issue of certificates until the shares or stock are fully paid, and it is therefore desirable to make provision accordingly. Without any such provision, interim or provisional certificates must be issued, with receipt forms upon them which are signed by the company’s bank, upon production of the certificate and payment of the instalments as they become due. Form 14 may be used for the purpose. A failure to comply with s. 67 exposes the officers of the company to pecuniary penalties and the Court may limit a time within which the default must be made good [s. 67 (2) (3)]. Letters of allotment are often issued with letters of renunciation attached, thus enabling the original allottee to renounce the shares comprised in the letter of allotment in favour of a third party. Where this course is adopted, a form of acceptance must also be attached for signature by the third party in whose favour the shares are renounced. Form No. 15 in Appendix F is a letter of allotment with letter of renunciation and form of acceptance attached. Both the letter of allotment and letter of renunciation require stamp duty of 6d. The duty chargeable on the letter of renunciation may be denoted by an adhesive stamp cancelled by the person executing the letter of renunciation. See also Forms 38 and 39. If the allotment is renounced the original allottee will never appear on the register, the first name entered on the register New Issue. 54 SECRETARIAL PRACTICE in respect of the shares renounced being the party in whose favour they were renounced. The execution of the letter of renunciation and the signature of the form of acceptance has a similar effect to a transfer of the shares, but it is not in law a transfer of shares attracting ad valorem duty, but an assignment of the right of the original allottee to be registered in respect of the shares. See re Pool Shipping Co. (1920), 1 Ch. 251; Collins v. Associated Greyhound Racecourses (1930), I Ch. p. 1. A time limit must be fixed within which letters of renunciation must be lodged or in default the original allottee will be entered in the register. As soon as that time has expired the secretary will have to inspect carefully all the forms that have been lodged. If the forms of renunciation and acceptance have been duly completed, he will enter the acceptor in the register instead of entering the original allottee; while if a form is defective, he will have to enter the original allottee. The question of what is the longest period which can safely be limited within which the letters of renunciation must be lodged is one of considerable difficulty. There is no statutory provision imposing any limit; but it is obvious that in the case of shares offered for subscription before the statutory meeting has been held the period should not be longer than will permit of the register being duly completed before the notice convening the statutory meeting is sent out. Unless this course is adopted, many of the subscribers would not receive the statutory report sent out for the statutory meeting. Again it is obviously inconvenient in view of s. 108 that shares should be issued upon such terms that at the date of the annual return no one is entered on the Register in respect thereof. No letters of renunciation should therefore be outstanding when the notice convening the annual meeting is sent out. It must also be borne in mind that if letters of renunciation were allowed generally to be outstanding for long periods, the law would probably be altered in order to prevent evasion of the ad valorem duty payable on transfers. In these circumstances it is thought that as a rule the period allowed should not exceed one month and in any event not be extended more than a few days after the date for payment of the final instalment on the shares. The period last mentioned will enable issues to be placed, which is the primary and justifiable object of the issue of letters of allotment with letters of renunciation attached. Where a company makes an issue of new shares or debentures and desires to give existing shareholders or debenture holders a preferential right to apply for them in proportion PROSPECTUS AND ALLOTMENT 55 to their existing holdings, a circular letter is commonly sent out accompanied by a specific offer to each individual holder, on which is a form of acceptance of the offer, with receipt for the first instalment attached. If it is desired that the shareholder or debenture holder should be able to renounce his right and nominate another person to exercise it, the form may include a letter of renunciation. Form 15 may be used for this purpose, either wholly or in part, according to the circumstances of the case. An allotment letter requires a penny stamp if the value of the shares allotted is less than £5, and a sixpenny stamp (impressed) if the value is £5 or over. The same scale of duty applies to letters of renunciation, but the stamp may be adhesive even if the value is over £5 (Finance Act, 1899, 62 & 63 Vict. c. 9, s. 9) The fractional part of a share must be stamped on the same basis, both in the case of letters of allotment and letters of renunciation (Revenue Act, 1909, 9 Ed. VII, c. 43, s. 9).- The bankers’ receipt, if attached to the allotment letter, does not require a separate stamp [London & Westminster Bank v. Inland Revenue Commissioners (1900), 1 Q.B. 166]. Inasmuch as the agreement to become a member is often constituted by application and allotment, and agreement to become a member followed by entry on the register constitutes membership of a company (s. 25) with all its attendant rights and liabilities, it is important to appreciate the effect of a number of legal decisions on the subjects of application and allotment. The following are amongst the chief points to be observed with regard to an application for shares: It need not be in writing [Levita’s Case (1867), 3 Ch. App. 36]. It may be withdrawn before acceptance, but the offer remains open until the letter of revocation is actually received [Byrne v. Van Tienhoven (1880), 5 C.P.D. 344]. The withdrawal need not be in writing; and may be communicated to the secretary, or, in his absence, even to a clerk in charge [Truman's Case (1894), 3 Ch. 272}. The doing of some act inconsistent with the continuance of the offer, done to the knowledge of the company, may be an effective withdrawal [Dickinson v. Dodds (1876), 1 Ch. D. 463]. The application may be made by an agent [Hannan’s Empress Co. (1896), 2 Ch. 643]; but unless the agent informs the company that he takes the shares as agent and not as principal he may be personally liable in respect of them [Southampton Steamboat Company (1864), 4 De G.J. & S. 200]. Moreover, if the allotment is made to the agent and he renounces in favour of Decisions as fo Applications. Decisions as to Allotment. 56 SECRETARIAL PRACTICE an undisclosed principal, the principal may be unable to rescind on the ground of misrepresentation contained in the prospectus issued to the agent [Collins v. Associated Greyhound Racecourses Limated (1929), C. 45, T.L.R. 519]. Application in a fictitious name, followed by allotment, renders the applicant liable, and his real name may be entered on the register [Hercules Insurance Co., Pugh & Sharman’s Cases (1872), 13 Eq. 566]. Application by a father in the name of his infant son renders the father liable [Imperial Mercantile Association, Richardson’s Case (1875), 19 Eq. 588]. Application subject to a condition precedent will not give rise to a contract unless the condition is performed [Aldborough Hotel Co. (1870), 4 Ch. App. 184; where a builder applied on condition that he should have the building contract]. But if the condition is subsequent—in other words, if it can be construed as a separate agreement, collateral to the agreement to take shares—the applicant will be liable on the shares notwithstanding breach of the collateral agreement [Richmond Hill Hotel Co., Elkington’s Case (1867), 2 Ch. App. 511]. Allotment ‘is generally neither more or less than the acceptance by the company of the offer to take shares’ [per Chitty, J. Nicol's Case (1885), 29 Ch. D. 421]. Below are some of the more important decisions on allotment: An improperly constituted board of directors has no power to act for the company, and therefore an allotment by such a board will be invalid [re Homer District Gold Mines (1889), 39 Ch. D. 546]. But an allotment by an irregularly constituted board may be subsequently ratified by a regular board [Portuguese Copper Mines, Badman's and Bosanquet's Cases (1890), 45 Ch. D. 16]. Directors cannot delegate their power to allot [Leeds Banking Co., Howard's Case (1866), 1 Ch. App. 561], unless by the articles they are authorised to do so [Harris's Case (1871), 7 Ch. App. 587]. The power of directors to allot is a fiduciary power, which must be exercised bond fide for the benefit of the company as a whole, and not for their own ends, e.g. to maintain their control, or to defeat the wishes of the majority of the shareholders [Piercy v. S. Mills & Co. (1920), 1 Ch. 77; see also Gas Meter Co. v. Diaphragm, etc., Co. (1925), 41 T.L.R. 342]. Allotment must be made within a reasonable time after application; otherwise the allottee may refuse to accept the shares [Ramsgate Hotel v. Montefiore (1865), 4 H. & C. 164]. It must be communicated, though the communication need not necessarily be in writing [Gunn's Case (1867), 3 Ch. App. 40; Lewta’s Case (1867), 3 Ch. App. 30]. Generally PROSPECTUS AND ALLOTMENT 57 the contract is complete as soon as the letter of allotment is posted, even though it is never received [Household Insurance Co. v. Grant (1879), 4 Ex. D. 216]. Posting means putting the letter under the control of a postal official authorised to receive it [London and Northern Bank, ex parte Jones (1900), 1 Ch. 220]. But to make a complete contract the allotment must correspond with the application; e.g. if A applies for 100 shares, and 50 only are allotted to him, he is not bound to take them, unless the application contained such words as ‘or such less number as may be allotted to me’ [ex parte Roberts (1852), 1 Drew, 204]. No fresh condition can be imposed by the allotment. If it is complicated by the addition of a new term or condition there will be no contract [Jackson v. Turquand (1869), L.R. 4 H.L. 305]. Shares should never be allotted to an infant, for he can afterwards repudiate the contract, and obtain. repayment of the money paid for them, and have his name removed from the register; but he cannot recover money already paid for the shares unless there has been a total failure of consideration, i.e. unless it can be shown that the shares could not have been sold [Steinberg v. Scala (Leeds) (1923), 39 T.L.R. 542, overruling Hamilton v. Vaughan-Sherrin Electrical Co. (1894), 3 Ch. 589]. But if he is registered and acts as holder of the shares after attaining his majority [Lumsden’s Case (1868), 4 Ch. App. 31], or does not repudiate within a reasonable time [Yeoland Consols (1888), 58 L.T. 922], he will be liable. Knowingly to allot to an infant is a misfeasance [ex parte Wilson (1873), 8 Ch. App. 45]. CHAPTER VII OFFERS FOR SALE AND KINDRED MATTERS Offers for sale under 8. 38. UNDER the law in force prior to the Companies Act, 1928, it was a common practice for a company to accept the offer of a single subscriber for the whole of an issue of shares or debentures, leaving the subscriber to make an offer for sale of such shares or debentures to the public. Such offer for sale was not a prospectus within the Companies (Consolidation) Act, 1908, and accordingly none of the provisions of that Act as to prospectuses or as to the liability of directors for misstatements in a prospectus applied to such offer for sale. The only remedies open to a purchaser in the event of his being misled by some misrepresentation in the offer for sale were (a) rescission if he discovered the truth while rescission was possible, and (b) an action for deceit if he could prove that the misrepresentation had been made fraudulently. Under the new law (see s. 38 of the Companies Act, 1929) these remedies are preserved and it is further provided that where a company allots or agrees to allot any shares in or debentures of a company with a view to all or any of such shares or debentures being offered for sale to the public, the document by which such offer for sale is made shall for all purposes be deemed to be a prospectus issued by the company. Accordingly s. 34 (as to filing) s. 35 (1) and the Fourth Schedule (as to particulars to be included in prospectus), s. 35 (2) (as to the invalidity of a waiver clause), s. 36 (as to restrictions or alterations of terms of contracts mentioned in the prospectus), and s. 37 (as to the liability of directors, etc., for statements in a prospectus) will apply to such an offer for sale. In addition to the matters required by s. 35 to be included in a prospectus the offer for sale must state [see s. 38 (3)] (i) the net amount received or to be received by the company in respect of the shares or debentures to which the offer relates, and (ii) the place and time at which the contract for the allotment of such shares or debentures may be inspected. Under s. 38 (2) the fact that the offer for sale of the shares or debentures is made within six months after OFFERS FOR SALE AND KINDRED MATTERS 59 the allotment or agreement to allot, or that at the date when the offer is made the whole consideration to be received by the company for the shares or debentures has not been so received, is primd facie evidence that the allotment or agreement to allot was made with a view to an offer for sale to the public. Of course if the allotment was in fact made with a view to the shares or debentures being offered to the public the section will apply to the offer, even though it is made more than six months after allotment and after the whole consideration has been received by the company. Under s. 38 (3) the copy of the offer for sale which is delivered to the Registrar for filing pursuant to s. 34, must be signed by the persons making the offer. S. 38 (4) contains special provisions as to the signature of the offer for sale where the offer is made by a company or firm. Having regard to s. 34 the copy of the offer for sale to be delivered for registration must in all cases also be signed by every director or proposed director of the company. It is not quite clear whether s. 35 (3), which prohibits the issue of application forms without a prospectus complying with s. 35 applies to application forms accompanying offers for sale, but the language of the sub-section appears wide enough to cover such forms of application. S. 38 only applies to offers for sales of shares by a company as defined by s. 380 (see supra p. 1), where the original allotment or agreement to allot was made with a view to an offer for sale to the public. It does not apply where the shares offered were not allotted or agreed to be allotted with a view to an offer for sale to the public. It would appear, however, that in such a case if the offer is made to the public it must be accompanied by a prospectus where the offer is issued with a form of application; for under s. 35 (3) as regards companies within the meaning of the Act it is unlawful to issue a form of application for shares unless the form is issued with a prospectus complying with s. 35. Offers to individuals are not affected by any of the sections mentioned above, but by s. 356 (1) house-to-house canvassing is entirely prohibited. This sub-section presumably only applies where the offer is made verbally. Moreover, ‘house’ in this sub-section does not include an office used for business purposes. Offers in writing are dealt with by s. 356 (2) which provides that except in certain cases ‘it shall not be lawful to make an offer in writing to any member of the public (not being a person whose ordinary business or part of whose ordinary business it is to buy or sell shares. whether as principal or bo SECRETARIAL PRACTICE agent) of any shares for purchase, unless the offer is accompanied by a statement in writing (which must be signed by the person making the offer and dated) containing such particulars as are required’ by sub-section 4 of the section, ‘to be included therein and otherwise complying with the requirements of this section, or, in the case of shares in a company incorporated outside Great Britain, either by such a statement as aforesaid or by a prospectus complying with ss. 354 and 355. The language of s. 356 (2) seems wide enough to cover offers to members of the public even though made to the public generally and accompanied by application forms, notwithstanding that if the offer is accompanied by an application form it would appear to be necessary also to issue therewith a prospectus. See ss. 35 (3) and 354 (I). The expression ‘shares’ in this section means the shares of any company, whether a company within the meaning of the Act or not, and includes debentures and units [s. 356 (7)]. Accordingly shares and debentures of any company, wherever or however, incorporated, are within the ambit of the section. The written statement must not contain any matter other than the particulars required by sub-section 4 of the section and must be in characters at least as large and legible as any included in the offer or in any document sent therewith. In this section the word ‘public’ is given a wide meaning, for it is expressly provided that ‘a person shall not in relation to a company be regarded as not being a member of the public by reason only that he is a holder of shares in the company or a purchaser of goods from the company.” The section affords no guide as to what will prevent a person being regarded as a member of the public. See p. 44. The exceptions referred to in s. 356 (2) are (1) where the shares to which the offer relates are shares which are quoted on, or in respect of which permission to deal has been granted by any recognised stock exchange in Great Britain and the offer so states and specifies the stock exchange, (2) where the shares to which the offer relates are shares which a company has allotted or agreed to allot with a view to their being offered for sale to the public, (3) where the offer was made only to persons with whom the person making the offer has been in the habit of doing regular business in the purchase or sale of shares. The Act does not define ‘regular business,” but obviously one or two isolated transactions would not amount to regular business. An offer for sale of shares within the second exception, though exempt from s. 356 will be within the ambit either of OFFERS FOR SALE AND KINDRED MATTERS 61 s. 38 or of s. 354 (3) if the company is a company within the meaning of the Act or a foreign company. Penalties are imposed for any contravention of s. 356, and where a person is convicted in England of having made an offer in contravention of the section, the Court before which he is convicted may order that any contract made as a result of the offer shall be void and give such consequential directions as to repayment of the money or re-transfer of the shares as it thinks fit [s. 356 (8)]. If a company is convicted of an offence under the section every director and officer concerned in the management of the company will be guilty of the like offence unless he proves that the act constituting the offence took place without his knowledge or consent [s. 356 (6)]. CHAPTER VIII TRANSFER AND TRANSMISSION OF SHARES Register of Members. THE duties of a secretary in the matters of the transfer and transmission of shares are amongst the most difficult and responsible within his province. There is very little statute law on the subject, but a great deal of case law, and a great deal of somewhat complicated practice. It is proposed to deal first with transfers and then with transmission, with special reference to companies under the Companies Act. Inasmuch, however, as a company’s register of members plays an important part in connection with both transfer and transmission, it may be as well to clear the ground by a few words as to the register and the proper method of keeping it. The register of members is one of the books which a company under the Companies Act is required to keep, provision for that purpose being made by s. 95 of the Companies Act 1929. The register of members, which may be kept in one or more books, must contain:— (a) The names, addresses, and occupations (if any) -of the members; (b) A statement of the shares held by each member, distinguishing each share by its number; (¢) A statement of the amount paid or agreed to be considered as paid on the shares of each member; (d) The date at which each person was entered on the register as a member; (e) The date at which any person ceased to be a member. Where the company has converted any of its shares into stock and given notice thereof to the Registrar, the register must show the amount of stock held by each member instead of particulars (b) and (c) supra. In practice the register, to be of real value, must necessarily shew a good deal more than the matters stated above. The transfer of part of a holding must be provided for and the resulting balance shewn, and there should be references, 62 TRANSFER AND TRANSMISSION OF SHARES 63 both in the case of shares acquired by a member by transfer and in the case of shares transferred by him, to the transfer numbers. Some Companies provide also for the numbers of the share certificates issued being shown in the Register of members. A form of Share Register will be found in Appendix F (Form 28). In the case of the issue of share warrants, the name of the holder must be struck out of the register, as if he had ceased to be a member, and there must be entered in the register (i) the fact of the issue of the warrant; (ii) a statement of the shares or stock included in the warrant, distinguishing each share by its number; and (iii) the date of the issue of the warrant. Until the warrant is surrendered, these particulars are to be deemed to be the particulars required by the Act to be entered in the register. On the surrender of the warrant the date of the surrender must be entered [s. 97 (1) (4)]. On surrendering the warrant for cancellation the bearer is entitled to be registered as a member in the ordinary way [s. 97 (2)]. In the case of joint accounts, it is undesirable for the number of holders to exceed four; but to enable a company to insist on this limitation its articles should contain an appropriate provision, failing which the names of all joint holders, however many, must be entered on the register. If more than one account is allowed in the same name or names, appropriate designations for the respective holdings would be ‘Jones No. 1 Account’, ‘ Jones No. 2 Account,” and so on. Joint holders may, in order that their voting rights may be fully exerciseable have their holdings split, a different name appearing first in each entry in the register [Burns v. Siemens Brothers (1919), 1 Ch. 225]. Any such application must be joint by all the holders. As regards alterations of names in the register, in the case of the marriage of a female shareholder, the marriage certificate should be produced before the necessary alteration is made. A Form of Request is useful as giving a specimen of the new signature. In other cases of change of surname the deed-poll, or copy of the London Gazette containing the notification, should be produced. Any other documentary evidence should be verified by a statutory declaration. In all the above cases no new share certificate need be issued, but the existing certificate should be produced and the new names enfaced thereon. There is a prohibition against the entry of trusts on the Trusts register. ‘No notice of any trust, express, implied, or constructive, shall be entered on the register. or be receivable Share Warrants. b4 SECRETARIAL PRACTICE by the Registrar, in the case of companies registered in England (s. 101). ‘The object of the section,” says Lord Wrenbury, ‘is (1) to relieve the company from taking notice of ‘equitable interests in shares, and (2) to preclude persons claiming under equitable titles from converting the company into a trustee for them’ (Buckley on the Companies Acts, 11th edition, p. 254). A company receiving notice of any lien or equitable interest should accordingly decline to recognise it. A suitable form of letter by the company, in reply to a notice of lien or equitable interest, is given in Appendix F (Form 29). Articles of association usually contain a provision which goes further than s. 101, and is to the effect that the company shall be entitled to treat the registered holder of a share as the absolute owner, and shall not be bound to recognise any equitable or other claim to, or interest in, such share on the part of any other person. Such an article appears to be ineffectual, at all events, so far as non-members of the company are concerned; for notice of the interest in shares by a person, other than the registered holder, will affect the company in its capacity as a trader, although it does not affect it in its duty of keeping the register [Mackereth v. Wigan Coal Co. (1916), 2 Ch. 293]. The holder of an equitable interest in shares may get the Court to interfere in his behalf [Binney v. Ince Hall Coal Co. (1866), 35 L.J. Ch. 363], and he can restrain the company from allowing the shares to be transferred by taking proceedings under the Rules of the Supreme Court, Order 46, Rule 4, if he so desire. Otherwise the company is not bound by any notice of equitable interests which it may receive, so that successive mortgagees will date entirely according to priority of charges [Société Générale v. Walker (1886), 11 A.C. 20]. If a company, having a lien over its shares for all debts due from the holder thereof, receives notice that another person holds the shares as security for a debt due, the company cannot claim priority for a debt which became due to the company from the holder after such notice has been received [Bradford Banking Co. v. Briggs (188%), 12 A.C. 29]. As between the registered shareholder and his cestus que trust in their relation to the company, the former is the person who is liable for all payments which have to be made in respect of the shares, and this liability is not limited to the amount of the trust estate [see Muir v. City of Glasgow Bank (1879), 4 A.C. 337]. The beneficial holder is, however, bound to indemnify the registered holder, and at any rate where he is TRANSFER AND TRANSMISSION OF SHARES 65 sut juris and entitled to the whole beneficial interest in the shares, his personal obligation is not confined to the extent of the trust property [Hardoon v. Belilios (1901), A.C. 118]. This right to an indemnity cannot be enforced while it is uncertain whether calls will be made [Hughes-Hallett v. Indian Mammoth Mines (1882), 22 Ch. D. 561], but can be enforced if there is evidence that calls will be made [Hobbs v. Wavyet (1887 36 Ch. D. 256]. Reference has to be made to the share register more often probably than to any other statutory book of the company, but prior to the Act of 1928, there was no statutory obligation to keep an index to the register. Now under s. gb of the Act of 1929 every company having more than fifty members must, unless the register is in such form as to constitute in itself an index, keep an index (which may be in the form of a card index) of the names of its members. The index must enable the account of each member in the register to be readily found, and in the event of any alteration in the register of members, the company must, within 14 days thereafter, make any necessary alteration in the index. It is often a source of trouble to the secretary to find a simple and reliable method of index to the register, and at the same time, especially in companies having an extensive register, a method whereby reference to the register itself is minimised by the recording of the various notes relative to any particular account in such index. Probably the most usual form is for the register to contain all the necessary particulars, including not only the address of the shareholder as originally registered, but also the various changes of his address from time to time, together with a note as to payment of dividend, and special instructions as to the sending of reports and statements, notes with regard to orders of Court, notice in lieu of distringas, powers of attorney, etc., with a simple index of the name with the folio in the share register. This method is doubtless sufficient in a small company where the clerk handling the books readily acquires an intimate knowledge of the accounts, and can turn up any particular account without delay; but on a big register it is very cumbersome, and does not lend itself to ready handling when there is work in hand requiring a considerable staff or urgent completion. Loose-leaf registers which already are widely used by companies of any size will probably be used by an increasing number of companies in the future in view of the requirements of ss. 96 and 108 of the Act, as thereby the register can be kept in absolute alphabetical order To Index to Share Register. Card Index. 66 SECRETARIAL PRACTICE safeguard a loose-leaf register the sheets should be numbered serially and a record kept of the number of every sheet taken from stock for use in the register. The printers of the sheets would supply a certificate of the number of sheets in each supply order, and the auditors would check off from it the sheets used. Another method is to have an index-book to the share register containing such particulars of the proprietors as to minimise the necessity for reference to the register itself. A form of Index to Share Register, showing the particulars it may contain, will be found in Appendix F (Form 30). A very useful system is the card-index which has been introduced by many companies, a form of which is also given (Form 31). The card index, though containing very full particulars, must not be allowed to take the place of the share register, as it would be obviously improper, and might, unless the cards contained all the particulars required to be contained in the register, be illegal solely to rely on loose cards for so important a purpose, so that while all particulars are entered in the register for safety, most of them are reproduced on the cards for easv reference and handling. It will be observed that the card comprises at a glance full particulars of the proprietor’s holding in the several classes of shares or stock, together with his full name, original and altered addresses (if any), instructions with regard to dividend, and any other matters of a like nature, with a file number, if the filing system is numerical, where any correspondence relating to his account may be found, and the number of the folio where his account may be found on the share register. In the ordinary course the alteration to the card in regard to the proprietor’s holding is not done in the same detail as in the share register. Supposing, for example, that several transfers are dealt with on one date, while they are, of course, posted severally into the register, the card will show simply the date and the total value of the several transfers either into or out of the account as the case may be. It is useful to provide a third column under each heading, where the balance of the account may be entered after every operation. An important point to note is the facility with which any particular work can be accomplished with the cards; for example, in the event of the directors requiring the urgent dispatch of a circular to the stockholders, the cards may be divided into small quantities among several members of the staff for the purpose of addressing the necessary envelopes, TRANSFER AND TRANSMISSION OF SHARES 67 and the dispatch of the circular consequently achieved in a few hours. Similarly, the dividend sheets may be spread over a larger staff than is possible when reference has to be made to the books for the purpose, while, as stated above, the old-time objection to the use of the card is met by the retention of the full particulars in the share register. Many companies now use an addressing machine which greatly facilitates the work. Other points of advantage in the card system are (a) the facility for keeping the index of names in strict alphabetical order, and (b) after the annual return has been made to Somerset House, the ‘dead’ cards may be taken out and kept separately, thus starting each year with a clean index. We may now proceed to the subject of the transfer of shares. There are five provisions of the Act, dealing with transfers These are set out below: — Right of Transfer. S. 62 (1). The shares or other interest of any member in a company shall be personal estate, transferable in manner provided by the articles of the company, and shall not be of the nature of real estate. S. 63. Notwithstanding anything in the articles of a company, it shall not be lawful for the company to register a transfer of shares in or debentures of the company unless a proper instrument of transfer has been delivered to the company: provided that nothing in this section shall prejudice any power of the company to register as shareholder or debenture holder any person to whom the right to any shares in or debentures of the company has been transmitted by operation of law. S. 64. A transfer of the share or other interest of a deceased member of a company made by his personal representative shall, although the personal representative is not himself a member of the company, be as valid as if he had been such a member at the time of the execution of the instrument of transfer. S. 65. On the application of the transferor of any share or interest in a company the company shall enter in its register of members the name of the transferee in the same manner and subject to the same conditions as if the application for the entry were made by the transferee. S. 66. (1). If a company refuses to register a transfer of anv shares or debentures, the company shall, within J SECRETARIAL PRACTICE two months after the date on which the transfer was lodged with the company, send to the transferee notice of the refusal. Shares, then, may subject to s. 63 be transferred in manner provided by the articles of the company. The right to transfer was given by s. 22 of the Companies Act, 1862 (which s. 62 of the new Act follows) and unless restricted by the articles it is an absolute right [Weston’s Case (1868), 4 Ch. App. 20]. The mode of transfer and the restrictions on the right to transfer may vary in different companies to almost any extent. As regards shares not fully paid there are usually restrictions on their transfer, but in the case of fully paid shares the Stock Exchange regulations require that there shall be no restrictions if an official quotation, or permission to deal is to be obtained. It will be noted that the effect of s. 63 is to put a stop to the practice which had grown up of effecting transfers by word of mouth without written instrument. If there are no restrictions in the regulations, a member may transfer to anyone, even though the company be in extremis and the transferee a man of no substance, so long as the transfer is bond fide in the sense that the transferor retains no interest in the shares, and whether such is the case is a question of fact [Mexican and South American Co., De Pass’s Case (1859), 4 De G. & J. 544; Discoverers’ Finance Corporation, Lindlar's Case (1910), 1 Ch. 312]. But if the articles contain a clause authorising the directors to refuse registration, a transfer, which directors have registered, may be set aside, if registration was obtained by the transferor by actively misrepresenting or by passively concealing the truth; and, whether or not the articles contain a clause authorising the directors to refuse registration, a transferor cannot escape liability where the opportunity for registration has been obtained fraudulently, or in breach of some duty owed to the company [Discoverers’ Finance Corporation, Lindlar’s Case (1910), 1 Ch. 312]. Where articles provide that shares may not be transferred without the consent of the directors, there is no obligation to obtain their consent before executing transfers; and a director cannot, by wilfully refusing to attend board meetings, prevent the registration of a transfer [Copal Varnish Co. (1917), 2 Ch. 349]. The procedure on the transfer of shares, in its simplest form, is for the seller to execute a transfer, and to hand it with the relevant certificate to the purchaser, who, after executing the transfer properly stamped, lodges it with TRANSFER AND TRANSMISSION OF SHARES 69 the certificate at the company’s office for registration. The transfer, if in order, is then passed by the directors and the purchaser’s name entered on the register in place of the seller's. The decision in Birkett v. Cowper-Coles (35 T.L.R. 208) to the effect that, on a sale of shares, the obligation to prepare a transfer is, as a general rule, on the purchaser, was based on a decision in 1843 dealing with the transfer of shares in a railway company, and appears to be in conflict with the recognised practice, which practice does not appear to have been questioned by the Courts in the case either of sales effected personally or of sales effected through brokers [see Skinner v. City of London Marine Insurance (1885), 14 Q.B.D. at p. 887, and London Founders’ Association. v. Clarke (1888), 20 Q.B.D. 576]. But, shares being generally bought and sold through brokers, the exigencies of business and the practice of the Stock Exchange have amplified the procedure. When a seller is only disposing of part of his holding, his broker, having effected a sale, presents the transfer with the relative certificate at the company’s office, whereupon the secretary or his responsible deputy, certifies on the transfer that the certificate has been lodged (see below). The transfer, so “certified,” is handed by the seller’s broker to the purchaser's broker, and it thus becomes good delivery under the rules of the Stock Exchange. and transactions take place in this way every day. The form of transfer, which it is the duty of the seller's broker to prepare, is often prescribed by the articles, and in that case the directors may refuse to register a transfer not in such form. But, where a transfer is required to be ‘in the usual common form,” (and the Stock Exchange regulations for obtaining permission to deal, require that the articles should provide for the common form being used), directors cannot refuse to register it because it omits immaterial particulars—e.g. the address of the transferor and the denoting numbers of the shares, if both are known to the directors and there can be no ambiguity [re Letheby & Christopher (1904), 1 Ch. 815]. The importance of uniformity in the form of transfers can hardly be over-estimated, and fortunately there is a common form which is generally used. This will be found in Appendix F (Form 16). It has been suggested that an addition should be made to the common form of the words ‘being of full age,” after the words ‘and I, the said transferee,” in order to avoid the possibility of the shares being registered in the name of a Form of Transfer. ~0 SECRETARIAL PRACTICE minor. Directors should not sanction a transfer to an infant, for he can repudiate the shares either before or on coming of age, and although if the infant has not come of age at the commencement of a winding up, the transferor is primd facie liable in respect of the shares, the company may have precluded itself by laches from putting the transferor on the register. In view of the difficulties in the way of ascertaining in every case that the transferee is of full age, it is reasonable to assume that it is the case; if, however, there is reason to believe that he is not of full age, he should not be entered on the register. (See the notes appended to Chapter IX.) It is usual for the articles to provide that transfers shall be signed both by the transferor and the transferee; but even in the absence of such a provision, where the articles do not prescribe any particular form of transfer but it has been the practice to require the execution of both the transferor and the transferee, the directors may decline to register a transfer not so executed [Marino's Case (1867), 2 Ch. App. 596]. It should also be mentioned that the company may at its discretion waive the transferee’s signature, but should never do so if the shares are not fully paid. The regulations may or may not require a transfer to be by deed. This variation is especially important in the case of blank transfers. Where a transfer without seal is sufficient, the addition of a seal does not render the instrument less effectual [Ortigosa v. Brown, Janson & Co. (1878), 47 L.].Ch. 168]. Where a deed is necessary, the directors have no power to dispense with it. [Murray v. Bush L.R. 6—L. 50.] Certification ~~ All companies ought to certify transfers, for while there on:Transfers. is no statutory obligation to certify, it may reasonably be argued that certification is part of the business and incidental to the act of registering transfers. Transfers may be certified although unstamped,! or undated, but not if the transferee’s name is not stated. A transfer should be certified although a call has been made which is not yet payable, but the call must be paid before the transfer is accepted for registration. If the seller is the transferee on a transfer which has not yet been registered, it is the usual practice not to certify the transfer until after the lapse of a sufficient time to enable the transferor of the first transfer to communicate with the company if necessary. (See Form 18.) : 1A secretary so certifying is not enrolling, registering, or entering the transfer within the meaning of s. 17 of the Stamp Act, 1891; but a secretarv should, of course. not register an unstamped transfer. TRANSFER AND TRANSMISSION OF SHARES 71 A rubber stamp is commonly used to certify transfers, the signature of the secretary or registrar being added in a space left for the purpose. The certification should always be signed and not merely initialled. The date also should be inserted. The following form should be adopted: — Certificate for shares [or stock] has been lodged at the Company's office. Date For the Company, Limited. , Secretary. (Address.) When a transfer is presented for certification before the transferor has been registered, the words ‘transfer Receipt No.....’ should be substituted for the word ‘Certificate.’ The address of the company should, for the convenience of stockbrokers and others. be included on the certification stamp. The record of certified transfers should be kept by indorsement on the back of the certificate or by means of a certification form that can be attached to the Certificates. The certificate should immediately be cancelled and the cancelled certificates, on which will be indorsed the record of certification, should be preserved. It will be found convenient, upon a transfer being presented for certification, to send notice to the transferor at once instead of waiting until the transfer is lodged for registration. This method has the advantage of giving the earliest possible notification to the holder of the shares, and effects a great saving of time and trouble both to the company and the transferor where there are many certifications against one certificate. A form of notice will be found in Appendix F (Form 18). It is the practice of provincial Stock Exchanges to certify transfers of shares as well as of stock. The Stock Exchange, London, has only certified transfers of stock hitherto; but is now undertaking by gradual stages the certification not only of stock quoted in the Official List as at present, but also of unquoted stock and of quoted and unquoted fully-paid shares. In all cases the certificate is lodged with the Stock Exchange and a form filled up giving the necessary particulars. This form is sent by the Stock Exchange with the corresponding certificate to the Company concerned by the same day's post. The practice of Stock Exchanges certifying transfers is increasing. and is a convenience to stock brokers. 7 & SECRETARIAL PRACTICE especially in the provinces, or, in the case of the London Stock Exchange, where the transfer office of the company is not in London or is at a distance from the Stockbroker’s office. On the other hand, obviously the Stock Exchange authorities are not in a position to detect even a gross and clumsy forgery of a share certificate if such should be presented to them, and, to that extent, it may be argued that the practice is not such a safe one from the public point of view, as when the Company’s own officials alone certify transfers. The legal effect of certification has been several times considered in the Courts, and the effect of some of the decisions is here summarised. By such words as ‘certificate lodged at the company’s office,” stamped upon a transfer of shares, no more is meant than that certain documents apparently in order, and showing primd facie that the transferor is entitled to the shares, have been deposited with the company. They do not amount to a warranty either of the transferor’s title or of the validity of the documents. In the absence of fraud, even if no certificate has in fact been lodged, the company is not liable for the careless representation that one has been deposited [Bishop v. Balkis Co. (1890), 25 Q.B. D. 512]. And where the secretary has fraudulently certified upon a transfer that certificates have been lodged at the company’s office, the company is not estopped from setting up the true facts if it has not authorised the fraud [George Whitechurch v. Cavanagh (1902), A.C. 117]. But certification by the proper officer of the company on a transfer of shares, which purports to be a transfer of fully paid shares, has been held to imply that certificates have been produced showing the ownership of fully paid shares, and to estop the company from denying that the shares are fully paid [re Concessions Trust, McKay's Case (1806), 2 Ch. 757]. Balance Receipt. If the certificate of shares lodged with the transfer for certification includes a larger number of shares than is included in the transfer, the secretary will issue to the seller or his broker a balance receipt. This will entitle the seller in due course to receive a certificate for the unsold balance of his shares. These balance receipts should be in a book with counterfoils or with forms for duplicating by means of carbon sheets. They should always be signed by a responsible official. A form is given in Appendix F (Form 17). The practice with regard to the preparation of certificates for the balance of shares varies in different offices. Some companies contend that to make out a balance certificate in respect of TRANSFER AND TRANSMISSION OF SHARES 73 the unsold portion of shares on all certificates lodged upon certification of transfers is a waste of time, and they therefore do not make out any certificate in respect of the balance unless and until a notice to this effect is received, such balances remaining on the cancelled certificate retained in the office pending delivery of further transfers or an application for a balance certificate. If this procedure is followed, no further transfers in respect of the unappropriated balances must be certified or accepted for registration, nor must any balance certificates be issued without the surrender of the balance receipt. There are many companies, however, who contend that a balance certificate should be made out in respect of every balance represented by unsold shares on certificates lodged with transfers for certification, as, in that way, it is easier to trace the whole of a particular shareholding should occasion arise, and, where this method is adopted, such a balance certificate is made out even when it is known that further transfers will be presented for certification or registration in respect of those particular shares. On the further transfer being presented, the balance certificate is immediately cancelled, even though it may not have been before the Board for sealing. Where the former practice is adopted, the balance receipt should contain an intimation to the effect that no definitive certificate will be made out in respect of the balance ‘unless a request for the same is made. Where the latter practice is followed, the balance receipt given should contain an intimation as to when the balance certificate will be ready for delivery. It will be seen from the foregoing that, notwithstanding the decisions of the Courts as to the legal effect of certification on transfers, the practice is one which requires to be carried out with the very greatest care. The clerk responsible for the work should be careful to see that the transferor’s name is correctly stated, that he has signed the transfer, that the name of the transferee is inserted, that no more shares are being transferred than are comprised in the certificate, that the distinctive numbers are correctly stated on the transfer, and that the company’s name is correctly stated, and, by reference to the register of members or card index, that no notice of distringas has been lodged. It occasionally happens that an old address, copied from the share certificate, is inserted in the transfer, and it is therefore necessary to refer to the register or card index to check the address of a transferor so that the notice to him (if such is sent on certification) may be sent to the correct address. In the cases where an outside audit of the transfers is conducted it is the usual Powers of Attorney. Registration of Transfers. 74 SECRETARIAL PRACTICE practice of auditors to enface the certificates with a small rubber stamp or some other distinctive mark, and the clerk responsible for the certification of the transfer should be careful to see that the certificate lodged with the transfer bears such mark, and is. therefore, prima facie genuine. As regards Powers of Attorney the general law is discussed in Chapter XXI, but the practice in connection with transfers may here be conveniently dealt with. The signature on a transfer, whether that of the transferor or the transferee, may be affixed by an attorney, or agent. In such cases it becomes the duty of the secretary to satisfy himself that the authority of the attorney is properly constituted. Where the transferor has executed the transfer by attorney, the matter should be dealt with upon presentation of the transfer for certification, but when the transfer is lodged for registration, reference should again be made to the records of powers of in order to make sure that no notice of revocation or death has been received since the transfer was certified. If the transferee has done so, it is upon lodgment of the transfer for registration that the matter will arise. If the power of attorney has already been lodged for registration at the company’s office, particulars of it will appear in the company’s register of powers of attorney, i.e. the date of registration, the names of the donor and donee of the power, and some particulars of its scope and duration. These can then be referred to, and unless there is any doubt as to whether the power is still in force, the transfer may be accepted. If the power is presented for the first time upon a transfer being lodged for certification or registration, it must be carefully inspected in order to see that it is under seal, that it is properly stamped, executed and attested, that it authorises the transaction sought to be effected, whether the sale or purchase of shares, and whether of the particular shares in question, and that it is still effective. If the power of attorney is executed by a corporation, it should be borne in mind that s. 74 (1) of the Law of Property Act, 1925, only operates in favour of a purchaser as defined by s. 205 of the Act, i.e. ‘a purchaser in good faith and for valuable consideration’ including a lessee, mortgagee or other person who for valuable consideration acquires an interest in property.’ On the execution of the transfer by the transferee, it is lodged with the company for registration. The depositing broker or agent should be asked to write or stamp his name and address on the back of the transfer, and the secretary should give a printed form of receipt to the effect that the TRANSFER AND TRANSMISSION OF SHARES 75 transfer has been lodged for registration subject to the approval of the board. Form of receipt to be used when the transfer is handed in over the counter, and when it is sent by post, will be found in Appendix F (Form 19). This form is, it will be observed, bound as a book with counterfoil. A rubber stamp should be used to stamp each transfer for the purpose of recording the various operations connected with it, and the records should be duly made from time to time until they are complete. A specimen Stamp is given in Form 20. Upon receipt of a transfer for registration, the signature of the transferor should be carefully compared with the record in the office and a notice should be sent to the transferor stating that the transfer has been lodged, and that, unless objection is received, it will be assumed to be in order. A Form of Notice is given in Appendix F (Form 18). This will be unnecessary where a notice was sent on certification. If the transferor is a corporate body, the notice should be sent to the corporation, or in accordance with its articles. In the case of joint holders, it should be sent to every holder. The registration of transfers is, subject to the articles, a matter for the board, for whose approval they must be submitted. But before the transfers are submitted to the board for approval they should be carefully scrutinised by the secretary or his responsible deputy with a view to seeing— That the transferor’s name, address, and description is in exact accord with the register; That the consideration money bears its proper relation to the fair and reasonable market value of the stock or shares transferred; That the transferee’s full name, address, and description 1s clearly entered therein; [f the capital of the company is divided into two or more classes of shares or stock, that the class of shares specified in the transfer is the same class as that comprised in the certificate. That the number of shares or amount of stock is written in correctly in words; That in the case of shares the distinctive numbers are clearly entered and agree with the numbers appearing on the certificate and with the number of shares to be transferred; That the name of the company is correctly given; Public Trustee. Attestation, 76 SECRETARIAL PRACTICE That the signature of the transferor not only agrees with the description entered at the head of the deed, but also, if possible, with his signature when previously accepting the shares; That it is properly witnessed and dated; [hat there is no notice in lieu of distringas, or other charge upon the stock or shares therein referred to, or anything which would otherwise invalidate the transfer; And, finally, that the deed is properly stamped. Unless the occupations of transferees are known, the annual summary cannot be fully made out. A transfer may be accepted, although material parts of it are typewritten. If the name of the transferee has been altered, or another name substituted, the transfer should be refused, unless it is accompanied by a satisfactory written explanation and statement that there has been no sub-sale, or a satisfactorv letter of indemnity. In the case of transfers to a corporate body, the secretary should require that the memorandum and articles be lodged to show that the corporate body is duly empowered to hold shares, and also to show how the seal is to be affixed. Transfers to a partnership firm as such should not be registered [Vagliano Anthracite Collieries (1910), W. N. 187]. The Public Trustee, if separate accounts are necessary, may be registered with a number, or a letter and number, e.g. ‘The Public Trustee, Account No. 3,” or ‘The Public Trustee 4; A 40.” Any introduction of a name, e.g. ‘The Public Trustee, re John Jones,” would appear to be contrary to the provisions of s. 101 of the Act, which forbids notice of any trust being entered on the register. If a transfer signed by the registered holder is presented after the death of the transferor and is in order in every detail, the transfer should be accepted for registration. But if probate or letters of administration have been registered or the company has otherwise received notice of his death, the secretary should give notice of the lodgment of the transfer to the personal representatives, and a reasonable time should be allowed for objection, if any, to be lodged. Naturally, if the shares have already been transferred to the executors or adminstrators in their personal capacity, the transfer should not be accepted. : As regards attestation, a transfer executed out of the United Kingdom should not be accepted if it is attested by anyone other than H.M. consul, a clergyman, justice of the peace, or notary public, unless the signature is guaranteed TRANSFER AND TRANSMISSION OF SHARES #7 by a bank or a firm of standing. When one of the parties to a transfer is illiterate or infirm, and has executed the deed by making his mark, the attestation should state that the document has been read over and explained to the party, and that it appeared to have been understood by him ‘see Appendix F, Form 21); in a case of the kind there should be two witnesses, one of whom should be a doctor, a justice of the peace, a clergyman, a solicitor, or some other person of standing. The wife or husband of a transferor or transferee should not be accepted as a witness. Neither should the attestation by one of the parties to the transfer to the signature of the other be allowed. The address and occupation of a witness should be specified. The description of a witness, ‘clerk,’ or ‘married woman,” may be accepted, although the correct form should be ‘clerk to , ‘wife of .” In the case of a divorced woman the correct description is ‘single woman.” If a witness has signed in the wrong place, it may be accepted if the intention is clear. The same witness may attest both signatures. A transferee who is also a transferor need sign only once. Surviving holders in a joint account need not be so described on transfers. When shares are being sold by executors in their capacity of executors they should be so described in the transfer. But if they have been registered in their personal capacity, a transfer should not be accepted if they. as transferors, are described as ‘executors of . . . deceased. More than one account (e.g. two or more sellers to the same buyer) should not be allowed on the same transfer form; nor is it desirable to accept transfers of more than one class of shares or stock on the same transfer form. As regards the proper stamps on transfers, these will be Stamps found in the Inland Revenue Circular, dated January 1927 (see Appendix A). It must be remembered that, by s. 17 of the Stamp Act, 1891, ‘if any person whose office it is to enrol, register, or enter in or upon any rolls, books, or records, any instrument chargeable with duty, enrols, registers, or enters any such instrument not being duly stamped, he shall incur a fine of ten pounds.” This makes it incumbent upon the secretary to satisfy himself that transfers are properly stamped. If the consideration accords with the market price, and the stamp with both, there is no difficulty. If the stamp accords with the consideration, but the consideration is less than the market value, but near it, the secretary cannot be expected to do anything further. If the difference is considerable the transfer should be refused 78 SECRETARIAL PRACTICE in the absence of a satisfactory explanation and the adjudication mark of the Revenue Stamp office should be required under section 12 of the Stamp Act. With regard to transfers for nominal consideration, the [nland Revenue Circular, dated January 1927, should be followed (see Appendix A, p. 385). [t has been held that directors may refuse to register a transfer not duly stamped, and in determining whether it is duly stamped they may go behind that which appears on the face of the document [Maynard v. Consolidated Kent Collieries (1903), 2 K.B. 121]. Cancellation Certificates attached to transfers lodged for registration, _—_ as in the case of certificates in respect of transfers left for * certification, should be cancelled immediately they are delivered to the company, so as to prevent any chance of their being subsequently made use of for an improper purpose. The deed of transfer lodged for registration having been found in order, and being accompanied by a certificate, or bearing on its face the company’s certification, is stamped with the date of lodgment, given its consecutive number, and entered in the Register of Transfers where this book is kept (Form 22). Where directors are given a discretion as to registering transfers, they must not exercise that discretion capriciously. The Court, in the absence of evidence to the contrary, will presume that the directors have done right [re Coalport China Co. (1895), 2 Ch. 404], and the onus of proof is on those who say the directors have not acted bond fide [ex parte Penney (1873), 8 Ch. App. 446]. If they have bond fide considered the matter, the directors need not give their reasons for refusing to register a transfer, but if they do give reasons the Court will inquire into the sufficiency of such reasons [re Bell Brothers, ex parte Hodgson (1892), 65 L.T. 245]. In this connection it must be remembered that a power to directors to refuse to register transfers of shares if ‘in their opinion it is contrary to the interests of the company that the proposed transferee should be a member thereof’ only justifies a refusal on grounds personal to the proposed transferee. re Bede Steam Shipping Co. (1917) 1 Ch. 123.] If registration is refused notice must be given to the transferee within two months of the lodgment of the transfer (s. 66). A person in whose favour shares are renounced is not a transferee, so that directors with power to refuse to register transfers are not thereby entitled to refuse Withholding Registration. TRANSFER AND TRANSMISSION OF SHARES 79 to register such a person as the holder of the shares [Pool Shipping Co. (1920), 1 Ch. 251]. It therefore appears that to entitle directors to refuse to register such persons, there must be special provision in a company’s articles. Before the closing of the transfer books for dividend purposes, care should be taken that every transfer lodged for registration be passed and registered. Whilst the books are closed, the certification of transfers should proceed as usual, and transfers presented for registration should be accepted and carefully preserved, and there seems no objection to the usual notice as to lodgment of transfer being immediately sent to the transferor; but apart from this the secretary will not deal with any transfers lodged for registration until the books are once more open. The procedure usually followed by the transfer committee or board in checking the transfers and issuing certificates where there is no transfer audit is as follows: — The secretary, having satisfied himself that all the transfers procedure and certificates have been properly and regularly put through of Transter the books, and are in order, reads them over to one of the Committee. directors for comparison with the new certificates, while at the same time another director or one of the clerks sees that the names of the transferor and transferee, the number of shares or amount of stock transferred, and the number of the new certificates issued, with distinctive numbers in the case of shares, agree with the particulars as read out by the secretary and as entered on the certificate, and that a certificate corresponding thereto has been cancelled. The new certificates are then dated, signed, and sealed, and checked with the entry in the seal book and agenda. They are then ready for issue in exchange for transfer receipts, &c. As soon as the directors have passed the transfers they should be posted into the Share Register. As the deeds represent the titles of the transferees they must be kept in a place of absolute safety. and retained by the company in perpetuity. In the event of a duplicate certificate having been issued in exchange for an indemnity in respect of a lost, mislaid, or destroyed original certificate, it will be necessary to see that the duplicate certificate is the one lodged with the transfer and not the original; and should the latter be lodged, to communicate with the transferor to ascertain the reason why he is dealing with the original and not the duplicate. Should a certified transfer be lost, the company should, hefore certifving a duplicate transfer, reauire an indemnity Certificates. Notice in lieu of Distringas. Ro SECRETARIAL PRACTICE from the transferor. This should, in general be accompanied by a statutory declaration verifying the loss, and a guarantee by a bank or firm of standing, unless the number of shares proposed to be transferred is small. A suitable form of declaration and indemnity will be found in Appendix F (Form 32). Should a transfer receipt or Balance Receipt be lost, an indemnity similarly guaranteed should be asked for. Great care should be exercised in the preparation of the certificates to see that the number of shares or amount of stock (and in the case of the former, the distinctive numbers) are correctly stated. The address of the holder should be inserted, but not the description, with the exception of courtesy designations, e.g. ‘Reverend,’ ‘Mrs.,” ‘Miss,’ &c. In joint accounts it is usual to give the address of the firstnamed holder only, unless otherwise provided for in the articles of association; but there is generally a clause in the articles to the effect that in the case of joint accounts all notices will be addressed to the first-named holder, so that the addresses of the second, third, or other holders in joint accounts are, excepting for purposes of identification, not required to be set out in the Index to Share Register, although it is essential that they should always be fully detailed in the register itself in order to comply with s. 95 of the Act. By s. 67 of the Act, companies are required to complete and have ready for delivery the certificates of all shares, the debentures, and the certificates of all debenture stock transferred, within two months after the transfers are lodged for registration, unless the conditions of issue otherwise provide. Under the Act of 1908, the period of two months ran from the date of actual registration, not from the date of lodgment for registration. A failure to comply with this provision exposes the officers of the company to pecuniary penalties and the Court may limit a time for making good the default s. 67 (2) (3)]. The registration of transfers may be prevented by any person interested giving to the company a notice, in the prescribed form, requiring it to refrain from registering them, accompanied by an affidavit describing the nature of his interest. Payment of dividends may be restrained likewise by the same procedure. This procedure is in accordance with the Rules of the Supreme Court (see Order 46, R. 4), and its effect is to prevent the company from registering a transfer without giving the person claiming to be interested an opportunity of applying to the Court to restrain the transfer. Upon the transfer being presented for registration, the company must notify the person who has given the notice, and unless TRANSFER AND TRANSMISSION OF SHARES 81 that person then proceeds to obtain within eight days an order of the Court restraining the transfer, the company may proceed to register the transfer in spite of the notice. Forms of notice by the company to the person on whose behalf the notice and affidavit were lodged, and to the person actually lodging them, will be found in Appendix F (Forms 23 and 24). One or two other matters connected with transfers remain Legal Effect to be noticed. The legal effect of a transfer, duly completed of Transfers. by registration, is important. A transferee does not get a full title until the transfer is registered [Société Générale v. Walker (1886), 11 A.C. 20]. The entry of the name of a transferee on the register by a secretary, without authority, before the directors have approved the transfer, gives ‘the transferee no title, and the transferor still remains liable on the shares [Chida Mines v. Anderson (1905), 22 T.L.R. 27]. Till registration the transferee has only an equitable right, which he may lose by the appearance of some person with a superior equity, or by the registration of a later transfer [Moore v. N.W. Bank (1891), 2 Ch. 599; Ireland v. Hart (1902), 1 Ch. 522]. Meanwhile the transferor remains liable to pay calls, but there is an implied contract by the transferee to indemnify him [Loring v. Davis (1886), 32 Ch. D. 625], and, subject to the articles of association, the transferor can enforce the registration. If a shareholder neglects to have the name of the transferee substituted for his own upon the register of shareholders and a winding-up supervenes, his name must remain there, and he is therefore liable to pay up the amount due upon his shares [Walker's Case (1868), 6 Eq. 30], although he would be entitled to indemnity by the transferee. The transferor after registration is not primarily liable as a contributory [Hoylake Railway Co. (1874), 9 Ch. App. 257], but remains liable for one year to be placed on the ‘B’ List of contributories (see ss. 175 and 203 of the Act). But even after registration the transferor will be liable to be restored to the register if the transfer was fraudulent, or made without the authority of the transferee, or to a nominee of the company to the knowledge of the transferor; but in the case last mentioned the transferee may be liable [Cree v. Somervail (1879), 4 A.C. 648]. If the articles provide that a member shall not be entitled to vote whilst any call or other sum is due and payable to the company in respect of any of the shares of such member, it has been held that, although the calls can be recovered from the original holder, even after forfeiture, the person, to whom the shares have been re-sold by the company, takes subject to such disqualification notwithstanding that Blank Transfers. 32 ~~ SECRETARIAL PRACTICE he acquired the shares upon the terms that he should be discharged from all calls due prior to his acquisition of the shares [Randt Gold Mining Co. v. Wainwright (1901), 1 Ch. 184]. The company is not bound to register a transfer at once, but is allowed time for inquiry; if, however, registration is improperly refused, the company will be liable in damages ‘Ottos Kopje Diamond Mines (1893), 1 Ch. 618]. The only duty of the transferor of shares is to execute a valid transfer and hand it to the transferee; it is for the transferee to insist on his right to registration [Skinner v. City of London Insurance Corporation (1885), 14 Q.B.D. 882]. But the transferor is under an implied obligation, arising from the relation of grantor and grantee, not to prevent or delay the registration [Hooper v. Herts (1906), 1 Ch. 549]. See also 5. 65. The effect of blank transfers, i.e. transfers in which the name of the transferee is omitted, should be noticed. Blank transfers are usually given in cases where the transferor is desirous of raising money on the shares; and here there is a difference in the legal position according as the regulations of the company do or do not require a transfer to be made by deed. 1. Where the regulations do not require a transfer by deed. A form of transfer signed by a vendor of shares, but with the name of the transferee omitted, is equivalent, when delivered to a purchaser, to an authority to him to fill in the blank with any name he likes [Walker v. Bartlett (1856), 18 C.B. 845], and the vendor is entitled to be indemnified by the purchaser against all calls thereafter made, Spencer v. Ashworth, Partington & Co. (1925), 1 K.B. 589]. And when the name is filled in, the transferee is entitled to be registered as holder of the shares [Tahiti Cotton Co., ex parte Sargent (1874), 17 Eq. 273]. 2. Where the regulations require a transfer by deed. The name of the transferee must be inserted before the deed is executed [Tayler v. Great Indian Peninsula Railway Co. '1859), 4 De G. and J. 559]; otherwise the document is inoperative as a deed [Hibblewhite v. McMorine (1840), 6 M. & W. 200], and gives the purchaser no right to call upon the company to place his name upon the register. The purchaser however, has, in consequence of the contract of sale, an equitable title to the shares, and he can force the vendor to aid him to acquire a legal title by executing a proper transfer [Morris v. Cannan (1862), 31 L.]J.Ch. 425]. TRANSFER AND TRANSMISSION OF SHARES 83 If a mortgagee of shares, holding a transfer in blank, purports to sell them, and hands over to his purchaser the transfer still in blank, the fact that it is in blank affects the purchaser with notice, and he gets no better interest than his vendor (the mortgagee) had [France v. Clarke (1884), 26 Ch. D. 257]. But if the mortgagee himself fills in the transfer, his transferee, provided he be a bond fide purchaser for value without notice, will get a complete title to the shares [Easton v. London Joint Stock Bank (1887), 34 Ch. D. 95]. A forged transfer gives no rights to the shares to the alleged transferee [Barton v. London & North-Western Railway (1889), 24 Q.B.D. 77]; but where a company acting on a forged transfer has issued a certificate in the name of the transferee and this has been passed on to a bond fide holder for value, the company is estopped by its certificate from denying that the person named in such certificate is the proprietor of the shares, and he is entitled to damages against it [Balkis Co. v. Tomkinson (1893), A.C. 396]. The Court will order the Company to rectify its register where it has acted on a forged transfer [re Bahia Railway (1868), L.R. 3 Q.B. 584]. By the Forged Transfers Acts, 1891 and 1892 (54 & 55 Vict. c. 43; 55 & 56 Vict. c. 36), companies may make compensation for losses arising from forged transfers, or transfers under forged powers of attorney. Whether or not a company by its articles adopts the Acts, or whether or not by resolution it does so, none the less the Acts apply; and even although the Acts have been adopted by the articles, or by resolution, there is not the least obligation on the company to make any compensation whatever. The compensation is payable out of the company’s funds, and the company may, if it pleases, establish a compensation fund by charging a fee on transfers, not exceeding one shilling per £100 transferred, or by insurance, or reservation of capital, or accumulation of income, or in any other manner. The object of the Acts is to enable a company to benefit a purchaser who finds himself deprived of his shares owing to the registration of a forged transfer, or a transfer under a forged power of attorney. If a company pays compensation under the Acts, the rights of the person compensated against the person who has caused the loss are transferred to the company. To provide for the cases of the death, bankruptcy, or insolvency of a member, a transmission clause is almost invariably inserted in the articles. It must be remembered that transfer and transmission are two distinct things. Transmission occurs on death, bankruptcy, &c., when the power of transfer no loneer exists. and secures that there shall Forged Transfers. Transmission R84 SECRETARIAL PRACTICE be someone entitled to the shares held by the deceased, bankrupt, &c.—at any rate, in a representative capacity. The object of the transmission clause is that the representative capacity shall be changed into a responsible capacity, as between the holder and the company, whatever may be the rights as between the holder and the beneficiary. In the case of companies under the Companies Acts, the circumstances in which persons entitled to shares in a representative capacity (e.g. executors) are entitled to be registered depends upon the articles of a company. One or two representative specimens of articles dealing with the subject may be taken as illustrations. Articles usually provide that the executors or administrators of a deceased sole holder of a share shall be the only persons recognised by the company as having any title to the share. The object of this clause is that the company shall not be concerned to go into questions as to who is, or is not, beneficially entitled. The company is to look to the legal personal representatives and to them alone. Table A provides that ‘any person becoming entitled to a share in consequence of the death or bankruptcy of a member shall, upon such evidence being produced as may from time to time be properly required by the directors, have the right, either to be registered as a member in respect of the share, or, instead of being registered himself, to make such transfer of the share as the deceased or bankrupt person could have made; but the directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the share by the deceased or bankrupt person before the death or bankruptcy.” Another very common form is that ‘any person becoming entitled, &c., upon producing such evidence that he sustains the character in respect of which he proposes to act under this clause, or of his title, as the directors think sufficient, may, with the consent of the directors (which they shall not be under any obligation to give,) be registered as a member in respect of such shares, or may, subject to the regulations as to transfer, transfer such shares.” The effect of the existing Table A is to entitle any such person, upon production of such evidence as the company may properly require, to be registered as a member, or to elect to have a nominee registered as a transferee, after executing a transfer to the nominee. There is no very substantial variation between any of the above provisions, and the general result is that executors may, but need not, be registered as members. When a member dies, his estate remains liable to the company. His name is on the register. In due course, probate TRANSFER AND TRANSMISSION OF SHARES 8; or letters of administration or confirmation as executor are produced to the company as evidence of the representative capacity of the executors or administrators; and s. 6g of the Act provides that ‘the production to a company of any document which is by law sufficient evidence of probate of the will, or letters of administration of the estate, or confirmation as executor, of a deceased person having been granted to some person shall be accepted by the company, notwithstanding anything in its articles, as sufficient evidence of the grant.” If nothing more is done, the proper course is to make a note in the register of the death and production of the probate with the full names and addresses of the executors; but it is not the proper course, in the circumstances, to enter the representatives in the register as holders of the shares. S. 64 of the Act makes this clear: ‘A transfer of the share or other interest of a deceased member of a company, made by his personal representative, shall, although the personal representative is not himself a member of the company, be as valid as if he had been such a member at the time of the execution of the instrument of transfer.’ So that executors may, by statute, transfer without being first registered as members; and if they do so, the transferee will in due course be registered in the ordinary way. Pending a transfer, the estate of the deceased member remains liable to the company and his representative is not entitled to notice of meetings [Allen v. Gold Reefs of West Africa (1900), 1 Ch. 656], unless the articles provide that such representative is to receive notices of meetings. Article 107 of Table A is an instance of such a provision. In the case of the death of a sole executor who has not been registered, the production of probate of his will by his executor entitles that executor to deal with the shares of the deceased shareholder. But the administrator of a deceased executor must not be recognised. The person entitled to deal with the unadministered estate of the deceased shareholder (who will generally be the residuary legatee or one of the next of kin) must take out letters of administration de bonis non and the secretary can then recognise that person. Similarly neither the executor of an administrator nor tl: administrator of an administrator can be recognised. Colonial probates or letters of administration must be Colonial resealed in this country before the personal representative Probates, ete. can be recognised. Similarly Scottish and Irish probates and letters of administration must be resealed in England, English or Irish in Scotland, and English or Scottish in Ireland R6 SECRETARIAL PRACTICE The resealing of Scottish and Irish grants is effected at the Principal Probate Registry, Somerset House, London. W.C., and the following fees are payable: — ScorTisH CONFIRMATION. £ s. d. Receipt ~~ .. “se .. .. .. .. 0 I oO Collating copy confirmation up to 10 folios of go words .. :s ‘sn “o .. 0 2 6 Collating copy confirmation above 10 folios, per folio .. ‘ us ‘e “e .. 0 0 3 Search fee per full year or part of year since December . .. #5 uw .. 0 0 6b Sealing fee .. .. .. .. ow .. I T © Filing copy confirmation .. .- .. .. 0 2 6 IrR1SH GRANT. £ s. d. Receipt os “ .. .. .. <.. 0 I O Collating copy, probate or administration, up to 10 folios of go words .. va va .. 0 2 6 Above 10 folios = _- - .. 0 0 3 Search fee, per full year or part of year since death .. .. .. 0 0 6 Fiat .. .. .. .. .. .. .. 0 5 © Sealing fee effects in England—according to value —-Filing copy probate or copy administration .. o 2 6 Filing Inland Revenue certificate as to duty .. o 2 6 Filing certificate as to bond (administration) o 2 6 -. a English or Irish probates and letters of administration for re-sealing in Scotland should have upon them a note of the domicile of the deceased certified by the Registrar and be sent to H.M. Commissary Office, Parliament Square, Edinburgh. The fee payable is 2s. 64. if the gross value of the real and personal estate in the United Kingdom does not exceed £500, and 10s. if it exceeds that sum. English or Scottish probates and letters of administration to be resealed in Ireland should be sent (4) to the district registry at Londonderry in respect of the counties of Londonderry, Tyrone and Fermanagh, and the county borough of Londonderry; (b) to the principal registry in Dublin in respect of the counties of Donegal, Monaghan and Louth; (¢) to the principal registry in Belfast in respect of so much of Northern Ireland as is not included in the district of the district registry at Londonderry; (d) to the Chief Probate Registry, Four Courts, Dublin, in respect of other areas [London Gazelle, February 3, 1922 as to (a), (b) and (c) above]. The note TRANSFER AND TRANSMISSION OF SHARES 87 as to domicile is not required. The fees payable are as follows, in the case of probate, letters of administration. or letters of administration with the will annexed: — Effects in Ireland sworn under £20 £50 ys £100 ) ,, atorover £100 .. } Also: Search per year, or part of year (excluding current year) “ Filing notice of application Receipt for grant ue Registrar’s fiat “i .. i. Filing copy will and/or grant .. , Comparing copy with grant, 3d. per folic of go words with a minimum charge o. Stamp Office certificate .. .. . Certificate of bond (if anv) .. .. .. 1. J ’ As regards deceased foreign shareholders, it is necessary for a grant to be taken out in England by an attorney appointed for the purpose by the person entitled. The latter need not necessarily be the administrator in a foreign country, but as a rule the Court will follow the foreign grant. (See Williams on ‘Executors, 11th ed. p. 273.) This procedure of obtaining a fresh grant is in simple cases often followed also in the case of colonial probates, as it is in such cases slightly less expensive than the process of resealing, and mav be found more expeditious. Upon production of probate, without more, a company should not enter the names of the executors upon the register as the holders of the shares. So long ago as 1879, in Buchan'’s Case (4 A.C. 549), in the House of Lords, the then Lord Chancellor, Lord Cairns, laid it down that the names of executors should not be entered on the register without ‘a distinct and intelligent request’ on the part of the executors. But when the regulations, as they commonly do, provide for the executors being entitled to require the company to register them, it is then the duty of the company, upon a request, to enter their names, unaccompanied by any mention of their representative capacity (I. H. Saunders & Co. (1908), 1 Ch. 415]. If this be done, the executors become personally liable on the shares, and the company has nothing to do with the deceased or his estate. Hence the frequent provision in articles that directors shall not be obliged to consent to the 1In the case of letters of administration onlv. Foreign Probates. Letter of Request. Evidence of Death. Company Executor. ]8 SECRETARIAL PRACTICE registration of executors; they may not desire, where the shares are not fully paid, to accept the liability of the executors, who may be men of straw, in lieu of the liability of the estate of the deceased, and may prefer to await a substantial transferee. When an executor is, upon a proper request, entered on the register, a fresh certificate should be issued, and the request should be recorded as a transfer. Where an executor or administrator is also beneficially entitled to shares he can, upon a proper request, be placed on the register without any transfer being executed. A form of request by executors, or administrators, to be placed on the register, will be found in Appendix F ‘Form 25). As regards the evidence which should be demanded on death, in the case of the death of a holder in sole account, the production of probate or letters of administration or confirmation as executor should be required; whilst in the case of the death of one holder in joint account, a certificate of death is usually sufficient. A Form of Certificate of Identity, where one is required, will also be found (Form 26). Under s. 69, any document which is by law sufficient evidence of probate or letters of administration or confirmation as executor must be accepted by the company as sufficient evidence of the grant. Upon the death of a holder in joint account, the shares vest, by right of survivorship, in the survivor or survivors. A company is sometimes appointed executor. In such a case, unless it is a trust corporation, it must appoint under its seal a representative, called a syndic, to whom letters of administration with the will annexed will be granted, and these will be produced to the company in which the deceased held shares. In the case of a company being appointed coexecutor with individuals, no grant can be made to the syndic unless the individuals have renounced probate, since probate and letters of administration cannot be granted in respect of the same estate. If, however, the company is a trust corporation as defined by the Supreme Court of Judicature (Consolidation) Act, 1925 (s. 175) probate will be granted that company in its corporate name pursuant to s. 161 of that Act. In cases where executors are to be noted in the register in their representative capacity, probate should be exhibited, and the register of probates should give the names and addresses of the executors. The common practice of making a note in the register of members that probate has been exhibited, and giving the names of the executors, to TRANSFER AND TRANSMISSION OF SHARES 8g whom the probate has been granted, is to be recommended. The same applies to administrators. In the event of the sale by the executors of part of the holding—they being entitled to sell the holding under s. 64 of the Act—the balance certificates should be made out in the name of the deceased, the names of the executors being given in the margin of the certificate. Where executors have been noted in their representative capacity, dividend warrants should be made out to (say) ‘John Brown one of the executors of A. Smith, deceased.” John Brown would indorse the warrant. If sent to a bank the warrant would be payable to (say) ‘Coutts & Co. A/c A. Smith, deceased’ (or as per instructions). It is usually desirable, whenever possible, to compel the registration in their personal capacity of persons claiming by transmission. The best method of so doing is to withhold. dividends, but this can only be done when the articles authorise it. An article in some such form as follows will serve the purpose: If within a year and day from the death of a shareholder his executors or administrators have not [themselves been registered as the holders of his shares, or have not] transferred his shares, the directors may withhold payment of all dividends that may be payable in respect of such shares until such time as the executors or administrators shall [themselves have been so registered, or shall] have transferred the shares, when the said dividends shall be payable to the [executors or administrators, or the] trans feree of the shares [as the case may be]. In the case of the devolution of title to shares on the Bankruptcy. bankruptcy of a shareholder, the trustee in bankruptcy is the representative of the bankrupt, and the company should require as evidence either an office copy of his appointment or a copy of the Gazette containing notice thereof. If the shares are partly paid, the trustee may exercise the right of disclaimer conferred by s. 54 of the Bankruptcy Act 1914; but if the shares were charged, the disclaimer does net destroy the interest of the person entitled to the charge he Lansdell (1921), 1 Ch. 420]. In the case of lunacy, the property of the lunatic can enly Lunacy. be dealt with under an order of the Court, and this or ‘r, or an office copy of it, should be produced to the c_-and a careful note made of the powers confer;ed curator. If a company holding shares in another company goes into Liquidation. liquidation, the latter companv should require evidence of the 90 SECRETARIAL PRACTICE Registration Fees. appointment of the liquidator. In compulsory liquidation, a copy of the Gazeite containing notice of the appointment of the liquidator is sufficient. In all the above cases the change of title should be noted in the register of members. Registers should be kept of proofs of death, marriage, and other changes of title. It is usual for companies to charge fees for the registration of various documents, and the issue of certificates in certain cases. But none of these fees is properly chargeable, unless authorised by the articles of association. “Opportunity should be taken to alter the articles of association, where necessary, in order to justify the charges. The following fees are those usually charged: — s. d. Fo registration of transfer .. .. .. 2 6 ‘some companies charge 5s.) probate .. - .. .. 2 6 proof of death in joint holdings 2: 6 request , by executors to be placed on register .. .. 2 6 proof of marriage . .. 2 6 power of attorney ‘s .. 2 6 change of name by deed-poll, or otherwise .. .. 2 6 lunacy orders .. .. .. 2 6 appointment of trustee in bankruptcy, &c.. .. .. 2 6 each For issue of duplicate certificates .. . .. I © . ,» split certificates .. .. I 0 No fee should be charged for registration of change of address, or for the issue of balance certificates, although in this latter case a fee of 1s. is sometimes charged. CHAPTER IX DTHER MATTERS RELATING TO SHARES WE have dealt in Chapter V with the nature of shares, with share-certificates and membership, in Chapter VI with application and allotment, and in Chapter VIII with transfer and transmission. There are various other matters directly connected with shares, with which it is proposed to deal in this chapter. Assuming that a shareholder has paid the application and allotment money due upon his shares, and that, as is generally the case, the shares are not then fully paid, the matter of the machinery for securing the due pavment of the balance requires attention. By the terms of the contract, i.e. the conditions of allotment, the unpaid balance may be payable at fixed dates Thus, if 2s. 6d. for a £1 share is paid on application, and 2s. 64 on allotment, the balance may be made payable by instalments as follows: 5s. on June 1st, 5s. on July 1st, and 5s. on October 1st. Or the unpaid balance may be payable by certain instalments at not less than certain fixed intervals. Thus, by the conditions of allotment, the balance of (say) 15s., due after the allotment money is paid, may be payable by three instalments of 5s. each at intervals of not less than (say) two months. Or again, there may be no conditions as to the payment of the balance, in which case one or more calls will be made as and when the money may be required. Where the balance is by the terms of allotment payable at fixed dates, it is the duty of the shareholder to pay each instalment on the date fixed without a demand being made for it. It is, however, customary for a reminder to be sent. In the other cases mentioned, the directors (if, as is usual, the power is vested in them) will resolve that the next instalment of a fixed sum be called up, or that a call be made of Calls whatever amount is required, as the case may be. As to the liability of infants, see the notes at the .il this Chapter. A form of Resolution to make a call will be found in Chapter XIV. and a form of Call Letter in Appendix F (Form 27). a ~ 9 % - SECRETARIAL PRACTICE Power to make calls may be vested in the company in general meeting, but, as stated above, it is more frequently vested in the directors (see e.g. Table A, cl. 11). Since the regulations of the company are the terms of the contract whereby a shareholder has agreed to take his shares, all the requirements of the regulations must be strictly observed in making a call; otherwise the call may be invalid. For instance, if a call be made by directors, the board meeting must be duly convened, and the directors must be properly appointed [Garden Gully Co. v. McLister (1875), I A.C. 39]. The prescribed quorum must be present [re Alma Spinning Co., Bottomley’s Case (1881), 16 Ch. D. 681]. But a call made by less than a quorum, and afterwards confirmed when a quorum was present, has been held good "Phosphate of Lime Co., Austin’s Case (1871), 24 L.T. 932]. Power to make calls is in the nature of a trust, and must be exercised by the directors for the good of the company (Gilbert’s Case (1870), 5 Ch. App. 559]. Directors may not protect their own shares from a call and let the whole burden fall upon the other shareholders [Alexander v. Automatic Telephone Co. (1900), 2 Ch. 56]. But a company may, if authorised by its articles, make arrangements on an issue of shares for a difference between the shareholders in the amount and times of payment of calls (s- 48). Prima facie, however, there is an implied equality between shareholders of the same class, and it is wrong to make a call on some members only of a class [Galloway v. Hallé Concerts (1915), 2 Ch. 233]. The amount of the call and the time for payment must be fixed by the resolution [re Cawley & Co. (1889), 42 Ch. D. 209]. A call is made when the resolution is passed, not when notice is given to the shareholder [R. v. Londonderry Rly. Co. (1849), 13 Q.B. 998], and the articles generally contain a provision to that effect. A call is owing from the day on which it is made, although it is payable on a subsequent day China Steamship Co. (1869), 38 L.J. Ch. 512]. A call is in the nature of a specialty debt, and recoverable at any time within twenty years [Cork and Bandon Railway v. Goode (1853), 13 C.B. 827; s. 20]. A company may prove in the administration of the estate of a deceased shareholder, whose estate is insolvent, for the estimated value of the liability to future calls in respect of the shares standing in his name [Fuller v. McMahon (1900), 1 Ch. 173]. Where the articles so provide (e.g. Table A, cl .13), a shareholder will be liable for interest on overdue calls. OTHER MATTERS RELATING TO SHARES 93 Where Table A, cl. 16, applies, or similar provision is made in special articles, calls may be paid in advance, and the company may pay interest on moneys so prepaid, even though it is earning no profits, and the payment has to be made out of capital [Lock v. Queensland Mortgage Co. (1896), A.C. 461]. But money paid in advance of calls is capital paid up, and not an ordinary loan, so that it cannot be repaid except on a legal reduction of capital [London & Northern Steamship v. Farmer (1914), 111 L.T. 204]. The power to accept from a member the whole or any part of the amount remaining unpaid on any shares held by him, although no part of that amount has been called up, is conferred by s. 48 of the Act upon companies which are so authorised by their articles Hence the above-mentioned provision in many articles. Under the articles of association of most companies a lien is Lien. given to the company on the shares (or more generally upon the shares not fully paid) of the members in respect of any debts for the time being due from them to the company, e.g. in the case of partly paid shares, for calls. If the original articles do not so provide they may be altered by special resolution, or if under the original articles the lien only applies to partly paid shares, it may be extended by special resolution to fully paid shares [Allen v. Gold Reefs of West Africa (1900), 1 Ch. 656]. If such a lien exists no transfer of the shares belonging to a member who is indebted to the company should be sanctioned by the directors until the debt 1s discharged. The Committee of the Stock Exchange, however, require the articles to provide that fully paid shares shall not be subject to a lien. The articles of most companies authorise the forfeiture of Forfeiture. shares in the event of failure on the part of a member to pay any call or instalment on or before the day appointed for the payment thereof (see e.g. Table A, cl. 23-29). The provisions of the articles as to forfeiture must be very carefully studied and scrupulously observed, for the right of forfeiture is very strictly construed by the Courts, and any irregularity in or deviation from the powers given to the directors by the articles will render the forfeiture bad. Where the articles give no power of forfeiture, the sanction of the Court must be obtained to make it valid [Clarke v. Hart (1858), ., li.L.C. 633]. A power to forfeit for non-payment of debts generally as distinct from calls or instalments is invalid, as the exercise of such a power would amount to an illegal reduction of capital [Hopkinson v. Mortimer Harley & Co. (1917), 1 Ch. 6761. SECRETARIAL PRACTICE A power of forfeiture must not be exercised in the interests of a shareholder to enable him to escape liability, but in the interests of the company [Spackman v. Evans (1868), L.R. 3 H.L. 171]. Notwithstanding forfeiture a shareholder is liable to pay all calls owing at the time of the forfeiture, with interest, if the regulations so provide [Stocken’s Case (1868), 3 Ch. App. 412]. And where shares have been forfeited for non-payment of calls and re-sold, then (though Table A of 1862, cl. 22, applies) fresh calls may be made on the purchaser for the unpaid amount [New Balkis Eersteling v. Randt Gold Mining Co. 1904), A.C. 165]. But he is entitled, in the absence of agreement to the contrary, to be credited with sums paid by the original holder since forfeiture [re Randt Gold Mining Co. (1904), 2 Ch. 468]. It has been held that where by the articles of association a member is not entitled to vote when calls are due from him, and is liable to pay the calls even after forfeiture, the purchaser of shares forfeited for non-payment of calls is not entitled to vote so long as the calls are unpaid by the original holder [Randt Gold Mining Co. v. Wainwright (1901), T Ch. 184]. The articles generally contain a power for the directors to annul a forfeiture. But such a power cannot be exercised adversely to the former shareholder, so as to make him liable for calls made subsequently [re Exchange Trust, Larkworthy’s Case (1903), 1 Ch. 711]. A Form of Resolution of the board to forfeit shares will be found in Chapter XIV. A bond fide forfeiture made in accordance with the regulations of the company will not be disturbed by the Courts (Sparks. v. Liverpool Waterworks Co. (1807), 13 Ves. 428]. A shareholder may bring an action to set the forfeiture aside if he desires to test its validity [Sweney v. Swath (1869), 7 Eq. 324]. A slight irregularity, e.g. claiming interest from date of call instead of date of payment, is sufficient for the Court to annul a forfeiture [Johnson v. Lyttle’s Iron Agency (1877), 5 Ch. D. 687]. Forfeiture will be restrained pending the trial of an action for rescission upon proper terms. In Jones v. Pacaya Rubber Co. (1911), 1 K.B. 455 and Lamb v. Sambas Rubber Co. (1908), 1 Ch. 845, the injunction was granted subject to payment into Court of the amount due on the shares. In these cases, however, the shareholder consented to make such payment and in the former case, Buckley L]J., expressly reserved the question whether if he had been unwilling to do so, the injunction would have been refused. In Radium Springs v. How [(1929), not yet reported], the OTHER MATTERS RELATING TO SHARES o5 Court of Appeal granted an injunction subject to payment into Court of £500, the amount due on the shares being £3,850. Closely akin to the subject of forfeiture is that of the surrender of shares. The law upon this subject was for some considerable time thought to have been authoritatively settled by the Court of Appeal and to be as summarised in the following extract: ‘Every surrender of shares, whether fully paid up or not, involves a reduction of capital, which is unlawful, except when sanctioned by the Court under the Companies Acts of 1867 and 1877. Forfeiture is a statutory exception, and is the only exception. For I regard a surrender, under circumstances which would justify a forfeiture, as merely equivalent to a forteiture’ [per Cozens-Hardy,.L]., in Bellerby v. Rowland and Marwood Steamship Co. (1902) 2 Ch. 14, at p. 32]. A surrender of shares already liable to forteiture had been held to be valid [Trevor v. Whitworth (1887), 12 A.C. 409]; and since a company could not prior to 1st November, 1929, in any circumstances issue its shares at a discount [Ooregum Gold Co. v. Roper (1892), A.C. 125], the principle was involved that a company could not by any device relieve a shareholder from the liability to pay the full amount due on his shares [Bellerby v. Rowland & Marwood Steamship Co. (above)]. But it has been held by Warrington, J., that, where a company has power by its articles to accept a surrender of old shares in exchange for new, fully paid shares may be validly surrendered, and new shares of the same nominal value issued as fully paid to the holder in exchange [Rowell v. John Rowell & Sons (1912), 2 Ch. 609; in which case the surrendered shares were not cancelled, but were subject ° be re-issued by the company]. The important subject of the payment of commissions on the issue of shares is dealt with in s. 43 of the Act, to which reference may be made. The interpretation of the section is in some respects difficult, but it is believed that the following is a correct summary of the present law as to the payment of underwriting commissions, both by the company and by vendors and promotors: I. By the Company.— (1) Where there is a public issue. The following conditions must be complied with: (a) The articles either as originally framed, or as altered by special resolution must authorise payment of the commission sR Surrender. Underwriting Nfommissions. J SECRETARIAL PRACTICE (0) Under the Act of 1908 there was no limit to the rate of commission; but now the commission must not exceed ten per cent. of the price at which the shares are issued or the amount or rate authorised by the articles, whichever is the less. The amount or rate must be disclosed in the prosspectus. The number of shares which persons have agreed for a commission to subscribe absolutely must be disclosed in the prospectus. This requirement is new, and presumably includes ‘firm’ underwriting. ¢) (4) (11) Where there is no public issue. (2) The payment must be authorised by the articles. (6) The commission must not exceed the amount or rate above mentioned. (c) The amount or rate must be disclosed (1) in the statement in lieu of prospectus, or (2) in a statement in the prescribed form, signed in like manner as a statement in lieu of prospectus, and delivered before payment of the commission to the Registrar of companies for registration. The amount or rate must be disclosed in any circular or notice, not being a prospectus inviting subscriptions. The number of shares which persons have agreed for a commission to subscribe absolutely must be disclosed in the manner specified in (¢) and (4). It would seem that on a first issue, or on an issue made on the conversion of a private company into a public company, the disclosure must be made in the statement in lieu of prospectus, and on subsequent issues and in the case of a private company it must be made in the statement in the prescribed form. Unless the statement in the prescribed form has been duly filed before the shares are allotted, the commission cannot be recovered from the company [Andreae v. Zinc Mines of Great Britain (1918), 2 K.B. 454]. S. 43 also applies to private companies [Dominion of Canada General Trading v. Brigstocke (1911), 2 K.B. 648]. ‘Prescribed’ means prescribed by the Board of Trade (s. 380). 2. By Vendors or Promoters.—Vendors or promoters, who wish to pay underwriting commissions out of money or shares received from a company, must comply with the conditions OTHER MATTERS RELATING TO SHARES 97 under (i) (above), where there is a public issue, and with the conditions under (ii) (above), where there is not a public issue. The following points are to be noticed as regards underwriting generally: The commission may be paid in consideration of (a) an absolute subscription, 7.e. in effect shares may be issued firm at a discount (see below); or (b) a conditional subscription, 7.e. underwriting; or (c¢) an agreement to procure either form of subscription, 4.e. an overriding commission. Not only may shares not be applied, but the proceeds of shares issued may not be used, in payment of commission, unless the terms of the Act are complied with [Shoris v. Colwill (1909), 101 L.T. 5098]. Options to subscribe additional shares at par or at a premium price in consideration of subscribing part of the capital of a company are not affected by the Act. Such options are not an application of the shares or capital money of the companv within the prohibition [Hilder v. Dexter (1902), A.C. 474]. Under the Act of 19o8 shares could not be issued at a Issues at a discount except in so far as the payment of a commission in Discount. consideration of an absolute subscription was authorised by the Act [Ooregum Gold Co. v. Roper (1892), A.C. 125], and a colourable attempt to issue shares at a discount, purporting to be merely the payment of a commission as authorised by the Act, was restrained [Keatinge v. Paringa Consolidated Mines (1902), W.N. 15]. Under the Act of 1929 (s. 47) shares can be issued at a discount subject to the following conditions: (i) The shares issued must be shares of a class already issued. No such issue can be made until one year has elapsed from the date on which the companv was entitled to commence business. (iy The issue must be authorised by resolution of the company in general meeting and the resolution must specify the maximum rate of discount. (iv) The issue must be sanctioned by the Court. (v) The issue must be made within one month after the sanction of the Court is obtained or within such extended time as the Court may allow. Where an issue of shares can be underwritten for a commission of ten per cent. or less, it is unlikely that recourse will be had to this section as the desired result can be achieved under s. 43 without recourse to the Court. # SECRETARIAL PRACTICE Every prospectus relating to the issue of the shares and every balance sheet issued subsequently to the issue at a discount must contain particulars of the discount allowed, or so much thereof as has not been written off [s. 47 (3)], and every annual return subsequent to the issue must contain particulars of the discount so far as not written off [s. 108 (3)]. Debentures may be issued ‘at a discount, unless the provisions of the memorandum or articles of association prevent it [re Compagnie Générale, Campbell's Case (1876), 4 Ch. D. 470; Webb v. Shropshire Railways Co. (1893), 3 Ch. 307]. But where debentures issued at a discount are exchangeable for fully-paid shares this may involve the issue of shares at a discount and such an issue of debentures would be illegal Mosely v. Koffyfontein Mines (1904), 2 Ch. 108]. Any discount or commission paid for placing debentures must be disclosed in a prospectus (s. 35 and the fourth schedule) or statement in lieu (s. 39 and the fifth schedule), and must appear in the Annual Summary (s. 108), and particulars must be given on registration of the debenture [s. 79 (9)]. Moreover, any such discount not written off must be stated in the balance sheet (s.44). The previously existing power of a company to pay brokerage is reserved by the Act [s. 43 (3)]. The power had been recognised in Metropolitan Coal Association v. Scrimgeour (1895), 2 Q.B. 604), where 2} per cent. was paid. The basis of the decision in the case quoted was that 21 per cent. was a reasonable remuneration for the work done by the brokers in placing shares. The decision is limited to work done by stockbrokers, but there appears to be no reason why similar brokerage should not be paid to any person or company who bond fide renders similar services. Commissions may be paid to individuals on the issue of specific shares, subject, of course, to the provisions of s. 43; but more commonly they are paid upon a large number of shares being underwritten. ‘An ‘“‘underwriting” agreement means an agreement entered into before the shares are brought before the public, that in the event of the public not taking up the whole of them, or the number mentioned in the agreement, the underwriter will, for an agreed commission, take an allotment of such part of the shares as the public has not applied for’ [per Cotton L.J., in Licensed Victuallers’ Association (1889), 42 Ch. D. 1, at p. 6]. The object of underwriting is thus to insure the subscription of the issue. The terms of underwriting are now usually embodied in a definite agreement, but sometimes the agreement takes the OTHER MATTERS RELATING TO SHARES og form of a letter from the underwriter addressed to the promoter of the company undertaking, in consideration of a commission to be paid in any event, to take up a certain number of shares, or a proportion of them, if not subscribed for by the public. Whether such letter amounts to a concluded contract, or whether it is merely. an offer, the acceptance of which must be communicated to the underwriter, depends upon its terms [Consort Deep Level Gold Mines (1897), 1 Ch. 575]. In practice it is occasionally arranged to pay a broker or other person (say) # per cent. overriding commission for his procuring others to underwrite, and to pay to the underwriters (say) 2 per cent. for their underwriting or conditional application. A better and more usual course, however, is for the company to enter into a contract with some individual or syndicate to procure underwriting, to the satisfaction of the company, for the whole number of shares to be underwritten, the consideration being a lump sum; thereupon the individual or syndicate enters into sub-underwriting contracts with others to cover the liability undertaken on such terms as are thought fit. The prospectus in such a case usually states that ‘subunderwriting contracts have been entered into to which the company is not a party.” This statement avoids the necessity of disclosing particulars of the sub-underwriting contracts which are often numerous; but if it is made, care must be taken to see that the underwriting agreement is so framed that the statement is true. It might be held to be untrue if the underwriting agreement contained a clause releasing the underwriters on the acceptance by the company of subunderwriters’ applications and cheques. In any event such a clause is most undesirable. The underwriters should be in a position to know whether their sub-underwriters are substantial persons and should be made to guarantee their solvency. It is provided by s. 44 that ‘Where a company has paid any sums by way of commission in respect of any shares or debentures, or allowed any sums by way of discount in respect of any debentures, the total amount so paid or allowed, or so much thereof as has not been written off, shall be stated in every balance sheet of the company until the whole amount thereof has been written off.’ The register of members (s. 95), and the index thereto (s. 96), must be kept at the company’s registered office, and (except when closed pursuant to s. gg) must be open during business hours to the inspection of any member without fee. Any other person may inspect it on payment of a fee not exceeding one shilling for each inspection. The Register of Members. Closing Register, Rectification, 100 SECRETARIAL PRACTICE hours for inspection may be restricted by the company in general meeting, provided that not less than two hours daily be allowed [s. 98 (1)]. Any person, whether a member or not, may require a copy of the register, or of any part of it, on payment of a sum not exceeding sixpence for every hundred words or part of a hundred words required to be copied [s. 98 (2)]; but he is not entitled to take copies himself without payment [Balaghdt Gold Mining Co. (1901), 2 K.B. 665]. The company must comply with any request under s. 98 within ten days from the day on which the request is received by the company, and in the event of default the company and its officers are liable to penalties and the Court may order immediate inspection. The right to inspect and require copies ceases when the company is in liquidation. It may be observed that in the case of statutory companies (see Chapter XXIII), there is a right to take copies of all material parts of the register [Mutter v. Eastern and Midlands Railway (1888), 38 Ch: D. 92]. The register may be closed for a period or periods not exceeding in all thirty days in each year, but before so closing it the company must give notice by advertisement in some newspaper circulating in the district in which the registered office is situate (s. 99). A form of directors’ resolution to close the books will be found in Chapter XIV. The Court has power to rectify the register in any case where a name is improperly entered in or omitted from the register, or where there is default or unnecessary delay in entering on the register the fact of a person having ceased to be a member. The person aggrieved, or any member of the company, or the company itself, may apply to the Court for rectification [s. 100 (1)], and if the application is granted the Court may award damages to any party aggrieved [s. 100 (2)]. Where an order is made by the Court under this section the secretary’s duty is to strike out the entry ordered to be struck out by drawing a line through it, or to make the entry ordered to be made, as the case may be. He should add some such words as ‘This entry was deleted (or made) pursuant to order of the Court, dated the day of 19 An entry which has to be struck out should not be erased. An unauthorised alteration of the register by the secretary is a nullity [Indo-China Steam Navigation Co. (1917), 2 Ch. 100], since the power of rectification lies solely with the Court. The register of members is primd facie evidence of any matters directed or authorised by the Act to be inserted in it (s. 102), but the presumption thus raised may be displaced by evidence of the incorrectness of the entry. OTHER MATTERS RELATING TO SHARES 101 A company authorised to transact business in any part of His Majesty’s dominions outside Great Britain, the Channel Islands or the Isle of Man, may keep in any such part of His Majesty’s dominions where it transacts business a branch register of members resident in that part. This register is called a ‘dominion register’ and references to a colonial register occurring in any articles registered before the 1st November, 1929, are to be construed as references to a dominion register. The Registrar must be notified of the situation of the office where any dominion register is kept, and of any change in its situation, and of its discontinuance [s. 103]. A duplicate of a dominion register must be kept, duly entered up, at the company’s registered office, which duplicate is deemed to be part of the principal register, and in the event of default in this obligation or in transmitting to the registered office copies of entries in the dominion register the company and its officers are liable to penalties [s. 104]. For further details as to dominion registers, reference may be made to ss. 103-107 of the Act. Under s. 106, sections 103-105 may be applied by order in Council to foreign countries in which His Majesty the King has jurisdiction, and by s. 107 if a dominion register is lawfully kept in any part of His Majesty’s dominions outside Great Britain (including protectorates and mandated territories), s. 98 (as to inspection), and s. 100 (as to rectification of the register), may by order in Council be applied to such dominion register. In connection with the register of members, the annual list and return, or, as it is commonly called, the Annual Return (in the 1908 Act called ‘Annual List and Summary’), may conveniently be dealt with. Ss. 108-111 contain the statutory law on the subject, and the statutory form of the document applicable to a company having a share capital is contained in the sixth schedule to the Act. The Annual Return must be contained in a separate part of the register of members (which itself may be kept in one or more books), (s. 110). It must be made at least once in every year and must contain a list of all persons who, on the fourteenth day after the first or only ordinary general meeting in the year, are members of the company, and of all persons who have ceased to be members since the date of the last return, or (in the case of the first return), since the date of the company’s incorporation [s. 108 ‘z\ The list must state. (1) the names, addresses, and occupations of all the past and present members referred to above: Dominion Register. Annual Return. vOo2 SECRETARIAL PRACTICE (2) the number of shares held by each of the present members at the date of the return (z.e. on the fourteenth day mentioned above); particulars of shares transferred since the date of the last return (or in the case of the first return since the incorporation of the company) by (a) present members, and (b) the past members referred to above; (4) the dates of registration of all such transfers. If the names are not arranged in alphabetical order an index must be annexed. If the company has converted any shares into stock, and given notice of such conversion to the Registrar, the list must state the amount of stock held by each existing member instead of the amount of shares and the particulars relating to shares required by the section. The wording of the proviso might suggest that particulars of transfers of stock are not required; but the form set forth in the sixth schedule read with the notes thereto indicates that particulars of transfers of stock must be given. The above provision only becomes operative if notice of the conversion has been given to the Registrar. Under s. 5I, omission to give notice to the Registrar exposes the company and its officers to penalties, but does not invalidate the resolution. It is therefore difficult to see what is to be done if shares are converted into stock but for some reason, e.g. inadvertence, notice of such conversion is not given to the Registrar. The annual return must be completed within twenty-eight days after the first or only general meeting of the year, and should therefore, in the case of large companies, be put in hand as early as possible, as a copy of it, signed by a director or the manager or secretary, must be forwarded to the Registrar forthwith. The work of preparing the return is very much reduced by an addressing machine which is now in general use in company offices of any size. The Registrar will accept an annual return made up by an addressing machine even though the order of the christian names and surnames is reversed from that given in the sixth schedule to the Act. The looseleaf register is also very useful in preparing a lengthy return. The return must state the address of the registered office and must contain a summary, which, besides distinguishing between shares issued for cash and shares issued as fully or partly paid up otherwise than in cash, must specify a number of particulars, which may readily be ascertained OTHER MATTERS RELATING TO SHARES 103 from s. 108 (3) (5), or from the statutory form of annual summary, and need not be set out here. Amongst the particulars required by s. 108 are the particulars required by s. 144 to be included in the Register of Directors. This section is discussed on p. 149, but it may usefully be pointed out here that under subsection 6 of that section a person in accordance with whose directions or instructions the directors are accustomed to act is himself to be deemed a director and officer of the company. See also s. 110 (5). One difficulty may be mentioned: section 108 (3) (f) requires particulars of ‘the total amount of the sums, if any, paid by way of commission in respect of any shares or debentures, without any limitation to the period since the date of the last return. The form apparently contemplates the particulars of commissions paid being limited to sums paid since the date of the last return. In view of the wording of the section, however, it would appear that the words ‘since the date of the last return’ in the form must be construed as applying only to discounts on debentures. This difficulty did not arise on s. 26 of the Act of 1908, and the omission of the words since the date of the last return from s. 108 (2) (f) was probably a slip. Except in the case of a private company or an assurance company which has complied with s. 7 (4) of the Assurance Companies Act 190g, the return must also include a written copy of the last audited balance sheet, including every document required by law to be annexed thereto (see p. 180) and the auditors’ report thereon. ‘Written’ includes printed but the Registrar requires a printed copy which is filed, to be signed by the auditors. Such a copy must be certified as correct by a director or the manager or secretary of the company, and if the balance sheet is in a foreign language, an English translation, certified in the prescribed manner, must also be annexed. The form of certificate required by the Registrar is: ‘certified true copy of the last audited balance sheet and of the auditors’ certificate thereon.’ If the last balance sheet did not comply with the requirements of the law in force at the date of the audit with respect to the form of balance sheets, the requisite corrections must be made in the copy to bring it into conformity with such law and the fact that the copy has been so amended must be stated thereon. The provisions of s. 98 subsections (2) and (3) as to copies of the register apply to the annual return [s. 110 (2)]. An annual return is now required of companies not having share capital. but the particulars required to be included 2 Statement in form of Balance Sheet. Annual Return of Companies not having Share Lapital. [O04 SECRETARIAL PRACTICE in the return or in the annexed statement are only as to (1) registered office, (2) the directors, (3) certain indebtedness. ‘S. 109.) S. 110, however, applies and accordingly the return must include a certified copy of the balance sheet and other documents mentioned above. Default in complying with the requirements of the Act as to the annual return renders the company and its officers liable to penalties. Under the Act of 1908, the liability was on the company and ‘every director and manager.” The expression ‘officer’ is clearly wider and would include the secretary. The truth or falsehood of the statements contained in the return may be inquired into [British Medical Association (1888), 39 Ch. D. 61]. The company may be convicted if the return is misleading [Grosvenor Bank v. Boaler (1885), 49 J.P. 774]. An appeal lies against a conviction to the Divisional Court, but not further to the Court of Appeal [R. v. Tyler (1891), 2 Q.B. 588]. Penalties can be recovered for default made in previous years [R. v. Catholic Assurance Institution (1883), 48 L.T. 675]. Although the returns cannot be made up strictly in accordance with the statute if no general meeting has been held, yet directors, who are themselves in default as regards the holding of the meeting (s. 112), cannot rely upon the fact that no meeting has been held as a defence to proceedings for default in filing the Annual Summary [Park v. Lawton (1911), 1 K.B. 588]. Infant In the administration of companies questions of difficulty Shareholders. sometimes arise as to the course to be pursued where an infant is sought to be registered as a member, or, where an infant has been so registered, whether or not with the knowledge of the company that he was an infant, as to the rights, duties and liabilities of the company and the infant respectively. [t is settled law that an infant may be a holder of shares in a company, whether incorporated by special Act of Parliament or registered under the Companies Acts. In the case of statutory companies, to which in general the Companies Clauses Acts apply, the possible infancy of a shareholder is expressly recognised by s. 79 of the Companies Clauses Act, 1845, which provides that if any shareholder be a minor he may vote by his guardian or any one of his guardians. An infant who subscribes the memorandum of association of a registered company is a ‘person’ within the meaning of s. I of the Companies Act, 1929, so that the company is duly NOTE #¢ INFANTS (TRANSFERS, DIVIDENDS, ETC.) OTHER MATTERS RELATING TO SHARES 105 incorporated by registration notwithstanding his infancy (see re Laxon & Co. (1892), 3 Ch. 555), and by virtue of s. 25 (1) of the same Act he becomes a member upon the registration. But although an infant may legally be a shareholder he cannot compel a company to register him as a shareholder. In some cases the articles of association of a company expressly prohibit the transfer of shares to an infant. Even in the absence of such an article a company could not be compelled to register an infant. There are not in general any such provisions applicable to a statutory company, but it has been held (R. v. Midland Counties and Shannon Railway Co. (1862), 15 Irish Common Law Reports 514; 9 Law Times Reports N.S. 155) that a railway company cannot be compelled to register a transfer of partly paid shares to an infant. It was said (by O’Brien J. in that case) that the result of so doing would be to relieve the original shareholder from liability without giving the company a shareholder whom they could hold. If the company brought an action against the infant for future calls it would be open to him, during his infancy, to plead his infancy (and, it must be added, to repudiate his shares), and if the action was brought against him after he had attained his full age it would be open to him to plead that he had repudiated the transfer after coming of age. This reasoning obviously does not apply to a transfer of fully paid shares to an infant, but it is submitted that the principle is the same, for a company ought not to be compelled to accept a transferee who might conceivably repudiate the transfer at some future time, leaving the company in a difficulty as to the true ownership of the shares in case the transferor could not then be discovered, and (before repudiation) in respect of payment of dividends and other matters, although, as O’Brien J. said in the case above cited, referring to fully paid shares, ‘it is not likely that there would be any repudiation either during infancy or on majority; and the company might not raise any objection to the registering of the transfer.” There does not, however, appear to be any direct authority upon this point, all the decided cases, naturally enough, being cases in which there was a liability upon the shares. Where a company has registered an infant as a shareholder in ignorance of his infancy, it may, upon discovering the fact, obtain an order of the Court for rectification of the register by substituting the name of the transferor (Symon’s Case, L.R. 5 Ch. 298). In the case of registered companies there is a statutory provision for rectification of the register. In the case of statutory companies regulated by the Companies 106 SECRETARIAL PRACTICE Clauses Acts there is not, but the Court has jurisdiction to order the removal of a shareholder's name from the register (Ashworth v. Bristol Railway Co., 15 L.T.N.S. 561). The company cannot make the substitution without the authority of the Court. If, however, the company after discovering the infancy of the shareholder continues to. treat him as such it may be precluded by laches and delay from obtaining the substitution of the name of the transferor for that of the transferee (re National Bank of Wales, Massey and Giffin’s Case (1907), I Ch. 582; Parson's Case, LR. 8 Eq. 656). A fortiori if a company has allowed an infant to transfer shares of which he is the registered holder and has accepted and registered his transferee, who is an adult, it cannot go behind it and avoid the original transfer to the infant (Goock’s Case, L.R. 8 Ch. 266). So if a company registers an infant knowing that he is such it would seem that it cannot afterwards repudiate him. A transfer of shares to or by an infant is voidable, but not void. Where the company is a going concern the Court may determine whether an infant ought to retain the shares or not (Reid's Case, 24 Beav. 318). Assuming then that an infant has been registered as a shareholder, and that the company does not desire to have his name removed, or is precluded from doing so as above mentioned, to what extent can he insist upon exercising rights as a shareholder while he remains an infant? This may be dealt with under the following heads: — 1. Voting.—In the case of companies regulated by the Companies Clauses Acts, express provision is made (s. 79 of the Act of 1845) enabling him to vote by his guardian or guardians. In the absence of any similar provision in the articles of association of a registered company it is thought that an infant cannot vote by his guardian at a general meeting of such a company, but that in the absence of any prohibition in the articles he could vote personally. An authority to vote by his guardian might be construed as implying a prohibition against voting personally. 2. Dividends.—In general an infant is incapable of giving a legal discharge for money paid to him; but where an infant has received money be cannot demand it over again on attaining his majority (Earl of Buckinghamshire v. Drury, 2 Eden. 72). And although the receipt of dividends by him does not prevent him from repudiating his shares, yet if he does so he must repay the dividends which he has received (Bentinck’s Case, 18 Sol. Jour. 224). An infant shareholder is entitled as a OTHER MATTERS RELATING TO SHARES 107 member to the dividends declared on his shares. Prior to the 1st January, 1926, the Chancery Division of the High Court could make an order for the payment of dividends due to an infant to the guardian of such infant, or any person named in the order under s. 32 of the Infants’ Property Act, 1830. This Act was repealed by the Law of Property Amendment Act, 1924; but it is apprehended that the Court could still make such an order under its general jurisdiction. In the absence of such an order the company may be in a difficulty as an unmarried infant cannot give a good discharge for the dividends though a married infant could do so under s. 21 of the Law of Property Act, 1925. The company cannot rely upon the disability of an infant to give a legal discharge as a defence to an action brought by an infant suing by his next friend. The debtor must find a person able to give a discharge (Simpson on Infants, 4th edition, p. 41). If such an action were brought to recover dividends on an infant’s shares the company might pay the amount of the dividend into Court, and so get a good discharge for it, [Law of Property Act, 1925, s. 203 (1)], but it would seem that they would have to pay the plaintiff’s costs of the action up to the payment in. The difficulty is, however, unlikely to arise as shares are usually vested in trustees for infants, and if an infant becomes entitled to shares under a will or on an intestacy and they are not vested in trustees by the will (if any), the legal personal representatives of the deceased can appoint trustees under s. 42 of the Administration of Estates Act, 1925. Provision is made by the rules of Court for all money recovered in an action by an infant to be paid into Court or otherwise dealt with as the Court shall direct. See Order 22 R. 15. It may be added that a dividend warrant in the ordinary form is a bill of exchange payable to the order of the shareholder named in it (Thairlwall v. Great Northern Railway Co (1910), 2 K.B. 509), and his signature of it, or indorsement of it, therefore entitles the holder to receive and enforce payment of the warrant notwithstanding that the indorser is an infant [Bills of Exchange Act, 1882, s. 22 (2)], though he incurs no liability by indorsing it. An infant may have a current account with a banker, but not an overdraft. Upon the whole, if dividend warrants in the usual form are made payable to the shareholder’s order and crossed, it is difficult to see what risk the company could run in the matter. Under s. 7 of the Gasworks Clauses Act, 1871, the guardian of an infant shareholder in a gas company can give a sufficient discharge for money payable to the infant. Whether a 108 SECRETARIAL PRACTICE similar provision in the articles of association of a registered company would be effective seems doubtful. 3. Transfers.—A transfer of shares held by an infant cannot effectually be made except under an order of Court. The company should, therefore, refuse to accept a transfer made by a shareholder known to be an infant. If it does accept such a transfer it may perhaps be made liable to him on attaining his majority for any loss sustained by him by reason of the transfer. If such an order is made it will authorise some named person to transfer on behalf of the infant. But if a company does allow an infant to transfer to an adult and registers the transferee it cannot afterwards raise any question as to the voidability or otherwise of that transfer (Gooch’s Case, L.R. 8 Ch. 266). 4. Calls—An infant is liable to pay calls upon partly paid shares held by him unless and until he repudiates his shares. Taking shares is not merely a contract, but the purchase of an interest to which statutory obligations are attached (North-Western Raslway Co. v. McMichael, 5 Exch. 114). This being so, it seems that the Infants’ Relief Act, 1874, does not affect the matter (Simpson on Infants, 4th ed., p. 37). The views set forth may be summarised as follows: — I. An infant may be a holder of shares or stock in a company. 2. He cannot compel a company to register him as a holder of partly paid shares nor (probably) as a holder of fully paid shares or stock. 3. A company upon discovering that a transferee of shares who has been registered as a member is an infant, may apply to have the name of the transferor registered in his stead unless precluded from doing so by laches. 4. If a company registers an infant knowing him to be such it cannot afterwards repudiate him. 5. An infant can vote by his guardian at a general meeting of the company if the company is governed by the Companies Clauses Act, 1845, or if there is express provision for that purpose in the articles of association of a registered company. He cannot vote personally if the company is governed by the Companies Clauses Act, 1845, but if it is incorporated under the Companies Acts, he can vote personally in the absence of any prohibition express or implied in the articles. OTHER MATTERS RELATING TO SHARES 109 6. A company does not run any practical risk in issuing dividend warrants to a member, though he may be an infant. 7. A transfer of shares by an infant is voidable. It is advisable to refuse to accept a transfer by a shareholder known to be an infant; but if the company registers such a transfer to an adult it cannot go behind it. 8. An infant holder of partly paid shares is liable for calls unless and until he repudiates the shares. The allotment of shares to an infant is dealt with in Chapter VI CHAPTER X SHARE WARRANTS A Share Warrant is a document under the seal of the company to the effect that the bearer is entitled to the number of fully paid shares of the company stated therein, the distinguishing numbers being specified (Appendix F, Form 40). A share warrant is by mercantile usage and by virtue of s. 70 (3) of the Companies Act, 1929, a negotiable instrument transferable by mere delivery, that is to say, it may be passed from hand to hand, and a bond fide holder for value for the time being is entitled to the benefit of it, notwithstanding some defect in title, e.g. theft by a previous holder. The statutory law relating to share warrants is contained in ss. 70, 97, 141 (2) of the Act. Share warrants may be issued in respect of any fully paid up shares or stock by any public company limited by shares which is authorised so to do by its articles. A private company’s articles of association must not take power to issue share warrants, as otherwise it cannot limit its membership in accordance with the requirements of s. 26. Conditions of Lhe conditions governing the issue of share warrants are Issue. settled either by the company’s articles of association or by resolution of the board of directors, passed pursuant to some provision in the articles. Sometimes the conditions are printed on the back of the warrant, but it is more usual to print them separately and to issue them on application. The holder can then keep his conditions of issue by him, while he will probably lodge his warrant with his bank for safe custody. This course also enables the company more easily to vary the conditions subsequently, if it should become desirable to do so. It is highly important to guard against forgery, and the warrants should therefore be printed on paper bearing a distinctive water mark. It is desirable that the printing should be done direct from a steel plate which cannot easily he imitated. [LL SHARE WARRANTS II] Upon making an issue of share warrants the following points require consideration: (1) The power of the company and the directors to issue share warrants under the articles of association. (2) The denominations to be issued, that is to say, the number of shares to be comprised in each class of warrant it is proposed to have printed, e.g. it may be decided to issue warrants in three classes representing I, 5 and 25 shares per warrant respectively. Each warrant should be given a distinctive serial number, and the respective denominations should be denoted by an initial letter, so that if the warrants are in denominations of 1, 5 and 25 shares respectively, warrants for 1 share would have the letter A before the warrant number, warrants for 5 shares would have the letter B, and warrants for 25 shares would have the letter C. In each denomination the numbers of the warrants printed could commence with the number one. It is usual to have each class of warrant printed on a distinctive coloured paper. The distinguishing numbers of the shares comprised in each warrant would be written in by hand when the warrant is being issued. (3) The conditions of issue must in no way controvert the articles of association. A specimen set of conditions is given hereunder: 1. Share warrants shall be issued in denominations of I, 5 and 25 shares. 2. No share warrant shall be issued, except upon a request in writing by the person for the time being upon the register of members as the holder of the share or shares in respect of which the share warrant is to be issued, or in exchange for other share warrants. 3. The request shall be in such form and authenticated by such statutory declaration or other evidence as to the identity of the person making the same, and of his right or title to the share or shares as the directors shall from time to time require, and is to be lodged at the registered office of the company, or elsewhere. as the directors shall from time to time determine. 4. Before the issue of a share warrant the share certificate (if any) then outstanding in respect of the share or shares intended to be included in it must be delivered up to the company and retained by it, unless the directors shall dispense with this condition for special reasnns 5. Any member applying to have a share warrant issued shall, at the time of the application, pay to the company any stamp duty payable in respect thereof, and also such fee for each share warrant as the directors shall from time to time determine. 6. Share Warrants shall be issued under the common seal of the company and authenticated in such manner as the directors shall from time to time determine. [I2 SECRETARIAL PRACTICE 7. Each share warrant shall be in such language and form as the directors shall think fit. The number originally attached to each share shall be stated in the share warrant. 8. Coupons payable to bearer, of such number as the directors shall think fit, shall be attached to the share warrants providing for the payment of the dividends in respect of the share or shares included therein, and there shall be attached to each share warrant a talon or voucher exchangeable in due course for a fresh sheet of coupons and talon (comprising so many coupons as the directors shall determine), providing for the payment of subsequent dividends upon or in respect of such share or shares, and upon production and surrender of the appropriate talon, a fresh sheet of coupons with appropriate talon shall be issued to the person making such production and surrender. 9. Each coupon shall be distinguished by the number of the share warrant to which it belongs, and by a number showing the place it holds in the series of coupons belonging to the share warrant. The coupons shall not be expressed to be payable at any particular period, nor shall they contain any statement as to the amount which shall be payable. 10. Upon any dividend being declared to be payable upon the share or shares specified in any share warrant, the directors shall publish an advertisement in one daily newspaper published in London, and in such other newspapers, if any, as they shall think fit, stating the amount per share or per cent. payable, the date and place or places of payment, and the serial number of the coupon to be presented, and thereupon any person presenting and delivering up a coupon of that serial number at the place or one of the places stated in the said advertisement shall be entitled to receive at the expiration of such number of days (not exceeding five), after so delivering it up as the directors shall from time to time direct, the dividend payable on the share or shares specified in the share warrant to which the said coupon shall belong, according to the notice which shall have been so given by advertisement. 11. The company shall be entitled to recognise an absolute right in the bearer for the time being of any coupon so advertised as aforesaid for payment to such amount of dividend on the share warrant whereto the said coupon shall belong as shall have been as aforesaid declared payable upon presentation, and delivery of such coupon shall be a good discharge to the company accordingly. 12. If any share warrant or coupon be worn out or defaced, the directors may, upon the surrender thereof for cancellation and upon payment by the applicant of the stamp duty imposed upon the issue of a new warrant and of such fee as the directors shall determine, issue a new one in its stead. 13. No person shall as bearer of a share warrant be entitled (a) to sign a requisition for calling a meeting or to give notice of his intention to submit a resolution to a meeting, or (b) to attend or to exercise any privilege as a member at a meeting unless he shall in case (a) before or at the time of lodging such requisition or giving such notice of intention as aforesaid, or in case (b) three days at least before the day fixed for the meeting have deposited at the registered office of the company or elsewhere, as the directors shall from time to time determine, the share warrant or warrants in respect of which he claims to act and vote as aforesaid, and unless the share warrant shall remain so deposited until after the meeting and anv adjournment thereof shall SHARE WARRANTS [13 have been held. The names of more than one as joint holders of a share warrant shall not be received, and the board may, if it deem necessary, require from the depositor of share warrants as above a statutory declaration to the effect that he is the owner of the share warrant or warrants so deposited, and may endorse on such share warrant or warrants a statement of the fact, date, purpose and consequence of its or their production. 14. The company shall deliver to the person so depositing a share warrant, a certificate stating his name and address and the number of shares represented by such share warrant, and the certificate shall entitle him to attend and vote at a meeting in respect of the shares specified therein in the same way as if he were a registered member. Upon delivering up the said certificate to the company or its representatives, the share warrant or warrants in respect whereof it shall have been given shall be returned. The certificate may be as follows: — THE ‘A’ COMPAN . Ae a No..... .. This is to certify that ...... of.... has in accordance with the regulations of the com: pany deposited the undermentioned share warrants, in respect of which he is entitled to attend the general meeting of the company to be held at. on the. ....dav of... For THE ‘A’ CoMPANY LID. Secretary {Particulars of share warrants deposited.) 15. No holder of a share warrant is to be entitled to exercise any of the rights of a member (save as hereinbefore expressly provided in respect of meetings) without depositing such share warrant and stating his name and address, and (if and when the directors so require) making a declaration in writing in such form and authenticated in such manner as they may require, that he is the true owner of the share warrant so deposited, and permitting an endorsement to be made thereon of the fact, date, purpose and consequence of its deposit. 16. If the holder of a share warrant shall surrender it to be cancelled, together with all outstanding dividend coupons, and shall therewith lodge at the registered office of the company or at such other office as the directors may determine, a declaration in writing signed by him in such form and authenticated in such manner as the directors require, requesting to be registered as a member in respect of the shares specified in the said share warrant and stating in such declaration his name and address and occupation, and upon payment of such fee as the directors shall determine, he is to be entitled to have his name entered as a member in the register of members of the company and to receive the ordinary certificate for shares in respect of of the shares specified in the share warrant so surrendered. 17. The directors may from time to time vary the above conditions, and the holder of a share warrant or warrants shall be subject to any conditions made by the directors in accordance with the provisions of article of the articles of association of the company, either before or after the issue of the share warrants "14 SECRETARIAL PRACTICE 18. In the above conditions ‘share warrant’ means a warrant in respect of a share or shares issued pursuant to the Companies Act, 1929, and the articles of association of the company. Passed at a Meeting of the Divectors held on the. . cama Notes on Conditions. (For the purpose of illustration it is presumed that the company has shareholders in the United Kingdom.) It is required by Condition 10 that notice of any dividends payable be advertised, and the following is a form of advertisement for this purpose : THE ‘A’ CO. LTD. DIVIDENDS ON ORDINARY SHARES. Notice is hereby given that a dividend of four shillings per share (less United Kingdom income tax) has been declared payable upon the ordinary shares of the company as on the 1st July, 1930. Coupon No. 14 attached to share warrants will be payable on and after the 1st July, 1930, at the A. B. Bank Ltd. Lombard Street, London, E.C., at the rate of four shillings per share (less United Kingdom income tax) in payment of the aforesaid dividend. Listing forms may be obtained from the said bank. Coupons must be left three clear days for examination. By order of the Board, Secretary. Address Date Lost Share Warrants. The following intimation may sometimes be added usefully to the notice: ‘Holders of share warrants intending to submit a claim to the Inland Revenue for refund of income tax should apply for a certificate as to deduction of tax when presenting their coupons for payment.’ The above specimen conditions do not provide for the replacement of share warrants which are lost or destroyed. Sometimes a condition is added providing for such replacement upon proof of loss or destruction and on such indemnity being given as the directors deem adequate. In any event in dealing with cases of a share warrant stated to have been lost or destroyed it is necessary to act with the utmost caution. In no case should a duplicate share warrant be issued without the fullest possible indemnity from a bank SHARE WARRANTS 115 or guarantee society, and only then after most exhaustive investigation and proof that it has been lost beyond recovery. Condition 14 gives the form of the certificate to be delivered to anyone depositing warrants in accordance with Condition 13, and forms of this certificate may, when printed, be bound in book form with a counterfoil to each (see Form 41). The issue of this certificate requires to be carefully controlled and each form should bear a separate folio number. As a safeguard in the use of this form the following words should always be added at the foot, viz.: ‘Importani—The warrants named herein will be delivered only in exchange for this certificate, which must be carefully preserved.’ Subject to the articles of association the fees referred to Fees. in Conditions 5, 12 and 16 may be fixed by the Board. A specimen form of application for share warrants is given in Form 42, and upon such a form being completed and handed in to the company’s office together with the share certificates and fees payable, the company would issue a receipt (see Form 43). In recording the issue of share warrants three types of registers are usually required as follows: (1) Particulars of share warrant applications received and details of the warrants issued in respect thereof ‘see Form 46). (2) Particulars of applications received for the exchange of warrants into registered shares, giving details of the warrants surrendered (see Form 47), and (3) The serial number of every warrant printed with columns in which to enter the distinctive share numbers inserted on the warrants (see Form 48). In addition to the foregoing a stock book should be kept Stock Book. recording all the warrants printed and a summary of all warrants issued, so that at any time it may be possible to ascertain full details of the warrants remaining in stock. Before execution of a warrant, stamp duty thereon must be paid by means of an impressed stamp at three times the ad valorem duty payable upon transfers of shares, that is to say, at the rate of £3 per cent. on warrants issued on and after 1st September, 1920, the duty being calculated upon the nominal value of the shares or stock comprised in the warrant (Stamp Act, 1891, Schedule 1, Section 1). The stamp duty must be impressed before the warrant is executed. it is provided by the Stamp Act, 1891 (s. 107) that any person who, at the time when a share warrant is issued Stamp Duty. Issue. Exchange. Annual Return. 116 SECRETARIAL PRACTICE without being duly stamped, is the managing director, secretary or other principal officer of the company, shall be liable to a fine of £50. The requirements of the articles of association with regard to the affixing of the seal should be strictly followed in the case of share warrants. On issuing a share warrant, the name of the registered holder must be struck out of the register of members as if he had ceased to be a member, and the following particulars entered therein: (a) The fact of the issue of the warrant. (b) A statement of the shares [or stock] included in the warrant, distinguishing each share by its number. The date of the issue of the warrant [s. 97 (1)]. These requirements may conveniently be carried out by using a rubber stamp, which may be impressed on the right-hand side of the accounts concerned in the register of members, the latter being posted from the entries in the share warrant issue register referred to above, the distinguishing numbers of the shares being entered in the proper columns of the register of members, as if the shares were being transferred out of the member’s name. In view of the importance of safeguarding issues of warrants, the applications and cancelled share certificates are sometimes examined by the company’s auditors and the share warrants checked and initialled by them, before submission to the Board for issue and sealing, the auditors giving a certificate that the warrants are in order and duly stamped. When ready for delivery the warrants should be issued in strict accordance with the instructions upon the application, and a form on the lines of Form 42, may be usefully employed for this purpose. The necessity may arise for dealing with applications for the exchange of share warrants of certain denominations for warrants of other denominations, and for this purpose a form similar to Form 50 may be used and the receipt issued by the company upon the lodgment of such an application with the warrants for surrender may be on the lines of Form 43. The only direct information given to the Registrar of Companies regarding the issue of share warrants by a company is contained in the annual return and summary. In the return the issue of share warrants in exchange for [17 registered shares during the period covered should be treated as if the members had transferred the shares since the date of the last return. The information required to be stated in the summary is set out in s. 108 (3) of the Act and appears on the form of summary. Subject to the articles of the company the holder of a share warrant is entitled, in accordance with s. 97 (2), upon surrendering the warrant for cancellation to have his name entered as a member in the register of members. The warrant must be actually surrendered and cancelled, as otherwise the company is responsible for any loss which may be involved. [s. 97 (3)]. In dealing with such cases an application form for exchanging share warrants for registered shares should be required (see Form 49). A form of receipt for this application and for the share warrants deposited in connection therewith would be issued by the company (see Form 45), and might, in practice, be treated as a transfer receipt in the event of the shares being sold before the share certificate is ready for delivery. The application for registered shares would be entered in the share warrant surrender register (Form 47), and the entry posted in due course from there tc the holder’s account in the register of members. If by the conditions or articles the holder of a share warrant Notices. is entitled to receive notice of meetings it is generally provided that these may be given by advertisement, the right to attend being subject to the warrant having been previously deposited at the company’s office or bankers (see Specimen Condition, 13 supra). When the annual report and accounts with notice of general meeting are printed, a paragraph on the following lines may be inserted after the usual notice of meeting: SHARE WARRANTS Surrender. “Holders of share warrants are reminded that if they wish to attend and vote at the meeting, either personally or by proxy, they must, three clear days before the day appointed for the meeting, deposit their warrants at the registered offices of the company ai or at = » o & Aa Tondon The payment of dividends [see s. 70 (1)] is provided for by means of a series of detachable coupons at the foot of the warrant (see Form 40). These coupons should be numbered consecutively, the numbers commencing at the bottom right-hand corner in order to facilitate detachment, and they Dividends. Forgery. 118 SECRETARIAL PRACTICE must bear on each one the serial number of the warrant to which they belong. A talon (see Form 40) should be provided for the issue of fresh coupons when the original series is exhausted. It is usual for the secretary’s facsimile signature to be printed on the coupons and talon. When a dividend is about to be paid, arrangements should be made for the coupons to be received and paid, usually at the company’s bankers, or at the offices of the company. The exact amount payable on the whole of the shares represented by the share warrants in circulation should be transferred from the general account to Coupon No......, Account with the bankers. It should be noted that shares represented by share warrants cannot be reckoned in the qualification of a director or manager of the company, where such a qualification is required by the articles [s. 141 (2)]. A contract to sell registered shares will not be satisfied by a delivery of share warrants [Iredale v. General Securities Corporation (1916), 33 T.L.R. 67]. S. 2 of the Forgery Act, 1913, details the penalties to which a person will become liable if he forges or otherwise alters any share warrant or coupon with intent to defraud, or falsely and deceitfully personates any owner of a share warrant or coupon. (See also s. 71 of the Companies Act, 1929, as to the penalties for impersonation and s. 72 as to the penalties for forgery and kindred offences in Scotland.) Share warrants are more popular on the continent than in England, the majority of companies issuing warrants being those whose shares are dealt in abroad, and it is not uncommon for the terms on the warrants to be printed in two or three languages in parallel columns for the convenience of the foreign holders. Coupon Registers should be kept in which the payment of coupons can be recorded. The coupon listing forms are numbered consecutively and the corresponding number written or stamped against the numbers of the warrants in the coupon registers. CHAPTER XI NOTICES WE have already seen (see p. 15) that, by s. 370 of the Act, a document (which includes a notice) may be served on a company by leaving it at or sending it by post to the registered office of the company and that special provision is made for the service of the process of an English Court on a company registered in Scotland, which carries on business in England. It is proposed in this chapter to deal generally with the notices which a company may require to give to its members. A very important duty of the secretary of a company is to prepare, or supervise the preparation of, all notices, and to ensure their due despatch to the proper persons. It will be remembered that by s. 93 every limited company must have its name, including, of course, the word ‘Limited,’ mentioned in legible characters in all notices of the company, and this will head the notice. The address of the registered office of the company, from which the notice will in general be sent, will follow, with the date. Or the date will be placed at the foot of the notice on the left-hand side. As regards the signature, or authentication, of the notice, s. 33 of the Act provides that a document (which by s. 380 includes notice) or proceeding requiring authentication by a company may be signed by a director, secretary, or other authorised officer of the company, and need not be under its common seal. The secretary will not, of course, send out any notice to the shareholders without the authority of the board, and the ordinary and proper method of authenticating a notice is for the words ‘By order of the Board’ to appear over the signature of the secretary. Thus the general form of the notice will be as follows: The ‘A’ Company, Limited. London Wall, London, E.C. NOTICE is hereby given that, &c., &c. By order of the Board PJ Secretary Notices of Meetings. Length of Notice. 120 SECRETARIAL PRACTICE Notices to individuals will in general take the form of letters, headed by the name of the company, with the address and date following, and commencing in some such form as follows:—‘ Dear Sir, I am directed to inform you that, &c.,’ or “Sir, I hereby give you notice that, &c.,” and concluding, Yours faithfully, John Smith, Secretary.’ | The most important notices unquestionably are notices of general meetings. Others, such as notice of call, notice to holders of share warrants of declaration of dividend, although accuracy and clearness of expression are necessary, do not require special treatment. Ambiguity should be carefully avoided. The general meetings of a company which will have to be convened are the statutory meeting, and ordinary and extraordinary general meetings. Sometimes where special business is to be transacted the Board issue an explanatory circular with the notice convening the meeting. Such a circular need not contain the names of the directors as it is not a trade circular or business letter within s. 145. Care must be taken to insure that the circular is not misleading as a misleading circular might vitiate the resolution. Apart from the preliminary matter of ensuring that the meeting is convened by the proper authority (as to which see p. 132), the secretary’s duties are threefold. He must take care (I) that the proper length of notice is given; (2) that it is duly given to all persons entitled to receive it; and (3) that it is properly framed. The salient point to remember is that the provisions of the articles must be strictly followed, whether the meeting be the statutory meeting, or an ordinary or extraordinary general meeting. As regards the length of notice, the articles must be consulted. Table A of 1862, cl. 35, and many special articles, required seven days’ notice at the least to be given. This, without more, means seven clear days [Razlway Sleepers Co. (1885), 29 Ch. 204]; accordingly, neither the day of the service of the notice, nor the day on which the meeting is to be held, must be counted in the seven days. Therefore, in general, if the meeting is to be held on the 20th of the month, the notices, if sent by post, should be posted not later that the rrth. Articles, however, often prescribe that, unless otherwise provided, the day of the receipt of the notice shall be counted but not the day of the meeting; in such a case, where clear days are elsewhere required, this provision does not apply [Pavilion, Newcastle-on-Tyne (1911), W.N. 235]. Table A, cl. 42 provides, subject to the provisions of s. 117 (2) NOTICES [21 of the Act relating to special resolutions, for ‘seven days’ notice at the least (exclusive of the day on which the notice is served or deemed to be served, but inclusive of the day for which notice is given)’; and since clause 103 provides that a notice shall be deemed to be served in the case of a notice of a meeting at the expiration of 24 hours after the letter containing the same is posted, the latest day for posting the notice, in the case of a meeting to be held on the 20th, would be the 12th. It is therefore necessary for the secretary to ascertain from the articles, (1) the length of notice required; (2) when notice is deemed to be served; and (3) whether the day of service, or the day of the meeting is or is not to be included in the number of days. In the rare cases where the articles of a company do not provide for the length of notice, s. 115 of the Act applies, and the notice, other than a notice of a meeting for passing a special resolution, will be a seven days’ notice, served as required by Table A. If the notice convening the meeting is accompanied by the balance sheet to be circulated in accordance with s. 130, the notice must be a seven clear days’ notice or the balance sheet will not have been sent seven days before the meeting as required by that section. In the case of a notice of a meeting to pass a special resolutionnot less than 21 clear days’ notice must be given in accordance with s. 117; but with the consent of all the members entitled to attend and vote at the meeting a special resolution may be passed, although the requisite 21 days’ notice has not been given. (See further p. 126.) In despatching the notices the secretary will have to consider whether all the shareholders are entitled to receive a notice, and this depends on the articles of the company. In the absence of regulations to the contrary, all shareholders on the register are entitled to receive notices of meetings and to attend and record such votes as they are entitled to. But sometimes particular classes of shareholders, e.g. preference shareholders, or shareholders the calls upon whose shares are in arrear, are not entitled to receive notices or to attend general meetings. Even in cases where particular shareholders are simply excluded from the right to vote at general meetings, it would appear that unless the articles otherwise provide, they are not entitled to receive notices or to attend or speak at meetings [re Mackenzie & Co. (1916), 2 Ch. 450]. In some companies, whilst certain classes of shareholders are excluded from general meetings, they are specially empowered to attend meetings called for certain specified purposes, and more particularly meetings convened for the purpose of passing a resolution for winding up. To whom Notice sent. Notice of Statutory Meeting. 122 SECRETARIAL PRACTICE Notices need not be sent to shareholders who are not within reach [Union Hill Silver Co. (1870), 22 L.T. 400; Smyth v. Darley (1849), 2 H.L.C. 789]. But it is doubtful whether mere absence abroad would disentitle a member to receive notices and the articles usually provide that a member living abroad may supply an address within the United Kingdom at which notices may be given to him and that if he does not do so, he shall not be entitled to any notice of meetings. As an alternative to depriving a member living abroad, who does not supply an address in the United Kingdom, at which notices may be served on him, the articles sometimes provide for his being given notice by advertisement, or by posting up a copy at the registered office of the company. Where the company has issued share warrants to bearer, the articles, or regulations made by the directors in pursuance of the articles, may provide for notices being given to the holders by advertisement, or, where they have furnished the company with an address, for the sending of notices to that address. Sometimes non-members, e.g. debenture holders are given the right of attending and voting at meetings in which case notices should be sent to them. Their votes cannot, however, be taken into account for the purpose of a special or extraordinary resolution. It is commonly provided that, in the case of shares registered in joint names, only the person whose name stands first on the register is entitled to notice. Representatives of a deceased or bankrupt shareholder are not entitled to receive notices until they have become members by formal registration [Allen v. Gold Reefs of West Africa (1900), 1 Ch. 656] unless the articles otherwise provide. With reference to the statutory meeting, doubts have been expressed whether all the members of the company are necessarily entitled to notice of it, although they may not all be entitled to notices of other general meetings. S. 113 (1)o0f the Act provides for ‘a general meeting of the members of the company which shall be called the statutory meeting.’ S. 113 (2) provides that the statutory report shall be sent ‘to every member of the company.” If the notice of the statutory meeting is, as is common, indorsed on the statutory report, all the shareholders must necessarily receive it. But even if it is not, it would be unsafe to assume that certain members need not receive it. The words of s. 113 (I), ‘a general meeting of the members of the company,’ differ from those of s. 112 (1) (which makes provision for the annual general meeting) ‘a general meeting of every company.” Although NOTICES 123 there can be no doubt that some members may be precluded from attending general meetings of the company, other than the statutory meeting, yet having regard to the special wording of s. 113 (1) and to the object of the statutory meeting, it appears to be intended that no member is to be precluded from attending that meeting. If, however, a company has issued share warrants before the statutory meeting, it seems clear that, apart from special provisions in the articles, or regulations made by the board in pursuance thereof, a holder is not entitled to notice of the statutory meeting or to receive the report, since he is not a member unless the articles provide that he is to be a member [s. 97 (5)]. In addressing notices it is not necessary that they should be directed exactly in the same way as the member's address appears upon the register, but the member’s place of abode must be given with substantial accuracy [Liverpool Marine Insurance Co. v. Haughton (1874), 23 W.R. 93]. In large offices addressing machines should be in use and the plates of the machine exactly comply with the registered address. If a shareholder gives instructions for notices to be sent to some other person or address a careful note must be made thereof and the address plate altered accordingly. [t is a matter of the utmost importance that proper notice should be given to every shareholder who is entitled to receive it, for the omission to serve even a single member will render a resolution invalid [Smyth v. Darley (1849), 2 H.L.C. 789; Young v. Ladies Imperial Club (1920), 2 K.B. 523], unless, as is commonly the case, there are provisions in the articles to the effect that the accidental omission to give notice to any member, or the non-receipt by any member of the notice, is not to invalidate the meeting. A record should be kept in the postage book of the despatch of the precise number of notices required to be sent. It should be observed that, where by the articles notice may be given personally, or by sending it through the post to a member at his registered address, it is not properly given if it be left by hand at the registered address. In framing the notice, the primary point to remember is Contents of that the meeting has no power to pass any resolution outside Notice. the scope of the notice [Bridport Old Brewery Co. (1867), 2 Ch. App. 191; Vale of Neath Brewery Co., Lawe’s Case (1852), 1 De G.M. and G. 421; Isle of Wight Railway Co. v. Tahourdin (1884), 25 Ch. D. 320]. And, of course, the provisions of the articles must be strictly followed. The articles usually provide that the notice of a meeting shall state the place. day. and hour of meeting, and in the case Examples. 124 SECRETARIAL PRACTICE of special business the general nature of such business. Special business is usually defined as all business transacted at an extraordinary general meeting, and all business transacted at an ordinary general meeting, except the sanctioning of a dividend, and the consideration of the balance sheet, the report of the directors and auditors, and the election of directors and auditors. The principle of law, that a meeting has no power to pass any resolution outside the scope of the notice, must be considered in connexion with the common provision of articles of association, just mentioned, to the effect that a notice of a meeting to transact what is commonly described as special business must state the general nature of the business. The sufficiency of notices has frequently been discussed before the Courts, and a few instances may be mentioned as affording some guidance. It is impossible to lay down any hard and fast rule as to what notice is or is not sufficient, since it has been held, in Normandy v. Ind, Coope & Co. [(1908), 1 Ch. 84], that the sufficiency of a notice must be determined by the special circumstances of each case. Here are five concrete examples: (1) A notice specified a resolution to the effect that directors’ remuneration should be 40 per cent. of certain profits; the resolution was passed with the substitution of 30 per cent. for 40 per cent.: held, that the alteration did not invalidate the resolution [Torbock v. Lord Westbury (xg902), 2 Ch. 871]. (2) Notice was given of an extraordinary meeting for the purpose of altering the company’s articles; the notice did not indicate the nature of the alterations, which were important: held, that the notice was insufficient (Normandy v. Ind. Coope & Co. (above)]. (3) The notice convening a general meeting stated that it would be held for the purpose of receiving the directors’ report, and the election of directors and auditors. The directors’ report which accompanied the notice, mentioned special business not referred to in the notice, namely, the ratification of the board’s previous election of a director: held, that the notice and report together were sufficient notice of this special business [Boschoek Proprietary Company v. Fuke (1906), I Ch. 148]. (4) The notice of the annual general meeting stated that the meeting was for the purpose of considering and, if thought fit, of passing certain resolutions, ‘with such amendments and alterations as shall be determined upon at such meeting.” One of the resolutions was for the appointment of three specified persons as directors. To this resolution an amendment was carried that two additional specified persons should also be appointed; the articles provided that NOTICES [25 the number of directors should not be more than seven nor less than three: held, that the business transacted was within the scope of the special business indicated in the notice [Betts & Co. v. Macnaghten (1910), I Ch, 430]. (5) The notice of a meeting to pass special resolutions, authorising directors to retain the remuneration they had received as directors of a subsidiary company, did not specify the amount of such remuneration, which was large; neither did an accompanying circular: held, that the resolutions were invalid [Baillie v. Oriental Telephone (1915), 1 Ch. 503]. The above cases illustrate two general principles which have been laid down with regard to notices, namely, (1) that the notice must fairly disclose the purpose for which the meeting is convened [Kaye v. Croydon Tramways Co. (1898), 1 Ch. 358; Tiessen v. Henderson (1889), 1 Ch. 861]; and (2) that at the same time it must not be construed with excessive strictness [see remarks of Selwyn, L.J., in Wright's Case 1868), reported in footnote 12 Eq. 334]. As regards the statutory meeting the body of the notice will be in the following, or some similar form: ‘Notice is hereby given that, pursuant to s. 113 of the Companies Act, 1929, the statutory meeting of the company will be he.d at House, Street, London, E.C., on day, the day of 19 at o'clock in the noon.’ As a rule, in convening general meetings for the transaction of special business, the notice should state the resolutions which it is proposed to bring before the meeting; and then, at the meeting, as indicated by the cases referred to above, any amendment relevant to the resolution may properly be moved and carried, provided it does not go beyond the scope of the notice. A number of forms of common resolutions will be found in Chapter XIV. Great care must be taken in framing a notice of a meeting at which it is proposed to pass either a special or an extraordinary resolution. In this connexion it is important to observe the precise words of s. 117 (1) and (2) where an extraordinary resolution and a special resolution are respectively defined. These two sub-sections run = follows: I. A resolution shall be an extraordinary resolution when Extrait has been passed by a majority of not less than three- ordinary fourths of such members as, being entitled so to do, vote in Resolution. person or, where proxies are allowed, by nr, _t a general 126 SECRETARIAL PRACTICE meeting of which notice specifying the intention to propose the resolution as an extraordinary resolution has been duly given. 2. A resolution shall be a special resolution when it has been passed by such a majority as is required for the passing of an extraordinary resolution and at a general meeting of which not less than twenty-one days’ notice, specifying the intention to propose the resolution as a special resolution, has been duly given: Provided that, if all the members entitled to attend and vote at any such meeting so agree, a resolution may be proposed and passed as a special resolution at a meeting of which less than twenty-one days’ notice has been given. Extra- It will be observed that, in the case of an extraordinary or ordinary and special resolution, the notice must specify the intention to Soectst, propose the resolution as an extraordinary or special resolution eSOlulON. 5s the case may be. The body of the notice will accordingly be in the following, or some similar, form: ‘Notice is hereby given that an extraordinary general meeting of the above-named company will be held at . on day, the day of , Ig, at o'clock in the noon, when the subjoined resolution will be proposed as an [extraordinary] [special] resolution: that etc.’ The length of notice required for an extraordinary resolution is the usual length of notice for general meetings of the company, ¢.e. that specified by the articles, or, if no other provisionis made by the articles, seven clear days[s. 115 (1) (a)]. In the case of a special resolution, in the absence of agreement to the contrary among all the members entitled to attend and vote, it must be not less than twenty-one clear days. If the notice does not specify the intention to propose the resolution as an extraordinary resolution, or special resolution, as the case may be, the resolution will not be validly passed [MacConnell v. E. Prill & Co. (1916) 2 Ch. 57]. A special resolution no longer requires confirmation at a second meeting [cf. s. 69 (2) of the Act of 1908]. Under the Act of 1908 the majority required was not less than three-fourths of the members present and entitled to vote, whereas under the Act of 1929 members present but not voting are not taken into account. The requirements of the Statute and of articles of association regarding notices are intended for the protection of the shareholders, and it appears that if, in spite of non- NOTICES bas + / compliance with these requirements, the entire body of shareholders pass the resolution and waive the irregularity of the notice, the Court will declare the resolution valid [Express Engineering Works (1920), 1 Ch. 466; Oxted Motor Company (1921), 3 K.B. 32]. It is not essential to the validity of a resolution so passed that all the shareholders should have given their assent at the same time or in the same place [Parker & Cooper Ltd. v. Reading (1926), Ch. 975]. The resolution in that case was an ordinary resolution. S. 118 (4) (c) of the Act of 1929, appears to assume that the same principle applies to special and extraordinary resolutions. This is, however, open to question, particularly as regards matters which the Act itself requires to be dealt with by special resolution, e.g. reduction of capital, and it would be inadvisable to rely on an agreement reached without a meeting being held. By s. 61 of the Law of Property Act, 1925, ‘In all deeds, contracts, wills, orders and other instruments, executed, made or coming into operation after the commencement of this Act, unless the context otherwise requires: (a) ‘Month’ means calendar month. ("* ‘Person’ includes a corporation. The singular includes the plural and vice versa. & The masculine includes the feminine and vice versa. A notice would appear to be clearly within the meaning - the word ‘instrument ’ CHAPTER XII MEETINGS OF SHAREHOLDERS THE subject of this chapter is meetings of shareholders of a company, board meetings being dealt with in Chapter XIII. Besides general meetings of shareholders, there may also be class meetings, ¢.e. meetings of a particular class of shareholders summoned for a specific purpose specially affecting the class, and these are also dealt with here so far as they appear to require special mention. The provisions of the Act as to meetings while the company is a going concern are contained in a little group of ten sections, ss. 112-121, under the general title of ‘Meetings and Proceedings.” S. 112 provides for the holding of the annual general meeting. S. 113 deals with the statutory meeting and statutory report. S. 114 treats of meetings convened on requisition. S. 115 (I) contains a few general regulations as to meetings, which apply in the very rare instances where a company’s articles contain no appropriate provisions, while s. 115 (2) enables the Court to give directions as to the convening, holding and conduct of a meeting in any case where it is impracticable to proceed under ‘the article or the Act. S. 116 provides for the representation of companies at meetings of other companies and of creditors. S. 117 defines extraordinary and special resolutions. S. 118 provides for the registration of certain resolutions and agreements. S. 119 provides that resolutions passed at adjourned meetings shall be treated as having been passed on the date on which they were in fact passed. S. 120 enjoins the keeping of minutes of general meetings and board meetings. S. 121 provides for the inspection of the minute books of general meetings. A meeting primd facie means a gathering of two or more persons. And the Courts have in two cases held that there cannot in general be a meeting of one person [Sharp v. Dawes (1877), 2 Q.B.D. 26; Sanitary Carbon Co. (1877), W.N. 223]. But, as Lord Coleridge said in Sharp v. Dawes, ‘It is, of course, possible to show that the word “meeting” has a meaning different from the ordinary meaning,” and this was 28 MEETINGS OF SHAREHOLDERS 129 shown in the case of East v. Bennett Brothers (1911), 1 Ch. 163). In that case by the memorandum no new shares could be issued so as to rank equally with or in priority to the existing preference shares, unless the issue was sanctioned by an extraordinary resolution of the holders of the preference shares at a separate meeting of the holders specially summoned for the purpose. The existing preference shares being all in the hands of one person, and there being nothing in the constitution of the company to prevent one person holding them all, the word ‘meeting’ was held to be applicable to the case of a single shareholder. The general meetings of a going company comprise the statutory meeting, ordinary general meetings, and extra ordinary general meetings. The statutory meeting (s. 113) is a general meeting of the members, which must be held by a company limited by shares or limited by guarantee and having a share capital not less than one month nor more than three months from the date at which the company is entitled to commence business. The object of the statutory meeting is to give shareholders the opportunity of making themselves acquainted with the promotion and flotation of the company, both by means of the statutory report (see below) which they receive before the meeting, and by means of discussion at the meeting, in case there are any points not included in the report upon which they desire information. The provisions as to the statutory meeting and statutory report do not apply to a private company [s. 113 (10)]; but they do now apply to a company limited by guarantee if it has a share capital. The statutory meeting is a general meeting, and accordingly there seems no doubt that the provision of s. 112 that a general meeting of every company is to be held once at the least in every calendar year, and not more than fifteen months after the holding of the last preceding general meeting, is complied with in the first instance by holding the statutory meeting. ‘Calendar year’ means the period from January 1 to December 31, and not the period of a year dating from the company’s registration [Gibson v. Barton (18735), L.R. 10 Q.B. 329]. A company registered in July, 1929, will necessarily hold its statutory meeting within that year, i.e. if it becomes entitled to commence business before the end of September, 1929. Its next general meeting must be held during the year 1930, at an interval of not more than fifteen months from the statutory meeting. But a company registered on September 20. 1029. which becomes entitled to commence Statutory Meeting. 30 SECRETARIAL PRACTICE Statutory Report. business on October 10, need not necessarily hold its statutory meeting until January 10, 1930; and if it is held then, or on any preceding day in January, 1930, it would not be necessary, in order to comply with s. 113, to hold the next general meeting until the year 1931, care being taken of course that it is held not later than fifteen months after the statutory meeting. This seems to be clear from the judgment of Lush, J., in Gibson v. Barton. The statutory meeting appears, however, not to be an ordinary general meeting and accordingly in order to comply with s. 108 as to the annual return ‘see above), it would appear impracticable to treat the statutory meeting as an ordinary meeting. There would be no objection, however, to holding the ordinary meeting on the same day as the statutory meeting. Seven days at least before the day on which the statutory meeting is held the statutory report must be sent by the directors to every member of the company. The statements which the statutory report must contain are set out in s. 113 (3) of the Act. As regards the verification of the report, it must (a) be certified by not less than two directors of the company or, where there are less than two directors, by the sole director and manager [s. 113 (3)]; and (b) so far as it relates to the shares allotted by the company, and to the cash received in respect of such shares, and to the receipts and payments of the company on capital account, be certified as correct by the auditors (if any), of the company [s. 113 (4)]. Immediately after the report is despached to the members, a copy, certified as above, must be delivered to the Registrar for registration [113 (5)]. At the commencement of the meeting a list must be produced, showing the names, descriptions, and addresses of the members, with their respective holdings, and this must remain open and accessible to any member during the meeting [s. 113 (6)]. As regards the business at the statutory meeting, the members may discuss any matter relating to the formation of the company, or arising out of the statutory report, whether previous notice has been given or not. No resolution, however, may be passed, unless notice has been given in accordance with the articles [s. 113 (7)]; and if a resolution is submitted it is thought that only those members entitled to vote under the articles can vote on the resolution. As regards adjournments, the Act provides that ‘the meeting may adjourn from time to time.” This appears to introduce a modification of the usual practice, for, generally MEETINGS OF SHAREHOLDERS 131 speaking, the chairman of a meeting has a discretion as to adjournment. But it would seem that at a statutory meeting the majority can compel the chairman to adjourn. The adjourned meeting has the same powers as the original meeting and notice of a resolution can be given in the interval between the original and the adjourned meetings, if there is sufficient time to give the length of notice required by the articles of association [s. 113 (8)]. Whereas under the old law no penalty was prescribed for a default in the obligations as to statutory meeting or report, now directors in default are liable to a fine of £50 for any non-compliance with the provisions of s. 113 [s. 113 (9)]. Moreover in case of default in holding the statutory meeting or delivering the statutory report to the registrar, a shareholder may present a petition for winding up the company [ss. 168, 170 (1)], and in such case the Court may instead of making a winding up order direct that the statutory report shall be delivered or a meeting held and order the costs to be paid by those responsible for the default [s. 171 (2)]. As regards the ordinary annual general meeting, this is usually fully provided for by the articles, which should be carefully consulted. The articles generally make provision for the approximate time when it shall be held, and empower the directors to fix the date, place and hour. Any provisions of the articles must, however, be read subject to the provisions of s. 112 (1), which require a general meeting to be held once at least in every calendar year, and not more than fifteen months after the holding of the last preceding general meeting. Not holding a meeting within the calendar year, and not holding it within fifteen months after the preceding meeting, are separate offences, and the former offence 1s not committed until after December 31st, even though the period of fifteen months has already elapsed [Smedley v Registrar of Companies (1919), 1 K.B. 97]. Even before the Act of 1928, it was usual for the directors to prepare and send to the shareholders before each annual general meeting a report on the affairs of the company for the year in review, and now by s. 123 (2) of the Act of 1929 it is obligatory to attach such a report to every balance sheet. The report, in addition to dealing with the state of the company’s affairs, must state the dividend, if any, recommended by the directors, and the amount, if any, which they propose to carry to any reserve fund shown specifically on the balance sheet. It usually also mentions the directors and auditors retirine and offering themselves for re-election. A copy Annual General Meeting. Who may Convene a Meeting. 132 SECRETARIAL PRACTICE of the balance sheet and report and other documents required by law to be annexed to the balance sheet and a copy of the auditor’s report must be sent to all persons entitled to notices of general meetings not less than seven days before the meeting unless the company is a private company [s. 130 (1)]. The profit and loss account must be laid before the annual meeting: it is usual of course to issue this account with the report and balance sheet. As regards extraordinary general meetings—and indeed as regards all general meetings—it will be the secretary’s concern to see that every meeting is a valid meeting, and that any resolutions passed thereat are validly passed. Before convening a meeting it is necessary to be sure that it is convened under proper authority, and the articles should be consulted as to who may convene a meeting. In most cases (as, for instance, in clause 41 of Table A) the directors may convene an extraordinary general meeting whenever they think fit, and the secretary, acting on their instructions, will then prepare and send out notices. Unless the articles otherwise provide, directors cannot act without meeting as a board. Accordingly, the secretary’s first duty will in general be to see that the board meeting, at which it was resolved to call a general meeting, was itself duly convened and that a quorum of the directors was present. Assuming that the board meeting was in order, he may then prepare and despatch the notices. Although a secretary cannot convene a meeting without authority [State of Wyoming Syndicate (1901), 2 Ch. 431], yet, if under the authority of an irregularly constituted board be has convened a meeting, the resolutions passed at that meeting are not invalid [Boschoek Proprietary Co. v. Fuke (1906), 1 Ch. 148]. The articles may possibly provide that general meetings may be convened by others than the directors. If no provision at all as to convening meetings is contained in the articles, s. 115 of the Act supplies the deficiency by providing that, in default of regulations, two or more members holding not less than one-tenth of the issued share capital, or, if the company has not a share capital, not less than five per cent. in number of the members of the company may call a meeting. S. 115 (2) provides for cases where for any reason it is impracticable to call or conduct a meeting of a company in a proper manner. In such cases the Court is empowered, either of its own motion or on the application of any director or of any member entitled to vote, to order a meeting to be called, held and conducted in such manner as the Court thinks fit. MEETINGS OF SHAREHOLDERS 133 All regulations, however, as to convening extraordinary general meetings must be read subject to the provisions of s. 114 of the Act, which entitles ‘members of the company holding at the date of the deposit of the requisition, not less than one-tenth of such of the paid-up capital of the company as at the date of the deposit carries the right of voting at general meetings of the company, or, in the case of a company not having a share capital, members of the company representing not less than one-tenth of the total voting rights of all the members having at the said date a right to vote at general meetings of the company’ to requisition such a meeting. The requisition, which may consist of several documents in like form, must be signed by the requisitionists and deposited at the office of the company, and it must state the objects of the meeting. In the case of Fruit and Vegetable Growers v. Kekewich (1912), 2 Ch. 52), all the documents required the meeting to be convened ‘for the purpose of considering the reconstitution of the board and resolutions concerning the directorate and officers of the company’; some of them added the words ‘in addition to the affairs of the company in general.’ It was held that the documents were in like form within the meaning of the corresponding section of the Act of 1go8, and that they sufficiently indicated the objects of the meeting. Thereupon it becomes the duty of the directors, within twenty-one days, to cause a meeting to be convened, and this they will do by meeting and instructing the secretary to call the meeting. If the requisition is for the purpose of passing an extraordinary or special resolution and the directors do not give the notice required by s. 117, they will be deemed not to have duly convened the meeting [s. 114 (6)]. After the twenty-one days, if no meeting has been duly convened, the requisitionists, or any of them representing more than one-half of the total voting rights of all of them, may themselves convene one in the same manner as nearly as possible as meetings are to be convened by the directors. It was decided in 1901 by Wright, J. [re State of Wyoming Syndicate (1901), 2 Ch. 431], that the secretary cannot, within the twenty-one days, convene the meeting without the authority of the directors; but the further point was left open as to whether, after the expiration of the twenty-one days, the requisitionists could convene the meeting by notices signed by the secretary. Semble, however, they could do so as a meeting convened by the directors would be convened. In any event, no meeting convened by the requisitionists can be held more than three months from the date of deposit of the requisition. Under Ss. I14 (5) the company must reimburse to the requisitionists Requisitioned Meeting. Quorum. Chairman. 134 SECRETARIAL PRACTICE any reasonable expenses incurred by them by reason of the default of the directors in convening the meeting and any sum so repaid to the requisitionists must be charged against the remuneration of the directors in default. The matter of notices is dealt with at length in Chapter XI. On the day of the meeting, it is necessary to see that the proceedings are validly carried through. The first point is to ascertain that a quorum is present. The quorum is practically always determined by the articles and needs little further comment. In the absence of any other provision in the articles, three members (or in the case of a private company, two members) constitute a quorum [s. 115 (1) (d)]. The want of a quorum invalidates a meeting [Cambrian Peat Co. (1875), 31 L.T. 773]. The representative of a company, authorised under s. 116 of the Act to vote on its behalf, may be reckoned in the quorum [Kelantan Coco Nut Estates (1920), W. N.274]. The chair must be filled in accordance with the articles. The articles usually provide that the chairman of the board shall be chairman at general meetings; failing this, the meeting elects a chairman from among the directors, or, failing them, from among the members present. In default of, and subject to, any regulations in the articles, any person elected by the members present may take the chair [s. 115 (1) (€)]. The duties of a chairman are to preserve order, to conduct proceedings regularly, and to take care that the sense of the meeting is properly ascertained with regard to any question before it [National Dwellings Society v. Sykes (1894), 3 Ch. 159]. If the chairman improperly refuses to put an amendment, the resolution carried will be invalidated [Henderson v. Bank of Australasia (1890), 45 Ch. D. 330]. When the views of the minority have been heard, the chairman may move the closure; and if the motion is carried by the meeting, he may declare the discussion closed and put the question to the vote [Wall v. London and Northern Assets Corporation 1898), 2 Ch. 469]. In due course a resolution will be put to the meeting (see, as to resolutions, Chapter XIV) and the voting taken by a show of hands. On a show of hands the principle of ‘one man, one vote’ obtains, but by the terms of s. 117 no one may vote who is not a member of the company and no member may vote who is by the company’s regulations not entitled to vote. S. 117 is only applicable to special and extraordinary resolutions, but the principle is equally made applicable to ordinary resolutions by the articles of practically all companies, though in certain cases provisions are inserted enabling MEETINGS OF SHAREHOLDERS 135 such persons as debenture holders to vote on ordinary resolutions or on specified questions. It would obviously be easy in many cases for a member not entitled to vote to attend and vote on a show of hands; hence the desirability of members attending signing their names on entering the room. Proxies are not counted on a show of hands [Ernest v. Loma Gold Mines (1897), 1 Ch. 1]. Where a specified majority is required for the passing of any resolution a careful count should be made by the secretary. Most articles provide that a declaration of the chairman, that a resolution was been carried or lost is, unless a poll is demanded, to be deemed conclusive evidence of the fact. And it is expressly provided by s. 117 (3) in the case of special or extraordinary resolutions that the declaration of the chairman that the resolution is carried shall, unless a poll is demanded, be conclusive. The question how many votes were in fact given cannot afterwards be gone into [Arnot v. United African Lands Co. (1901), 1 Ch. 518]. But a declaration which is on the face of it erroneous in point of law is not conclusive [Caratal New Mines (1902), 2 Ch. 498]. The chairman usually has a casting vote given him by the articles. As regards the right to vote, the primd facie rule is that Voting. every member of a company whose name is on the register of shareholders is entitled to vote. The register is the only evidence by which that right can be ascertained. The fact that shares have been transferred to a member by other shareholders in order to increase their voting power, or with an object alleged to be adverse to the interests of the company, and that such member is not the beneficial owner of the shares, does not disentitle him to his vote [Pender v. Lushington (1877), 6 CL. D. 70; Stranton Iron Co. (1873), 16 Eq 559]. A prohibition in a company’s articles against a director voting as a director in respect of any matter in which he has an interest does not preclude him from voting as a shareholder at a general meeting in respect of any such matter [East Pant Du United Lead Mining Co. v. Merryweather (1864), 13 W.R. 216], even though such director be sole vendor [North West Transportation Co. v. Beatty (1887), 12 A.C. 589). Unless otherwise provided by the articles a holder of any class of shares has the right to vote. Some articles restrict the right to ordinary shareholders, whilst some companies even allow debenture holders to vote. The votes of debenture holders cannot, however, be counted on an extraordinary or special resolution. £36 SECRETARIAL PRACTICE A transmission clause is usually inserted in articles, enabling any person who becomes entitled to shares, in consequence of the death or bankruptcy of any member, to be registered in respect of those shares, and to exercise the right of voting. In the case of joint holders of shares, the articles usually give the holder whose name appears first in the register the right of voting. The bearers of share warrants are usually given power to vote, but on certain conditions (e.g. that the warrants are produced and lodged for a stated time for examination). Voting when The articles usually forbid any member upon whose shares Calls are due. any calls are in arrear to vote; and it has been held that, where an article provided that a member should not be entitled to vote whilst any call or other sum should be due and payable in respect of his shares, and the shares of a member were forfeited for non-payment of calls, the purchaser of the forfeited shares, which had been re-sold to him by the company with a certificate stating that he was to be deemed to be the holder of thie shares discharged from all calls due, was not entitled to vote [Randt Gold Mining Co. v. Wainwright (1901), I Ch. 184]. The articles also sometimes preclude from voting any member who has acquired his shares less than three months (or other specified period) before the date of the meeting. The fact that one member holds a proxy for another does not entitle him to another vote on a show of hands, but it appears that if the articles allow proxies to be given to nonmembers, every such non-member who holds a proxy can give one vote [Ernest v. Loma Gold Mines (1897), 1 Ch. 1]. Company Re- As regards voting by the representative of another compresentation. pany holding shares in the company of which the meeting is being held, inasmuch as, by s. 116 of the Act, the representative (who may be one of the officials of the company or any other person), must be authorised by resolution of the directors or other governing body, the chairman of the meeting will be entitled to reasonable evidence of the representative's appointment. It has been held that he may properly admit the vote on the evidence afforded by a copy of the resolution (Colonial Gold Reef v. Free State Rand (1914), 1 Ch. 382]. Such a representative may be reckoned in the quorum. The power to appoint a representative is now given to every corporation whether a company within the meaning of the Act or not and extends to class meetings of shareholders and to meetings of creditors as well as to general meetings. Under the new Act therefore a corporation incorporated abroad can exercise this power, Proxy. MEETINGS OF SHAREHOLDERS 137 If the voting is taken by a poll, the number of votes to Poll. which each member is entitled depends on the articles. In default of regulations every member in the case of a company originally having a share capital has one vote in respect of each share or each ten pounds of stock held by him and in any other case one vote [s. 115 (I) (f)]. Many articles provide that upon a poll every member present in person or by proxy shall have one vote for every share held by him. Various sliding scales are also sometimes adopted. It is frequently provided that no member shall have more than a fixed number of votes; sometimes a member is not given a vote unless he holds a fixed number of shares. A sliding scale is necessary where a vendor takes a large block of fully paid shares, unless it is desired that he should control the company. An agreement to vote in a particular way is good [Greenwell v. Porter (1902), 1 Ch. 530], and can be specifically enforced. [Puddephait v. Leith (1916), 1 Ch. 200]. Debenture trustees, who hold shares as such, may exercise their voting rights as they deem best, without regard to the wishes of the mortgagor company in the absence of any contract restricting their rights so to do [Siemens Brothers v. Burns (1918), 2 Ch. 324]. If a poll is duly demanded, the conclusiveness of the Demand chairman’s declaration becomes immaterial. In general of Poll. the articles provide by how many members a poll may be demanded. By s. 117 (4) it is provided that a poll may be demanded (a) by such number of members for the time being entitled under the articles to vote at the meeting as may be specified in the articles, so, however, that it shall not in any case be necessary for more than five members to make the demand; or (b) if no provision is made by the articles with respect to the right to demand the poll, by three members so entitled or by one member or two members so entitled, if that member holds or those two members together hold not less than fifteen per cent. of the paid-up share capital of the company.” S. 117, however, applies only to special and extraordinary resolutions. Consequently, if the articles provided for (say) ten members demanding a poll, this provision would be valid in the case of an ordinary resolution, although in the case of a special or extraordinary resolution five would suffice. Assuming that the members demanding a poll are duly qualified voters, which should not be taken for granted, the chairman will grant the poll. As to the taking of the poll, the regulations usually provide that it shall be takenin such manner as the chairman directs (see, e.g Table A, clause 51) 138 SECRETARIAL PRACTICE Proxies. However, under such a provision, accompanied by articles providing in the ordinary way for votes being given either personally or by proxy, for the appointment of proxies, &c., the chairman cannot direct that the poll shall be taken by means of polling papers signed by the members and delivered at the company’s office; there must be a personal attendance by the voter or his duly appointed proxy [McMillan v. Le Rot Mining Company (1906), 1 Ch. 331]. The chairman may, however, in such a case direct that the poll be taken forthwith. The most satisfactory, and in important instances the most usual, method of taking a poll is by a card vote. The secretary will, before the meeting, have examined the proxies received at the company’s office, rejecting all not duly stamped, not delivered in time, not in proper form, or sent in by members who for some reason, e.g. non-payment of calls, are not entitled to vote. The whole matter of proxy voting depends entirely upon the articles of association, and their provisions must be strictly followed. Every voter when polling should be required to sign his name, and insert the number of shares held by him on the voting paper. When all the votes have been given it is the usual practice for the chairman, or for the meeting, to appoint scrutineers to. examine the votes; sometimes the articles provide for the appointment of scrutineers. In the absence of scrutineers the responsibility of rejecting any invalid votes will rest with the chairman, who will in most cases be guided by ‘the information furnished him by the secretary. Where a poll is demanded upon more than one resolution, the resolutions should, upon the poll being taken, be separately voted upon "Blair Open Hearth vi. Reigart (1913), 108 L.T. 665]. Apollisnot a new meeting, but it is a mode of ascertaining the sense of the meeting, which is continued for that purpose [per Cotton, L.]J., in R. v. Wimbledon Local Board (1882), 8 Q.B. D. P. 465]. "It follows, that the taking of a poll is not an adjournment of the meeting and therefore does not make proxies which have been obtained after the meeting, but before the poll, available, in a case where the articles permit the use of proxies lodged a specified time before the meeting or adjourned meeting [Shaw v. Tati Concessions (1913), 1 Ch. 292]. And where the articles provide that proxies must be deposited not less than two clear days before the day for holding the meeting proxies lodged after the meeting, but more than two clear days before the day fixed for an adjournment thereof, cannot be used [McLaren v. Thompson (1917), 2 Ch. 261]. The right to vote by proxy, and the mode of exercise of the right, depend on the regulations of the company. The MEETINGS OF SHAREHOLDERS 139 articles usually provide for such a right and set out a form of proxy, and the provisions and form must be strictly followed "Harben v. Phillips (1882), 23 Ch. D. 14]. But where articles prescribe that proxies must be in a specified form, ‘or as near thereto as circumstances permit,’ and the specified form is a proxy applicable to a single meeting, general proxies, properly stamped as such, should not be excluded [Isaacs v. Chapman (1916), 32 T.L.R. 237]. There is no need for a shareholder’s signature on a proxy to be witnessed, unless the articles of the company so require. The proxy may be signed in blank so long as it is properly filled up by the time it is used [Ernest v. Loma Gold Mines 1897), 1 Ch. 1], even though at the time of the execution the date of the meeting has not been fixed [Sadgrove v. Bryden (1907), 1 Ch. 318]. It would appear that this applies to inserting the name of the proxy provided the name is inserted by someone with express or implied authority to complete it; [cf. re Lancaster, 5 C.D. 911; ex parte Duce, 13 C.D. 429]. If a company sends out forms of proxy, it asually inserts the name of the intended proxy; but if no name is inserted and a shareholder signs the form of proxy and returns it to the company without inserting any name, semble the Board of directors would have implied authority to complete it by directing the secretary to insert the name of a proxy [Ernest v. Loma Gold Mines, supra]. The above cases do not apply to meetings held pursuant to s. 153 to confirm a scheme of arrangement since the form approved by the Court is framed with the object of compelling the shareholder to exercise his own discretion in the matter of how be shall vote [cf. Magadi Soda Company, 94 L.J. Ch. 217]; nor, semble, do they apply to meetings of statutory companies (see below). Though an unqualified person is named in a proxy, yet if the qualification exists when the proxy is lodged and when it is used, it cannot be objected to [Bombay Burmah Corporation v. Dorabji (1905), A.C. 213]. The company’s funds may be used by the directors in sending out proxies containing the names of the directors, or in stamping the instruments provided the directors in so doing are acting bond fide in the interests of the company [Peel v. London and North Western Railway Co. (1907), 1 Ch. 5, overruling on this point Studdert v. Grosvenor (1886), 33 Ch. D., 528]. A proxy to be used at one specified meeting or an adjournment thereof need only be stamped with a penny stamp. In all other cases a 10s. stamp is necessary [Stamp Act, 1891 '54 & 55 Vict. c. 30), s. 801 If only a penny stamp is needed, 140 SECRETARIAL PRACTICE Adjournment. Class Meetings. the stamping must be done before execution [Sadgrove v. Bryden (1907), 1 Ch. 318], but this does not apply to proxies which need a 710s. stamp [English, Scottish and Australian Bank (1893), 3 Ch. 385], nor to proxies executed abroad (Finance Act, 1907, s. ¢), which may be stamped within thirty days after their arrival in the United Kingdom. An adhesive stamp must be cancelled by the person executing the instrument, which will otherwise be void. The articles usually give power to a chairman to adjourn a meeting, with the consent of the members present; he may do so, but is not bound to adjourn, although requested so to do by a majority of the meeting [Salisbury Gold M ining Co. v. Hathorn (1897), A.C. 268], except, it would seem, at the statutory meeting. A chairman cannot, without the consent of the shareholders, dissolve or adjourn a meeting while any business for which it was convened remains unfinished, unless the articles authorise him to do so. If he attempts to do so, the meeting may elect another chairman and proceed with the business National Dwellings Society v. Sykes (1894), 3 Ch. 150]. An adjourned meeting is legally a continuation of the original meeting [Scadding v. Lorant (1851), 3 H.L.C. 418], and therefore no business can be transacted at an adjourned meeting which was not within the scope of the original meeting, except in the case of the statutory meeting. A resolution passed at an adjourned meeting must be treated as having been passed on the date on which it was actually passed and not on any earlier date, e.g. the date on which the meeting was originally convened [s. 119]. In Neuschild v. British Equatorial Oil Co. (1925), Ch. 346, it was held that a resolution confirmed at the adjournment of a meeting which was held within one month of the first meeting was validly confirmed as a special resolution under s. 69 of the Act of 1908, although the adjourned meeting took place more than one month after the meeting at which the resolution was passed. Had s. 119 been in force the decision must have been different. Meetings of classes of shareholders may occasionally be required to be held in cases where the articles make provision for them. Where such provision is made, it is commonly with a view to enabling a specified majority of shareholders in a class to bind the minority to a variation of the rights of the class. Table A, clause 3, is typical of the kind of article which is often found in the articles of a company. It runs as follows: ‘If at any time the share capital is divided into different classes of shares, the rights attached to any MEETINGS OF SHAREHOLDERS 141 class (unless otherwise provided by the terms of issue of the shares of that class) may be varied with the consent in writing of the holders of three-fourths of the issued shares of that class, or with the sanction of an extraordinary resolution passed at a separate general meeting of the holders of the shares of the class. To every such separate general meeting the provisions of these regulations relating to general meetings shall mutatis mutandis apply, but so that the necessary quorum shall be two persons at least holding or representing by proxy one-third of the issued shares of the class, and that any holder of shares of the class present in person or by proxy may demand a poll.’ The provisions of the particular article, whatever they may be, must be carefully observed in convening and holding a class meeting, special care being exercised in ensuring that the necessary quorum is present. A proxy at a class meeting can in general only be held by a person who is a member of such class [Madras Irrigation Co. (1881), W.N. 120]. As to the right of members of the class who allege that they are anfairly prejudiced by a resolution passed under such an article to appeal to the Court, see s. 61 and supra p. 37. An important duty of the secretary is the recording of Minutes. minutes. These are required by s. 120 to be entered in books kept for the purpose, and minutes of proceedings at general meetings, as well as of proceedings at board meetings, must be kept; and they should be kept in separate books. The minutes in either case should be signed by the chairman of the meeting at which the proceedings recorded took place, or by the chairman of the next succeeding meeting. They then become evidence of the proceedings. This does not mean that they are conclusive evidence, but, in the absence of any other evidence to show their incorrectness, they will be accepted by the Courts as reliable. Neither are the minutes exclusive evidence of what took place at a meeting, and an unrecorded resolution may be proved by other evidence [re Fireproof Doors (1916), 2 Ch. 142]. Detailed information in regard to minuting will be found in Chapter XXVII. The books containing the minutes of general meetings must be kept at the registered office and the members have a statutory right to inspect without charge and to be furnished with copies on payment of sixpence per hundred words (s. 121). This right can be enforced by the Court; but it does not extend to the minutes of board meetings. It is therefore desirable to keep in separate books the minutes of the general meetings and of the directors’ meetings. CHAPTER XIII DIRECTORS By s. 380 of the Act the expression ‘director’ includes ‘any person occupying the position of director by whatever name called.” Moreover, for certain purposes, e.g. the register of Directors (s. 144) a person in accordance with whose directions or instructions the directors of a company are accustomed to Act is to be deemed to be a director. A director is a person who guides or governs the policy of a company; he may be called a manager, or a governor, or, as in the case of some financial and trust companies, a trustee; so long, however, as he occupies a position which imposes on him the duty of guiding or governing the policy of a company, he is a director in law, with all the consequent liabilities and responsibilities. A managing director is usually also an ordinary director, who, besides having as an ordinary director to guide and govern the policy of the company, has in his capacity of managing director to perform certain executive functions. In so far as he performs those functions, he is simply an officer of the company; whilst, in so far as he guides and governs the policy of the company, he is, with the other ordinary directors of the company, from some points of view, a trustee; from others, an agent or a managing partner. A detailed consideration of the position of a director is beyond the scope of this work, but it may be pointed out that ‘a director of a company is precluded from dealing on behalf of the company, with himself, and from entering into engagements in which he has a personal interest conflicting, or which possibly may conflict, with the interests of those whom he is bound by fiduciary duty to protect; and this rule is applicable to the case of one of several directors as to a managing or sole director” [North-West Transportation Co. v. Beatty (1887), 12 A.C. 587, at p. 593]. The above principle will not prevent a director being interested in contracts with the company, provided he discloses his interest as required by s. 149 (see below); nor will it prevent him voting as a 142 DIRECTORS 143 shareholder on the transaction if it comes before the company in general meeting (see above). It is perhaps desirable also to deal with certain points which are to some extent within the province of the secretary. Under the Act of 1908, there was no statutory obligation on a company to have directors at all, but every company registered after the commencement of the Act of 1929 and not being a private company must have at least two directors (s. 139). Under the old law the control might be vested in a single director or manager, and such director or manager might be a limited company [Buluwayo Market Co. (1907), 2 Ch. 458], provided of course that the limited company appointed director or manager had power to act as such under its own constitution. It is clear from s. 144 that there is nothing to prevent a corporation being a director. I and 2 Vict, cap, 106, ss. 28 to 31, and 4 and 5 Vict. cap. 14, provide that it is not lawful for any spiritual person holding any cathedral preferment, benefice, curacy, or lectureship, or who shall be licensed or allowed to perform the duties of any ecclesiastical office, to act as a director of any trading company carrying on business for gain and profit, except in a few specified cases such as schools and insurance companies. A director is usually appointed in one of the following ways: I. By the articles. 2. By the signatories to the memorandum and articles. 3. By other directors to fill a vacancy 4. By the shareholders in general meeting. The articles of most companies require a director to be a shareholder, although there is no enactment rendering it obligatory. Table A requires at least one share as a qualification. Where the articles provide that the qualification of a Qualidirector must be the holding of a certain number of shares fication in his own right,” he need not be the beneficial owner [Pulbrook v. Richmond Consolidated (1878), 9 Ch. D. 610], but he must hold the shares in such a way that the company can safely deal with him in respect of them [Bainbridge v. Smith 1889), 41 Ch. D. 462]; thus, a bankrupt director does not, after notice to the company by his trustee, hold in his own right [Sutton v. English & Colonial Produce (1902), 2 Ch. 502; see also Boschoek Proprietary Co. v. Fuke (1906), 1 Ch. 148]. Where the articles provide simply that a director Appointment. 144 SECRETARIAL PRACTICE must be the registered holder of a certain number of shares, the joint holding of shares is a sufficient qualification [Grundy v. Briggs (1910), 1 Ch. 444]. Shares represented by share warrants cannot form any part of a director’s qualification {s. 141 (2)]. I. As regards appointment by the articles, the conditions laid down by s. 140 as to signing and delivering to the Registrar a consent to act, &c., must be complied with unless the company is a private company or has not a share capital. The signing and delivery to the Registrar of an undertaking to take and pay for qualification shares is equivalent to signing the ‘memorandum [s. 140 (2)] and therefore under s. 25 constitutes an agreement to become a member. 2. The articles of association may provide that the signatories shall appoint the first directors. The appointment may be made at a meeting by a majority of the subscribers [London & Southern Counties Land Co. (1885), 31 Ch. D. 223], which must be held after, and not before, the registration of the company [Mller v. Maclean (1889), 1 Meg. 274]; but without a meeting an appointment in writing is good if all the subscribers to the memorandum of association concur [re Great Northern Salt & Chemical Works (1889), 44 Ch. D. 472], or, in case the articles give the power to the majority, if signed by the majority. 3. It is commonly provided that any casual vacancy on the board may be filled by the existing directors. 4. A director appointed to fill a casual vacancy usually holds office only until the next general meeting, when the shareholders may renew the appointment or substitute another director. Generally the shareholders in general meeting have the right to make such appointments as may be necessary to fill vacancies, however caused. In all the cases (2), (3), and (4) above, no consent to act or contract to take qualification shares is required by the Act, but the articles must be complied with, and s. 141 makes it incumbent upon a director to obtain his qualification within the time thereby limited, 7.e. two months from appointment, or within such shorter time as the articles may fix, failure to do which renders his office vacant. A person vacating office under this section is incapable of being reappointed a director antil he has obtained his qualification. The articles of many companies contain a clause to the effect that a director shall acquire his qualification within one month from his appointment, and, unless he do so, he shall be DIRECTORS 145 deemed to have agreed to take the qualification shares from the company, and the same shall be forthwith allotted to him accordingly. It was held by the Court of Appeal that ander such a clause the director, after signing the memo--andum and articles of association, had agreed to take, and the company had agreed to allot him, his qualification shares ‘Anglo-Austrian Printing Co., Isaac's Case (1892), 2 Ch. 158]. But he can escape liability by resigning within the month te Bolton & Co., Salisbury Jones’ Case (1894), 3 Ch. 356]. A director, being a trustee, must not receive his qualification shares as a gift from a promoter or any one else; nor is he entitled to purchase his qualification shares and be refunded the purchase price. Anything he may receive he must account for to the company [re Carriage Supply Association (1884), 27 Ch. D. 323; Canadian Oil Works Corporation, Hay's Case (1875), 10 Ch. App. 593; Caerphilly Colliery Co., Pearson's Case (1877), 5 Ch. D. 336; North Australian Co., Archer's Case (1892), 1 Ch. 322). Nor may he accept and hold his qualification shares in trust for and at the will of a promoter to whom he has handed blank transfers [London and South Western Canal (1911), 1 Ch. 346]. S. 142 of the Act makes it an offence for any person being an undischarged bankrupt to act as a director of or directly or indirectly to take part in or be concerned in the management of any company without leave of the Court by which he was adjudged bankrupt, but this provision does not apply to a person who was so acting on the 3rd of August 1928, and has continuously so acted since that date where the bankruptcy was prior to that date. In this section, company includes unregistered companies and companies incorporated outside Great Britain which have established a place of business within Great Britain. To avoid inconvenient consequences in cases where a director has inadvertently acted when his appointment or qualification was defective, s. 143 of the Act provides that “The acts of a director or manager shall be valid, notwithstanding any defect that may afterwards be discovered in his appointment or qualification.’ Improperly appointed directors, or directors acting after disqualification, may bind the company by their acts. Persons dealing with the company are not concerned with the indoor management thereof, and the company is bound by contracts entered into by such de facto directors on its behalf, unless it can show that the other party knew of the defective appointment [Mahony v. East Holyford Co. (1874), L.R. 7 H.L. 869: Dawson v. African Trading Co. (1898), = Ch. Remuneration. SECRETARIAL PRACTICE 6; British Asbestos Co. v. Boyd (1903), 2 Ch. 439; re Bank of jy (1901), 1 Ch. 115; Staffordshire Gas Co. (1892), 66 L.T. $13]. The remuneration of a director is not a matter of right unless it is so provided by the articles of association. Where no remuneration is given in the articles of association, the company may vote it in general meeting, but in such a case the remuneration would be a mere gratuity and semble the resolution would not give a cause of action [Dunstan v. Imperial Gas Co. (1833), 3 B. & Ad. 125]. Unless otherwise provided, a director is not entitled to his expenses of attending board meetings, in addition to his remuneration (Young v. Naval & Military, &c., of South Africa (1905), 1 K.B. 687]; nor apart from special provisions is he entitled to his fees free of income tax [Boschoek Proprietary Co. v. Fuke (1906), 1 Ch. 148]. A director may sue for his fees [Nell v. Atlanta Gold Co. 1895), 11 T.L.R. 407], or may prove for his fees with other creditors in the winding-up of a company [Beckwith's Case (1898), 1 Ch. 324]. When the articles of a company merely provide that directors’ remuneration shall be a specified sum per annum, they are not entitled to an apportioned part of such remuneration for serving for part of a year [Salton v. New Beeston Cycle Co. (1899), 1 Ch. 775; London & Northern Bank, Mc-Connell's Case (1901), 1 Ch. 728]. It has been suggested that the Apportionment Act, 1870, applies to such a case, and that a director is accordingly entitled to be remunerated in such circumstances for a broken period of a year; but the Court of Appeal has expressly left the point open. [Moriarty v. Regent's Garage & Engineering Co. (1921), 2 K.B. 766]. Where the remuneration is a certain sum per annum to be paid at such time as the directors shall determine, it is a condition precedent to a director’s right to sue that the directors shall have determined a time for payment [Caridad Copper v. Swallow (1902), 2 K.B. 44]. Similarly, if the remuneration is an aggregate sum, to be divided in such manner as the directors shall determine, a director cannot sue until the board has made a formal division [Joseph v. Sonora (Mexico) Land (1918), 34 T.L.R. 220]. But it is now usually provided that their remuneration shall accrue due de die in diem, or shall be at the rate of so much per annum. Directors who are appointed by the Court to be receivers and managers at a remuneration are entitled to their remuneration as directors in addition [South Western of Venezuela Railway (1902), 1 Ch. 701]. DIRECTORS [f members entitled to not less than one-fourth of the ag- Obligation sregate number of votes to which all the members of the com- to furnish pany are entitled make a written demand for the information, statement the directors must send to all the members within one month of remuners from the receipt of the demand a statement certified by the ’ auditors showing the aggregate amount of the remuneration or sther emoluments received in each of the three preceding financial years of the company by the directors for the time being, whether as directors or otherwise in connection with the management of the company. For this purpose any income tax, super tax, or sur tax paid by the company on behalf of a director must be added to the amount actually received by him. Moreover, if any director is also a director of any subsidiary company of the first-mentioned company, or of any other company by nomination, direct or indirect of the first-mentioned company, there must be included also in the aggregate amount any remuneration or emoluments received by such director as director of or in connection with the management of such subsidiary company or other company. The amount paid to any individual director need not be stated (s. 148). Moreover, if the company in general meeting within one month after receipt of the demand resolve that it be not furnished, the demand will be of no effect [s. 148 (I' proviso (i)]. The office of director may be vacated by disqualification, Vacation removal, resignation, or rotation. of Office. Disqualification depends upon the regulations of the company; but the majority of companies provide in their regula-‘ions that a director vacates office when he becomes bankrupt and though under such a regulation a bankrupt may be appointed director [Dawson v. African Trading Co. (1898), 1 Ch. 6]; he may not act in that capacity without leave of the Court (s, 142), or when he becomes lunatic; or without the consent of a general meeting accepts an office of profit under the company [Astley v. New Tivoli (1899), 1 Ch. 151]; or fails to acquire, or ceases to hold, his qualification shares [see s. 141 (3)]; and where the articles so provide, a director automatically vacates his office on the happening of the event which disqualifies him, and the board cannot waive the event, though the disqualification ceases, but the director is eligible for re-election on its cessation [Bodega Co. (1904), T Ch. 276]. ‘Insolvent’ in a disqualification article means commercially insolvent in the ordinary acceptation of the term [James v Rockwood Colliery Co. (1912), 28 T.IL.R. 215: London © Counties Assets v. Brighton Grand Hall (1915), z K.B. 493; see, also, Sissons & Co. v. Sissons (1910), 54 SJ 8" An 148 SECRETARIAL PRACTICE article providing that a director vacates office, ‘if he is concerned in or participates in the profits of any contract with the company,” means that he vacates office if he, or a firm of which he is a member, is concerned in any contract with the company, though he has not participated in the profits [Star Steam Laundry v. Dukas (1913), 108 L.T. 367]. Fees The company may recover from a director any fees erroneerroneously ously paid to him while disqualified [Bodega Co. (1904), 1 Ch. paid. 276]. If disqualified under s. 141 by reason of not holding his qualification shares he is liable to a penalty of £5 for every day on which he acts as director. It is usual to provide that a director shall be removed by special resolution only. The Court guards the position of a director jealously; and it will grant an injunction against anyone preventing the director from acting [Pulbrook v. Richmond Mining Co. (1878), 9 Ch. D. 610], unless the shareholders pass a resolution that they do not desire him to act as director [Harben v. Phillips (1883), 23 C.D. 14; Bainbridge v. Smith (1889), 41 C. D. 462]. The articles usually provide that a director may resign. A resignation, when given, cannot generally be withdrawn (Glossop v. Glossop (1907), 2 Ch. 370]. The most convenient way for a director to resign, where the articles do not provide for his resignation, is for him to part with his qualification shares and so ipso facto cease to be a director. Sometimes it is provided in the regulations of a company that the directors shall retire year by year by rotation. This provision is a convenient one, for a director anxious to retire need not offer himself for re-election; and a company anxious to remove a director may refuse to re-elect him after his retirement by rotation. If, as is often the case, the articles provide that if the place of a director retiring by rotation be not filled, he shall be deemed to be re-elected unless the company resolve to reduce the number of directors, the company must further resolve that the place of the retiring director be not filled. Any provision making the office of director assignable will be inoperative except so far as any assignment made pursuant thereto may be confirmed by special resolution of the company (s. 151). Amongst the books which the Act requires a company to keep at its registered office is a register of directors or managers (s. 144). For the purposes of that section a person in accordance with whose directions or instructions the directors of a company are accustomed to act is deemed to be a director and Resignation. Retiring. Assignment, Register of Directors. DIRECTORS £40 officer of the company; but if a person gives the directors advice in a professional capacity and they act on that advice, he will not thereby be deemed to be a director [s. 380 (2)]. The particulars with respect to each director required to be inserted in this register are ‘ (a) in the case of an individual his present Christian name and surname, any former Christian name or surname, his usual residential address, his nationality, and if that nationality is not the nationality of origin, his nationality of origin, and his business occupation, if any, or if he has no business occupation, but holds any other directorship or directorships, particulars of that directorship or of some one of those directorships; and (b) in the case of a corporation, its corporate name and registered or principal office.’ The company must within fourteen days from the appointment of the first directors send to the Registrar a return in the form prescribed by the Board of Trade containing the above particulars and must within fourteen days of any change among the directors or in any of the particulars send to the Registrar a notification in the form prescribed by the Board of Trade of such change [s. 144 (2)]. As to the prescribed form, see Companies (Forms) Order, 1929. A statutory right of inspecting the register of directors is given to the members without charge and to any other person on payment of one shilling [s. 144 (3)]. In this connection it must be remembered that, unless exempted by order of the Board of Trade, companies registered after November 22nd, 1916, foreign companies establishing a place of business in the United Kingdom after that date and every company licensed under the Moneylenders Act, 1927, are required to publish in trade catalogues, trade circulars, show cards and business letters, on or in which the company’s name appears, and which are issued or sent to any part of His Majesty’s dominions, the present Christian names (or initials) and surnames, any former Christian names and surnames, the nationality if not British, and, if the nationality is not the nationality of origin, the nationality of origin, of all directors (s. 145). Initials of existing Christian names are sufficient, but former Christian names must be set out in full. The business of a company is usually transacted by the directors at board meetings, and, unless the articles provide otherwise, the directors must act together as a board, and cannot act without meeting [D'Arcy v. Tamar Ry. (1867), L.R. 2 Ex. 158; Haycraft Gold Reduction Co. (1900), 2 Ch. 230]. [t is therefore now quite usual for the articles of association to provide that a resolution in writing signed by all the Board Meetings. t50 ~ SECRETARIAL PRACTICE Quorum, directors for the time being in the United Kingdom shall be as valid as if it had been passed at a meeting of directors duly convened and held. Board meetings are to some extent regulated by the articles in practically every case. Clauses 81 and 82 of Table A are, in substance, very frequently the governing regulations as to board meetings. Clause 81 is as follows: "The directors may meet together for the dispatch of business, adjourn and otherwise regulate their meetings as they think fit. Questions arising at any meeting shall be decided by a majority of votes. In case of an equality of votes, the chairman shall have a second or casting vote. A director may, and the secretary on the requisition of a director shall, at any time summon a meeting of the directors.’ By the first words of clause 81, a very wide discretion is left to directors as to regulating their meetings. It would, no doubt, be competent to them, under such a power, to frame an elaborate code of rules as to the convening of meetings and as to the procedure thereat, and to place these on the minutes when they would govern the future, until altered. But, as a rule, few if any rules are definitely made, and, apart from any practice which may grow up, matters are left very much’ at large. In consequence, decisions as to board meetings have been numerous, and where neither the articles nor any rules made by the board themselves apply, these decisions are binding. Clause 82 runs: ‘The quorum necessary for the transaction of the business of the directors may be fixed by the directors, and unless so fixed shall when the number of directors exceeds three be three, and when the number of directors does not exceed three, be two.’ The articles usually prescribe the number of directors required to constitute a quorum, but, if not so prescribed, the number who usually act in conducting the business of the company will constitute a quorum [Tavistock Ironworks Co., Lyster's Case (1867), 4 Eq. 233; see also re Bank of Syria (x901), 1 Ch. 115], or possibly a majority of the whole board [York Tramways Co. v. Willows (1882), 8 Q.B.D. 685]. Where the articles provided that the minimum number of directors should be four, that A and B should be the first directors, and that the first directors should have power to appoint others, it was held that there could be no valid board meeting until A and B had appointed two other directors [Sly, Spink & Co. (1911), 2 Ch. 430]. The articles also usually contain an article enabling a director to contract with the company. A director interested in any contract or proposed contract with the company must DIRECTORS Cy disclose his interest at the meeting of the directors at which the contract is first taken into consideration, or if the director was not then interested, or did not become interested until after the contract was made, at the next meeting after he became interested (s. 149). This section is very wide and every secretary should take legal advice as to its operation n the case of his own company. The articles usually prohibit a director voting on contracts in which he is interested though this is sometimes relaxed where it is impossible otherwise to get an independent quorum, e.g. in the case of a contract between a company and its subsidiary company. A board meeting of a number less than the quorum prescribed by the regulations is invalid [Faure Electric Accumulator Co. (1888), 40 Ch. D. 141]; and where a director may not vote on any matter in which he is interested, he does not count towards a quorum for such business [re Greymouth Point Elizabeth Co. (1904), 1 Ch. 32; North Eastern Insurance Co. (1919), 1 Ch. 198], e.g. where the business is the allotment of shares to himself [Neal v. Quinn (1916), W.N. 223]. Most companies have a clause empowering directors to act in spite of vacancies; but this will not enable them to act unless they form a quorum [Newhaven Local Board v. Newhaven School Board (1885), 30 Ch. D. 350]. Ordinary board meetings are usually held at fixed intervals ‘e.g. once a fortnight) at some fixed hour and place; extraordinary board meetings are usually summoned by the secretary or one or more of the directors. Notice ought to be given to the directors of such ordinary board meetings; if they are not held at such fixed intervals, notice must, to ansure a valid meeting, always be given to all the directors "Portuguese Copper Mines, Steele's Case (1889)], 42 Ch. D. 160]; but not if they are so far as to be out of reach, though mere absence abroad, e.g. residence in Calais, the company’s office being in Dover, would not dispense with the necessity for notice. [Halifax Sugar Co. v. Francklyn (1890), 59 L.]J. Ch. 591]. An accidental meeting of directors cannot be treated as a board meeting against the wish of one of them "Barron v. Potter (1914), 1 Ch. 895]. The notice need not state what business is to be transacted, unless it is so provided in the articles [Compagnie de Mayville v. Whitley (1896), 1 Ch. #88), or in the regulations made by the directors themselves; but it is advisable to specify the business in the case of a notice of a special board meeting. As regards the length of notice, subject to any provision in the articles or to any regulation made by the directors, no special length of notice is required. but the notice should be a reasonable one. Time and Notice. Rights. Responsibility. Delegating Powers. Secretary at Board Meetings. {52 SECRETARIAL PRACTICE The regulations often provide that any irregularity in the directors’ proceedings shall be of no effect as regards the company itself. The invalidity of a meeting will not affect persons dealing with the company without notice [Royal British Bank v. Turquand (1856), 6 E. & B. 327; County of Gloucester Bank v. Rudry Colliery Co. (1895), 1 Ch. 629]. The transactions of an invalid meeting may be ratified at a subsequent board meeting, though such ratification may be ineffective if not made within a reasonable time [Portuguese Copper Mines, Badman’s and Bosanquet’s Cases (1890), 45 Ch. D. 16]. A director can, if qualified, sustain an action in his own name against the other directors on the ground of individual injury to himself, for an injunction to restrain them from wrongfully excluding him from acting as a director [Pulbrook v. Richmond Mining Co. (1878), 9 Ch. D. 610]. A director does not make himself responsible for an act done at a meeting at which he was not present, and which is complete without further confirmation, merely by voting at a subsequent meeting for the confirmation of the minutes ‘Burton v. Bevan (1908), 2 Ch. 240]. Directors can delegate their powers to a committee of their number, if authorised so to do by the articles, but not otherwise [Howard's Case (1866), 1 Ch. App. 561]. The committee need not consist of more than one director [re Taurine Co. (1884), 25 Ch. D. 118; re Fireproof Doors (1916), 2 Ch. 142]. The articles usually provide that the regulations as to meetings of directors, keeping minutes, etc., shall apply also to meetings of committees. A person dealing with an individual director, or servant of the company, to whom power to bind the company by the particular transaction could be delegated under the articles, may be entitled to presume that such power has in fact been delegated; but he cannot do so if he was in ignorance of the power of delegation and therefore was not relying on any ostensible authority, or if the circumstances were such as to put him on enquiry, e.g. if the director with whom he was dealing was managing director but the transaction was outside the ordinary powers of a managing director [Houghton & Co. v. Nothard Lowe and Wills (1927), 1 K.B. 246; (1928), A.C. 1; Kreditbank Cassel v. Scheness, Ltd. (1927), 1 K.B. 826]. It is the duty of the secretary to be present at all board meetings. He should have prepared an Agenda paper, and he will, of course, take notes as the business proceeds, in order that he may afterwards be in a position to write the minutes. (As to minutes, see Chapter XXVIII.) The Bankers’ DIRECTORS [53 Pass Book, made up to date, should also be produced, and, if necessary, some financial statement in addition should be prepared, in order that the financial position of the company may be perfectly clear. All letters and other documents requiring the attention of the board, including cheques, share certificates, and share warrants for signature, should be ready for immediate production as and when required. A company must have a common seal, upon which its Seal name must be engraved [see s. 93 (1)]. The custody and use of the seal are matters which should be strictly provided for. This is usually provided for by resolution of the board, duly entered upon the minutes. It is common for the seal of a company to be provided with two locks, and the keys of those locks to be kept by the chairman and the secretary respectively, so that the seal cannot be used in any informal or improper manner. A useful provision is to have a duplicate set of the keys deposited with the company’s bankers in case the seal has to be used in the absence of the chairman. Table A, clause 71, provides that the seal shall not be affixed to any instrument except by the authority of a director and of the secretary, or some other person appointed by the directors; and that these persons must sign every instrument to which the seal is so affixed. Special articles frequently vary these provisions, but strict formalities are almost invariably prescribed. A company may also, if it transacts business in foreign countries and is authorised by its articles, have a facsimile thereof, called an official seal for use abroad (s. 32). The facsimile must contain on its face the name of the territory, district or place where it is to be used. The Law of Property Act, 1925, s. 74 (see Appendix M), contains provisions as to the execution of instruments by or on behalf of corporations. A company can take advantage of these provisions, notwithstanding anything in its articles. Sub-section (1) only operates in favour of a purchaser as defined by s. 205 of the same Act. A Seal Book is sometimes kept in which should be entered particulars of the documents to which the seal of the company is affixed. This should contain a description of the document, the date of the resolution authorising its sealing, and the names of those in whose presence the seal was affixc? and who signed the document. It is not advisable to affix the seal of the company unnecessarily to contracts and agreements, since, if sealed, they become liable to be stamped with a deed stamp of 10s. The making of contracts by a company, whether under seal, in Contraets. 154 SECRETARIAL PRACTICE Relief from Liability. Alternate Directors. writing, or by word of mouth, is expressly provided for by . s. 29 of the Act. The effect of this provision is to place a company in the same position as an individual in regard to the formalities to be observed. As to Bills of Exchange and Promissory Notes, see s. 30. If a director, manager, officer or auditor of a company is sued for negligence, default, breach of duty or breach of trust, the Court may relieve him, wholly or in part, from liability therefor on such terms as it thinks fit if it appears that the party charged has acted honestly and reasonably, and that having regard to all the circumstances of the case, he ought fairly to be excused (s. 372). The new law incorporating the Companies Act, 1928, contains provisions specially affecting the position of directors and it is desirable to bear in mind the steps to be taken to govern the appointment’ of alternate directors and their duties and responsibilities when so appointed. The authority to appoint an alternate is derived from the articles of association, and most modern articles give a director power to appoint’ either any other director or some other person to act in his place, either conditional on the director's absence abroad or as is now more usual in any circumstances. [t is important for the article to define clearly the position of the alternate. Where the articles provide that a director shall possess a share qualification the article empowering the appointment of an alternate should state whether the alternate shall possess such qualification. The article should also define whether the director’s remuneration is to be paid to the director himself or to his alternate: presumably in the absence of any specific authority in the articles or from the director the remuneration should be sent to the director himself, who may have made his own arrangement with his alternate as to payment for services. It is usual to make the appointment of an alternate subject to the approval of the remaining directors, and the phrasing should be either “subject to the approval of all the remaining directors of the company who may for the time being be resident in Great Britain,” or “subject to the approval of the majority of the other directors of the company,” and the articles should provide that such approval may be given either in writing or at a properly convened meetingrof the directors. The minimum of two directors which s. 1 39 of the Companies Act, 1929, requires for a public company would not be satisfied by one director and his alternate, because the latter is a substitute for the former. - For the same reason it is considered that the requirement in s. 140 as to filing with the Registrar DIRECTORS [55 of a consent in writing to act as director does not apply to an alternate. The question of the application of s. 141, which provides for a share qualification of a director, will depend upon the provisions of the clause in the articles of association governing his appointment. If a share qualification is required it must be taken up irrespective of the period during which the alternate acts, and in default the alternate will be liable to the statutory penalty. The disqualification for the office of director imposed by s. 142 applies equally to an alternate, and the penalties under that section would appear to attach equally to a director and an alternate. The protection to third parties afforded by s. 143 of the Act providing for the validity of acts of directors notwithstanding any defect that may afterwards be discovered in the appointment or qualification extends to the acts of alternate directors, notwithstanding that as the director purporting to make the appointment was not in fact a director, the alternate director is not in law a director at all. The register of directors required to be kept under s. 144 must contain an entry of the appointment of an alternate, and the same notice must be sent to the Registrar of Companies for filing in the case of an alternate as is required for a director. Likewise notice must be filed with the Registrar of any change of any particulars contained in the register [sub-s. (2)]. Although an alternate director is responsible to the company for his acts or defaults, it must be remembered that a director is from certain points of view an agent, and that an agent has no implied power to delegate his authority to another. If he has express power to do so, as in the case of an article empowering a director to appoint an alternate, the position may then well be that the alternate is the agent of his appointor, in which case the legal doctrine that a principal is responsible for the acts of his agent, which was dealt with at length by the House of Lords in Lloyd v. Grace Smath (1912); A.C. 716 (The Secretary, Vol. IX, p. 378), may be thought to apply, and then the appointing director might be responsible for the delinquencies of his alternate. The precise provisions of any particular set of articles might have, however, a material bearing on the matter, and therefore the position of an alternate may vary in different companies. A director and his alternate do not act simultaneously, but alternatively; so that when a director resumes his directoral functions his alternate ceases to act. The requirement of s. 145 for the display of particulars in respect of directors in trade catalogues, circulars, etc., applies 156 SECRETARIAL PRACTICE to alternates, and may be regarded in practice as a continuing requirement; that is to say, the name of the director and his alternate are displayed on these documents even though the alternate may be at any given time acting for his appointor, or vice versa. The provision in s. 146, under which a limited company may have directors with unlimited liability will not necessarily apply to an alternate, but this point will be governed by the provisions of the clause of the articles of association governing the appointment of alternates. In the absence of any liability of this nature for an alternate of a director whose liability is unlimited, the alternate would appear to incur no personal liability, even though the loss occurred while the alternate was acting for his appointor. It is probable, however, that the liability of the appointor would remain, even though he was not acting as director at the time. The personal liability of an alternate does not appear to be affected by his presence at a meeting of the company passing under s. 147 a special resolution rendering unlimited the liability of the directors, because his position is governed by the particular clause in the articles of association dealing with alternates and their qualification and liability (if any). An alternate director can resign to the board if he desires to retire before the termination of his prescribed term (if any) unless precluded by the articles or by specific agreement on the point with his appointor. The requirement in s. 148 of the Companies Act, 1929, for a statement as to the remuneration of directors to be furnished to shareholders does not apply to the remuneration of an alternate if, as is usually the case, he is remunerated by his appointor, since the section contemplates only disclosure of the amount paid by the company. The obligation as to disclosure by directors of their interest in contracts for which provision is made in s. 149, attaches also to an alternate, because while so acting he has all the powers of a director, including voting on contracts made by the company. The question of the application to an alternate of s. 150, which makes provision as to payments received by directors for loss of office or on retirement, would not normally apply to an alternate; but the point is one depending on the proposals in a particular case. The limitations on the efficacy of an assignment of office by a director imposéd by s. 151, do not affect the appointment of an alternate, at any rate, anless the director making the appointment is under the particular articles relieved of liability for the acts of his DIRECTORS [57 appointee. It is thought that even in that event the appointment would be valid as there is no complete assignment of the office; but it might be argued that there was an assignment pro tanto, and if it is desired to preclude any doubt as to the validity of the appointment it would be better that the director making the appointment should be responsible for the acts of his appointor. A provision in the articles of association that a resolution signed by all the directors is as effective as a resolution duly passed at a properly convened board meeting would include the signature of an alternate in lieu of the signature of the director, but not both. CHAPTER XIV RESOLUTIONS REsoLUTIONS are of two classes—resolutions of shareholders (or classes of shareholders) and resolutions of directors. Resolutions of shareholders are of three kinds—ordinary, extraordinary, and special. A shareholders’ resolution may perhaps be defined as the formal expression of the will of the company; for the proper method by which the shareholders can express the will of the Company on any particular question is by passing a resolution in general meeting. The articles usually provide that certain things can be doné with the consent of the company in general meeting. The Act also provides that certain things can only be done with the sanction of a special or extraordinary resolution. [f there are no provisions in the articles as to the way in which the consent is to be given, it may be that a formal resolution is not strictly necessary, and that the proved assent of every one of the shareholders (and not a majority only) to a proposal would bind the company. But if the articles lay down rules for ascertaining the wishes of the shareholders, those rules must be observed. Even prior to the Act of 1929, it was held that by the consent of all the members resolutions could be passed although no properly constituted meeting had been held [see re Express Engineering Works (1920), 1 Ch. 466; Oxted Motor Co. (1921), 3 K.B. 32]. The latter of these cases involved the passing of an extraordinary resolution, and statutory recognition is given to this decision by s. 118, which requires the delivery to the Registrar of copies of all such resolutions. When A resolution is invalid :— [nvalid. 1. If it contravenes any provision of the law, or is contrary to public policy; 2. If it proposes that something shall be done which is beyond the powers of the company: 8 RESOLUTIONS 159 3. If the meeting is not validly constituted according to the articles or the Act, or if any of the provisions of the articles or the Act as to the conduct of business are not observed: but a resolution duly passed by a meeting convened by a board irregularly constituted is valid (Boschoek Proprietary Co. v. Fuke (1906), 1 Ch. 148}; as also is a resolution passed at a meeting irregularly convened, but at which all the members were present and voted for the resolution (see above). Unless the articles otherwise provide, a resolution (not being special or extraordinary) can be passed, if the voting is taken by show of hands, by a simple majority of those present and entitled to vote, and, if a poll is demanded, by a simple majority of the votes given at the poll. The characteristics of extraordinary and special resolutions gxtrahave already been dealt with to some extent in Chapter XI. ordinary Both are defined in s. 117 of the Act, the effect of which is here Resolution summarised. For a resolution to be an extraordinary resolution: 1) It must be passed by a majority of not less than threefourths of the members voting in person or by proxy (where proxies are allowed); iz) Only those members who are entitled to vote may be counted; (3) It must be passed at a general meeting; (4) Notice of the meeting must have been duly given; 5) The notice must have specified the intention to propose the resolution as an extraordinary resolution. If any one or more of the above conditions are not fulfilled, the resolution is not an extraordinary resolution semble unless all the members agreed to it [see s. 118, 4 (c)]. (See above.) For a resolution to be a special resolution: 1) It must be passed by such majority as is required for the passing of an extraordinary resolution. This involves the fulfilment of the first two of the conditions specified above as necessary in the case of an extraordinary resolution. (2) It must be passed at a general meeting. (3) Not less than twenty-one days’ clear notice of the meeting must have been duly given; (4) The notice must have specified the intention to propose the resolution as a special resolution. The third requirement specified above may be dispensed Special Resolution. 160 SECRETARIAL PRACTICE with only if all the members entitled to attend and vote at the meeting agree to the resolution being passed, notwithstanding that twenty-one days’ notice has not been given. Semble if all the members agree to the resolution as a special resolution it will be valid, notwithstanding a failure to comply with the above conditions [s. 118, 4 (c)]. The effect of the other provisions of s. 117 which are applicable both to extraordinary and to special resolutions, may be thus summarised: (I) At any of the meetings referred to above, a declaration of the chairman that the resolution is carried is, unless a poll is demanded, conclusive evidence of the fact, without proof of the number or proportion of votes recorded in favour of or against the resolution. (2) At any of the meetings a poll may be demanded by the number of members specified in the articles, five being the maximum number that may be required, or, where there is no provision in the articles, by three members or by one or two members who holds or hold together not less than fifteen per cent. of the paid-up capital. (3) On a poll, members may give the number of votes to which they are entitled by the Act or by the articles. (4) Notice of any of the meetings is duly given and the meeting duly held when the notice is given and the meeting held in accordance with the Act or the articles. S. 118 of the Act provides that within fifteen days from the passing or making of :— (a) a special resolution; (6) an extraordinary resolution; {¢) a resolution agreed to by all the members of the company which, if not so agreed to, would not have been effective for its purpose unless passed as a special or extraordinary resolution as the case may be; a resolution or agreement agreed to by all the members of some class of shareholders which, if not so agreed to, would not have been effective for its purpose unless passed by a particular majority or in a particular manner, or a resolution or agreement effectively binding all the members of any class of shareholders though not agreed to by all; or a resolution for voluntary winding up passed under s. 225 (I) (a) of the Act as the case may be, a printed copy of the resolution or agreement must be forwarded + ) RESOLUTIONS 161 to the Registrar, to be recorded; and that copies of all such resolutions or agreements in force must, when articles have been registered, be embodied in or annexed to every copy of the articles issued after the passing of the resolution, or making of the agreement. In case no articles have been registered, a member is entitled to have a printed copy of every such resolution or agreement forwarded to him on payment of a sum not exceeding Is. There are penalties for default in obeying these provisions. A resolution (whether ordinary, extraordinary, special or by directors) should be clearly expressed and should deal definitely with the result intended to be attained, providing as may be necessary for the means by which the result is to be attained, and for the consequences that will follow. If a resolution required by the Act is to be passed, it should follow the wording of the Act. Thus a resolution to increase the capital should define the nature of the new shares: a resolution to pay a dividend should, besides stating the amount, state the day on and the period in respect of which it is to be paid, and the members to whom it is to be paid (e.g. those on the register on a fixed day). A few common forms, both of directors’ resolutions and of shareholders’ resolutions, are given below, and may be adapted to meet the requirements of particular cases. DIRECTORS’ RESOLUTION TO ISSUE PROSPECTUS. THAT the prospectus of the company which has been considered at this meeting be dated and be signed by the Jirectors now present, and sent to each other directof named therein for signature by him or his authorised agent, and that the same when signed by all the directors named therein it be delivered forthwith to the Registrar of Companies for registration and that immediately thereafter the prospectus be issued and advertised. DIRECTORS’ RESOLUTION TO ALLOT SHARES. The minimum subscription £ being subscribed and the application moneys payable thereon being received ResoLVED That the number of shares mentioned in the column set against the name of each applicant mentioned in the column of the application and allotment sheets (initialled for indentification by one of the directors) be, and the same are hereby, allotted to such applicant, making a total allotment of shares. Forms of Resolutions. DIRECTORS’ RESOLUTION TO MAKE CALL. THAT a call of s. per share be made upon the members (or, upon shares Nos. to ), payable on the day of , 10 , to Messrs. +hc company’s bankers, at 62 SECRETARIAL PRACTICE DIRECTORS’ RESOLUTION TO FORFEIT SHARES. THAT , the registered holder of shares of £ each, numbered to inclusive in this company, having failed to pay the instalment of per share due on the said shares on the day of » 19, and having failed to comply with the notice served upon him, dated the day of ~» I9 , the said shares be and the same are hereby forfeited. DIRECTORS’ RESOLUTION TO PAY A DIVIDEND. THAT a dividend of per share be paid upon the preference shares, and a dividend of per share be recommended to be paid upon the ordinary shares of the company in respect of the period of months to the th last to all shareholders whose names appear on the company’s register at the close of business on the day of : 19 , and that such dividends be paid on the day of 10 DIRECTORS’ RESOLUTION TO CLOSE BOOKS. THAT the register of members of the company be closed from the day of to the day of , Ia , both inclusive. SPECIAL RESOLUTION TO ALTER ARTICLES. THAT the articles of association of the company be altered as follows: r. That in article 17 the words * be inserted after the words ‘ 2. That in article 23 the words be omitted. 3. That the following article be substituted for article 113: ) J REsoLUTION OF COMPANY APPOINTING COMMITTEE OF INVESTIGATION. THAT a committee be appointed to investigate the affairs of the company, and that the committee have right of access to the books, papers, documents, and accounts of the company with power to examine directors and officials of the company, and power to employ at the expense of the company professional assistance in the investigation, and that the committee do make a report to be circulated among the shareholders, and that and be members of the committee, with power to add to their number, and that this meeting be adjourned to to receive the report. RESOLUTION OF COMPANY TO INCREASE CAPITAL. THAT the capital of the company be increased to £ by the creation of new preference shares of each, to be numbered to inclusive to rank pari passu as regards dividend and in all other respects with the preference shares of the original capital of the company, and that such new shares be offered in the first instance at a premium of RESOLUTIONS 167 per share to the members of the company in proportion, as nearly as may be, to their holdings, whether of preference or of ordinary shares, and that the directors be authorised to dispose of all such new shares as may not be taken up by the members of the company as aforesaid to such persons and upon such terms as they may deem expedient in the interests of the company. RESOLUTION OF COMPANY TO ISSUE DEBENTURES. THAT the directors be and they are hereby authorised to borrow the sum of £50,000, and to secure the same by the issue of 500 debentures of £100 each, bearing interest at the rate of 5 per cent. per annum payable half yearly on and and charged upon the undertaking of the company, and all its assets, present and future, including its uncalled capital, and that except as aforesaid the said debentures be issued upon such terms and conditions in all respects as the directors think fit. EXTRAORDINARY REsoLuTIiON TO WIND UP. THAT the company cannot by reason of its liabilities continue its business, and that it is advisable to wind up the same. SpeciAL REesoLuTIiON TO WIND UP. THAT the company be wound up voluntarily As regards amendments to resolutions the following points Amendmay be noted: ments. Any amendment relevant to the motion may be moved, provided that it does not go beyond the scope of the notice convening the meeting, or of the business that mav be trans. acted at a meeting without notice. [f such an amendment is improperly withheld by the chairman from the meeting, the Court will declare the resolution invalid [Henderson v. Bank of Australasia (1890), 45 Ch. D. 330]. If such an amendment is passed, the chairman should put to the meeting the resolution as amended. If there are more amendments than one, they may be put to the meeting in the order in which they are proposed, or, if this is inconvenient, in the order which the chairman judges most convenient. If an amendment is proposed to an amendment, the former should be put first, and if it is passed, the amendment as amended should then be put, followed by the resolution as amended. Where under the old law a special resolution required confirmation, an amendment altering the terms of the resolution could not be moved at the second meeting which must simply confirm or reject the resolution as passed at the first meeting [Wall v. London & Northern Assets Corporation (1898), 2 Ch. 469). [64 SECRETARIAL PRACTICE Directors’ resolutions are passed by a simple majority in all cases. If the voting is equal, the chairman may, if so authorised by the articles, give a second or casting vote. If he has no casting vote, and the voting is equal, the resolution is not carried. The matter of voting generally is dealt with in Chapter XII. Although ‘a resolution of the company in general meeting is a formal expression of the will of the maj ority of the shareholders, yet it does not follow that such a resolufion is effective to control the policy of the company, for by the articles the control may be vested in the directors. Sometimes practically the whole of a company’s powers are vested in the directors, and in that case, unless the articles otherwise provide, neither an ordinary resolution, nor even an extraordinary resolution, of the members can coerce the directors in the exercise of those powers, but the articles must be altered by special resolution, if the directors are to be controlled [see Automatic Self-Cleansing Filter Co. v. Cuninghame (1906), 2 Ch. 34; Marshall's Valve Gear Co. v. Manning, Wardle & Co. (1909), 1 Ch. 267; Quin & Axtens v. Salmon (1909), A.C. 442]. CHAFTER Xv ACCOUNTS IN a company of any magnitude the book-keeping and accounts will be under the control of a separate official, who may or may not be responsible to the directors through the secretary, but the secretary who desires to be efficient in the highest sense—and indeed every man wholly or partially controlling or directing a commercial undertaking— needs to be acquainted with the principles of accountancy, even if his duties do not actually demand executive ability in that direction. It is for this reason that this chapter is included. It is intended to be of assistance to the secretary in the execution of his duties to the directors of his company, and is not in any way a treatise on book-keeping or accountancy. There are many excellent works dealing with accountancy which can be consulted by any secretary who requires a deeper knowledge of the subject. The secretary is in a fiduciary position in relation to his directors, and through them to the proprietors of his company, and in this sense the more abstruse side of accountancy interests him to a greater extent than the elements of bookkeeping. He should be concerned with the results obtained by the book-keepers rather than with the actual machinery of book-keeping. In every large business in which the accounts are in the charge of a separate official, it may be taken for granted that an adequate system of book-keeping by double entry will be in use, and that it will be intelligently adapted to the particular business concerned, so that the results obtained may be clear and of practical service to the directors. If the secretary is directly responsible for the accounts he will necessarily, unless the business operations are very small in number, require the ‘assistance of a competent book-keeper whose work ir detail will be checked bv the auditors of the company. When there is a responsioi: the company, the secretar . accountant in the service of >a the directors, relies upon Duties of Secretary. Statutory Books. 166 SECRETARIAL PRACTICE the accountant for information to guide him in his actions and to justify him in his decisions, and for this reason the sercetary is primarily concerned with the results of the accountant’s work, but only secondarily with the means used to obtain the results. Proper books of account must be kept by all companies. Indeed a statutory obligation is now imposed by s. 122 to keep proper books of account relating to (a) all sums of money received and expended and the matters in respect of which the receipt and expenditure takes place, (b) all sales and purchases of goods and (c) the assets and liabilities of the company. The books must be kept at the registered office of the company or at such other place as the directors think fit and must at all times be open to inspection by the directors. The books kept pursuant to this section will vary according to the circumstances of the case; but must be so kept as to enable the annual balance sheet to be framed in accordance with the statutory provisions (see Chapter XVI). They will include the cash book, containing the banking accounts in detail. In large concerns, which frequently have more than one banker in England, and conceivably one or more banking accounts in countries with which they trade, there may be more than one cash book. In any case the procedure of book-keeping will be the same, and the result should be to provide the secretary at intervals with a return showing the balance according to the banker’s pass book, the cheques issued but not cleared, the lodgments made but not credited, and finally the balance available for actual drawings. In large concerns, or concerns working with a small margin of free capital, this should be prepared daily. Such a return will, in case of need, also show amounts standing on deposit account, overdrafts, and balances at foreign bankers available for transfer to the main banking account. It will also be necessary for the secretary of any concern trading largely with foreign countries to have a daily return of the rates of exchange between England and the countries in which his company buys or sells. Until recently rates of exchange were so stabilised that this was not of so great importance, but at present (and so far as can be seen, for some time to come) it is and will be very necessary in the circumstances mentioned. With such returns as these the secretary will be able to forecast financial requirements. He will probably require to see that sufficient money is accumulated for the payment of salaries, and (in the case of a manufacturing concern) wages, and raw materials. He will be provided with a list of recurring commitments, such as rents, rates. water, gas. etc.. ACCOUNTS 16-and of intermittent commitments such as bills payable, and of special commitments, as for example large or special expenditure on plant or buildings. Speaking generally it will be the duty of the secretary to see that the directors are provided at their meetings with a summary of the financial transactions since their previous meeting, a statement of the cash resources at the time of the meeting, a statement of cheques to be drawn or bills to be accepted at the meeting, and a forecast of the anticipated collections and disbursements to be made. Subsidiary to the work of the cashier as affecting the secretary is the petty cash, which in the case of large concerns may involve the disbursement of very considerable amounts annually. It is advisable that the petty cash should be in the nature of an imprest fund, and that a synopsis of the expenditure through the petty cash during any given period should be provided, and a cheque drawn for the total amount, so as to bring the fund up to its original amount. In this way the expenditure from petty cash is brought before the secretary and directors in an analysed form, and their especial attention is called to any large or exceptional disbursements. In the case of branches it may be arranged for their petty cash expenditure to be made from an imprest fund provided out of the petty cash of the main office, and always forming part of the petty cash balance of that office. Postage should be subsidiary to petty cash, and should be treated as an imprest fund, to be brought up daily to its original amount. The cashier, or some other official appointed by the secretary for the purpose, should examine the postage book and the balance of stamps and money in hand at irregular intervals, and the secretary himself should endeavour occasionally to examine and call for the postage book, and the record (if a separate record be kept) of the cost of telegrams despatched. The consciousness that such an examination may at any time be made is a powerful deterrent of petty defalcations. It will be found also that the cost of providing printed petty cash dockets is amply repaid. It will also be found a salutary provision to couple with the use of these dockets the rule that no payment is to be made by the cashier without the counter-signature of the head of a department, or (if the sum be over a certain predetermined amount) of the secretary himself. This should apply also to payments which cannot immediately be passed through the books, such as advances (to be accounted for later) to members of the staff for travelling expenses. Statements for Board. Petty Cash, 168 SECRETARIAL PRACTICE Payments at In the case of large branches, or large works separated Branches. from the main office, it will probably be more practical for separate banking accounts to be opened as well as separate petty cash accounts. Copies of these, with the necessary supporting vouchers can be sent to the main office at regular intervals to be embodied in the books of the company. When the works or spending departments are separated by some distance from the main office at which the principal book-keeping of the company is done, it is particularly necessary that care should be taken to devise a system which provides the necessary safeguards for the directors and the secretary and other officials. Effective methods are, that either the whole of the cash transactions of the works or branch shall be worked by what are in effect imprest funds, or preferably, that as much as possible of the cash disbursements shall be made direct from the main office. Under either system it will be necessary for the works or branch to requisition what monies they require from the head office for wages and salaries as there is no other place at which the disbursements of these sums can be made than the actual place where they are earned. Cheques for the amounts required to be disbursed will be paid into the works’ banking account, and the receipts for the disbursements will afterwards be sent to the head office for checking. This, however, may be modified in part by an arrangement for the payment of the wages of higher officials of the works or branch direct from the head office, by cheque or other means. It is possible, under the first of the alternatives mentioned above, for money to be provided for the other disbursements of works or branches—such as those for purchases of materials —against requisitions supported by detailed lists of the accounts which the works or branch have to pay. For many reasons, however, it is advisable that payments of money by works or branches should be reduced to a minimum. Therefore so far as concerns purchases of materials or other goods, or contracts for work, the invoices or certificates should be received by the works or branch, checked, authorised for payment by them and forwarded to the head office. At the same time arrangements should exist by which suppliers send their monthly statements of account or other demands for payment direct to the head office, who will issue cheques in payment directly to the suppliers. Under this system there is a fairly adequate safeguard against collusion or fraud, while at the same time there is an added security against error from the book-keeping point of view. ACCOUNTS 169 The secretary may be responsible in some cases for the conduct of foreign branches of his company, or of agencies. No section of the accounts of a company is more difficult to control than this; personal inspection can only be maintained at comparatively long intervals and at an expense which is apt to become onerous. In very large businesses a travelling audit is conducted from the head office, and in some cases the book-keepers of the various foreign branches interchange visits at uncertain intervals determined by the head office. In such cases as these the secretary at the head office may arrange for a series of reports which will assure him of the well-being of the branches. But short of this it will be his duty, in conjunction with the accountant, to ensure the good and proper conduct of the branches so far as is possible under distant control. The most difficult part of this problem will obviously concern the cash at the branches, and this can be most effectively controlled by the following system, which has been successfully used by a number of companies having foreign branches. Each foreign branch has two accounts opened at a local bank, into one of which all collections are paid without any deduction. A certain amount of control of these collections is maintained by the head office, owing to the fact that the latter is aware of the debts owing each month by customers in connection with each branch. From this first or No. 1 account (over which no official at the branch has any power other than that of lodging amounts collected) there is transferred automatically by the banker at the end of each month to a second or No. 2 account a fixed monthly sum, calculated by experience to be sufficient to meet the expenses of the branch for the ensuing month. The manager of the local branch has power to draw upon this second account only. By this means, although the possibility of fraud or defalcation is obviously not avoided, yet the time during which defalcations might remain undiscovered is limited, and the amount endangered is also limited. At the same time the personnel at the local branch are aware that by the means described there is a constant, but not in any way humiliating, check sustained by the head office. The remaining balance in the first account can either be drawn upon by the directors as need arises, or instructions can be given to the foreign or branch bankers to transfer either fixed amounts at irregular intervals, or irregular amounts at {ir d intervals to the company’s main banking account. Similar procedure may be adopted in those cases where Foreign Branches. 170 SECRETARIAL PRACTICE Periodical Summaries and Analyses. Departmental Analvses. the foreign branches take the form (so frequent nowadays) of subsidiary companies registered in the country in which they trade, except that in these cases the directors of the subsidiary company will release the balance of funds in the first or No. 1 account as and when need arises. It may be taken as a rule that the larger the business the secretary has to control, the more difficult it will be to keep in touch with details, and it is therefore to the advantage of the secretary to devise forms and synopses which, while they arise logically out of the work of departments and do not add to it more than is absolutely necessary, shall give the secretary, and through him the directors, a condensed view of all that happens. In regard to cash there can be no more important or helpful document than an analysis of the cash books, bringing together of course the details of whatever number of cash books may be in use. This document should be prepared each month, beginning and ending with the combined bank balances shown on the cash books. These balances will naturally be checked by the secretary with the pass books and the cashier's agreements thereof. The details of receipts may be briefly sub-divided according to the needs of the business, either into classes of goods sold, or geographically into the districts in which the sales are made. The expenditure should also be classified so as to show the monthly expenditure on salaries, wages, raw materials ‘with any sub-analysis which may be necessary), freight, and so on, according to the nature of the business. In manufacturing concerns a useful subsidiary figure is the average number of workmen who earned the wages shown, and this can, if necessary, be further sub-divided into classes of goods. made, or (if more convenient to the needs of directors) into. shop departments. A refinement of great utility is to combine in this main analysis the sub-analysis of amounts spent through the petty cash, instead of showing merely the amounts paid over to the cashier for petty cash purposes. This will necessitate bringing in the petty cash balance at the beginning and end of each month. A combination of the twelve monthly analyses here described will provide an invaluable document, forming a chart of what may be called the financial circulatory system of the business. The immediate duties of the secretary in connection with accounts and cognate branches of his business must depend largely on the size of that business and the method and perfection of its organisation. In most companies the accountant, the sales manager, the works manager, the ACCOUNTS [71 chief engineer, or other chief officials will report periodically in regard to their own branches of the business. A report will, in all probability, be made on all these branches at the periodical meetings of the board, and it will fall within the secretary’s province to provide returns of this nature, dealing with other than the purely secretarial side of the business. The secretary will be well advised to keep running summaries of the work of all departments, such as the value and classification of orders received, and of goods delivered; of the output of the factory, mine, or estate concerned; of the number of men engaged in each operation of the work, and so on, according to the nature of the business. He should also periodically have in his hands a list of balances owing by customers and to suppliers, with indication of the approximate dates when both become payable. Lists of bills receivable and payable are also necessary for that full survey of the business which the modern secretary should have, if he is to be the ‘chief of staff’ to the board. The modern secretary should be skilled in reading a balance sheet. He should be able to examine the published accounts of any company, and, if called upon, reduce them to their lowest terms, leaving out extraneous items and taking into account all relative considerations, even though not immediately apparent in the wording and figures, so that a person not so skilled may be able to digest the result. The secretary should assure himself that vouchers or invoices, duly checked and passed by the authorised officials, are in existence for all amounts, payment of which is demanded by the cashier. He should also see that complete lists of these items, with brief descriptions and the numbers of the cheques, accompany the cheques which are placed for signature before the board, or the finance committee, if one exists. One very important incidental task of the secretary, frequently overlooked, is to make sure that duplicate payments for the same items are not called for, either bv negligence or fraud. He should personally examine all spoiled cheques and assure himself that they are cancelled anc that every cheque is used or accounted for. A careful secretary will always require cheques to be Drawing ot drawn fully, legibly, and according to the oft repeated advice Cheques. of bankers, to prevent fraud, and he will make rules with regard to the insertion of the full and proper names of the drawees, the due crossing of cheques, and the adequate checking of the letters and enclosures which may have to accompany the cheques when they are posted. The preceding remarks deal with those portions of the Summarising Balance Sheets. Vouchers for Payments. Issues of Capital. [72 SECRETARIAL PRACTICE accounts of a large trading concern which may be held to reflect upon the work of the secretary in his primary capacity of chief official, and as the focussing point under the directors of the whole of the concerns of his company. There are of course other matters of account in which the fully equipped secretary will be interested, even if the magnitude of his company makes it impracticable for him to take any active part in the book-keeping. These matters of account are those dealing with the company as a legal entity, such as, for example capital and dividend accounts. The secretary of a large company will find that calculating machines are an essential part of office equipment. A company having decided to issue the whole or part of the authorised capital, the necessary board minutes and arrangements for the issue will be made, and it will then be the duty of the secretary to see that the money for the shares is paid into the banking account of the company, and he will first of all collect the amount due from the original subscribers, and when this is paid into the company’s banking accounts, it will, in the ordinary way, be entered in the share cash book. A separate account must be opened at the bankers called Share Capital—Application Account,” and the application forms will be collected day by day from the bank, agreed with the pass book, and entered in detail in a share cash book. If the issue has been over-subscribed, the surplus amount will remain to the credit of the ‘Application Account’ until after allotment, when it will be transferred to the ‘Allotment Account” and credited to the individual subscribers in respect of amounts payable on allotment. As soon as the allotment letters have been posted, an account will be opened at the bank called ‘Share Capital: Allotment Account.’ The amounts received on allotment, and subsequently the amounts received on calls, will ‘be dealt with in the same manner as in the case of amounts received on applications. In dealing with issues of debenture stock, the same methods will apply. In the case of debenture stock, if, as is often the case, the trust deed has not been executed and the security completed before the issue is made, the trustees for stock holders generally insist that moneys received from the subscribers should remain under the control of the trustees until the security has been constituted. In the event of shares being issued at a premium, or of a commission being paid on their issue, or of debentures being issued at a discount or at a premium, the amount of the instalment will vary. In the case of an issue at a discount, where the debentures are terminable and repayable at par, ACCOUNTS [77° if the discount cannot be written off, a sinking fund should be created, built up by annual contributions from revenue of such an amount as shall, by the date of redemption, represent the total amount of discount at which the debentures were originally issued. Commission on issues of shares should be written off at the earliest possible date, as also should shares issued at a discount pursuant to s. 47. [n the case of a premium, if the conditions of the issue provide for the repayment at par of the loan capital in respect of which it was collected, this can be retained on the balance sheet, and in the case of both share and debenture capital, there is no legal obstacle to the amount of cash collected by way of premium being treated as divisible profit, if the articles of the company permit. In practice, however, a cash distribution might involve claims for income-tax and such premiums are more often used for the purpose of a capitalisation of profits and a distribution of bonus shares. Cash resulting from issues of capital should be transferred from time to time from the share capital cash accounts to the current banking account. Should there be any amounts outstanding on account of any call, after the due date fixed for its payment, notice will have to be sent to the shareholders in arrear, and such steps taken as may be necessary to enforce payment, in order that the call account may be fully cleared by the cash received. The upper parts of the call letters are returned to the company by its bankers, who will have given any necessary receipt to the shareholder. They are then checked against the call cash book, and the amounts paid up on the shares posted to the credit of the individual shareholders in the share register. The transfer and other registration fees should be collected mpanster from the registration department at stated intervals by Fees. the accountant, who should satisfy himself that all fees for transfers lodged for registration, probates, letters of administration and other transfers of title have been collected. {t is usual for the board to issue a cheque in favour of the Dividend and bankers for the exact amount of any dividend or debenture Interest interest, with instructions for it to be placed to the credit Payments. of the specific dividend or interest account, and this cheque will be treated through the cash book in the same way as an ordinary payment and charged to dividend or interest, which will in due course be cleared by crediting the warrants, as paid, by a journal entry agreeing with the special pass book. In some companies it is the practice to journalise the Journal whole of the entries in the cash book. The only object Entries. 174 SECRETARIAL PRACTICE Prompt Settlement. Dividend Arrangements. attained by this method of treating the accounts is that every transaction of the company is put through the journal, and nothing is posted into the ledger except from the journal; the ledger then balances; whereas in treating the cash book as its own ledger account, the balance at the debit or credit of the cash account has to be taken into account for the purpose of balancing both sides of the ledger. The first system is practically obsolete in this country, although it is required by law in all countries governed by the Code Napoleon. From the point of view of modern English or American book-keepers, it is understood to entail considerable unnecessary labour without material advantage. While every care has to be exercised to bring into the accounts month by month all the charges corresponding to such month, special care will have to be exercised at the closing of every accountancy period, and it will certainly be within the province of the secretary to assure himself that charges have been made for all commodities or services which may be chargeable by the company, and on the other hand that provision has been made for every liability affecting the period of the accounts. In addition to rent, rates, taxes, salaries and all the ordinary expenses of the business, cognisance must of course be taken of interest accrued in respect of debentures or other securities where the interest is not actually contingent upon the earnings of the company, and therefore not subject to declaration or approval by the shareholders in general meeting. The duties devolving upon the registrar (in some companies on the accountant) in connection with the preparation of dividend warrants should also be within the purview of the up-to-date secretary. In anticipation of the declaration of a dividend or the payment of interest upon debenture stock there will naturally oe prepared whatever number of dividend sheets may be required, in the form approved by the secretary and the board. The warrants will be stamped and numbered, with a view to having everything in readiness to start writing them out immediately any of the dividend sheets are completed. Secretaries of large companies will find that the work of preparing dividend sheets and warrants is minimised by the nse of loose-leaf registers, addressing machines and calculating machines. The accountant or registrar will carefully check the warrants with the sheets and will then pass them on to the secretary or his authorised deputy for signature. It is now generally considered that the signature or initial of the accountant or registrar as having examined the warrant are sufficient fully ACCOUNTS 173 to protect the interests of the company, the board confining itself to issuing a cheque on the current banking account for the total amount of the warrants, as stated. This is paid into a special dividend account with the bank, accompanied by an order of authority for the acceptance of the secretary’s signature and/or accountant’s or registrar’s initials on all warrants presented against such an account. Finally, all warrants are carefully examined to see that none are unsigned or missing, and enclosed in envelopes which have been in the meantime prepared, unless window envelopes are utilised, which is now very usual. They are then counted, checked and agreed with the total number to be issued and, all being in order, they are posted on the day fixed by the board. With many companies, an adhesive or impressed stamp, is used for the envelopes, and in this case the counting and checking of the warrants must be performed by one or more responsible clerks, who must personally take them to the post, and sign a certificate at the foot of the dividend sheets to the effect that the number of warrants as therein referred to were posted by them at a particular post office at a certain time on the day fixed. Where, however, as is the case with large companies, the company pays the postage in one sum and collects a definite receipt from the Post Office for so many addressed envelopes, this forms the company’s certificate for having posted the number stated. Some large companies use a machine which encloses and stamps at one operation: each ‘franking’ (or stamping) is noted numerically in an attached recording apparatus sealed and under the control of the postal authorities. Application should be made to the bankers for paid dividend warrants. After being checked off against the pass book they should be put in numerical order and marked off on the dividend sheets. In cases where a large number of warrants are paid to the same bank for account of various shareholders, it is the custom, with some companies only to fill in the advice note and income tax certificate, the warrant itself being detached and cancelled. Special lists are then made, and one warrant only is prepared for the total amount in accordance with each of such lists and despatched to the bank a few days prior to the general posting together with the list and the advice notes. Applications may be received from time to time from shareholders notifying the company that they have not received their dividend or interest warrants, or that these, having been received, have been lost or destroved. The 176 SECRETARIAL PRACTICE Miscellaneous. first thing to do is to stop the payment of the warrant at the bankers of the company. After instituting due enquiries with a view to satisfying the board that the warrant has not been passed through the company’s account, and that the statement made by the shareholder is, so far as can be ascertained, correct, a form of indemnity is sent to the shareholder, and upon this being signed, a duplicate warrant is issued, the indemnity of course being carefully preserved. [f the warrant is for a sum less than £5 no stamp is necessary on the indemnity, but if for a sum of £5 or more the indemnity must be signed across a sixpenny stamp (see Form 32). There are other aspects of the accountant’s work of which the modern secretary who wants to be really abreast of his work should have at least some knowledge. These include the law and custom in regard to cheques and negotiable instruments, and also that relating to income tax, and sur-tax, sur-tax having been substituted for super-tax for the year 1929-30 and subsequent years by the Finance Act, 1927. Another subject of which the secretary should have some knowledge is the method of collecting debts due to his company, either by the ordinary methods of business, or by legal process, and he will probably find it distinctly advisable to provide that his office organisation includes an adequate system for obtaining full information, through trade or banking channels, or through credit enquiry agencies, with regard to the credit and standing of actual or prospective customers or clients. As the officer responsible for obtaining the authority of the board where necessary, the secretary should take particular care to see that every accounting transaction which does not come within the ordinary routine of his company’s business is covered by a duly recorded minute of the board. Appropriations to or from reserve or depreciation funds, the purchase or sale of investments, the writing off of bad debts, and various other transactions not of an ordinary character which are certain to arise in the history of any company, should all be authorised by the minutes of the board. It is the usual practice now for auditors to require minutes on such points as these to be produced for their inspection, but whether asked for or not they should be in the minute book. The record contained in the minute book, duly confirmed by the chairman’s signature, is a protection not only. for himself but also for the staff working under him, and the secretary owes a duty to himself and his staff as well as to his board of directors. CHAPTER XVI BALANCE SHEET AND AUDIT PRIOR to the passing of the Companies Act, 1928, the Statutes imposed obligations as to audit, but contained few provisions as to the contents of a balance sheet, and the only reference to the forms of the accounts was to be found in Article 103, Table A, the adoption of which was not obligatory. The Companies Act, 1928, contained specific provisions dealing with both accounts and balance sheet, and these provisions have been repeated in the Act of 1929. The provisions as to accounts are contained in s. 122, to which reference has been made on p. 166. The provisions as to profit and loss account and balance sheet are mainly contained in ss. 123 to 130; but reference must also be made to ss. 44, 45, 46, 47, 54 and 75. The directors must once a year lay before the company in general meeting a profit and loss account and a balance sheet made up to the same date as the profit and loss account. The general meeting to consider the first profit and loss account and balance sheet must be held within eighteen months of the incorporation of the company. Each account must be made up to a date not more than nine months earlier than the date fixed for the meeting at which it is to be considered or in the case of a company having interests abroad not more than twelve months earlier. The Board of Trade has, however, power to extend any of the above-mentioned periods. In the case of a company not trading for profit an income and expenditure account will take the place of the profit and loss account (s. 123). The obligations imposed by this section apply to all companies, whether public or private, and whether or not they have a share capital. Every balance sheet must: (i) Contain a summary of the authorised share capital and of the issued share capital of the company, its liabilities and assets together with such particulars as are necessary to disclose the general nature of such liabilities and assets and to distinguish between the amounts respectively of the fixed assets and the floating assets. Profit and Loss Account and Balance Sheet. Contents of Balance Sheet. 2 i i SECRETARIAL PRACTICE stating how the values of the fixed assets have been arrived at (e.g. ‘at cost’) [s. 124 (1)]. The Act contains no definition of ‘fixed assets’ or ‘floating assets,” and it is difficult to lay down that any particular asset necessarily falls into either class as an asset may be fixed or floating, having regard to the nature of the company’s business, but in many cases the dividing line will be the same as that between ‘fixed capital’ - and ‘circulating capital,” as to which see below p. 189, and Ammonia Soda Co. v. Chamberlain (1918) 1 Ch. 266 especially at pp. 274, 286, 297. If there is a doubt whether any particular asset is fixed or floating the method of valuation should be given. If the company has issued redeemable preference shares, the balance sheet must specify what part of the issued capital consists of such shares and the date on or before which the same are or are to be liable to be redeemed {s. 46 (2)]. 11) Show under separate headings, so far as not written off (a) the preliminary expenses of the company; (b) any expenses incurred in connection with the issue of shares or debentures; (c¢) if ascertainable from any of the sources indicated in the section, the amount of the goodwill and of any patents and trade marks [s. 124 (2)]; (4d) any underwriting commission paid or allowed [s. 44 (1)]; (¢) any discount allowed on the issue of shares [s. 47 (3)]. Show as a separate item any outstanding loans made in connection with the purchase by any person of shares in the company under the authority of provisos (b) or (c) tos. 45 (1) [s. 45 (2)1. If any liability of the company is secured otherwise than by operation of law on any assets of the company, state that such liability is so secured (but the assets comprised in the security need not be specified) [s. 124 (3). (v) If the company has power to re-issue any debentures which have been redeemed, contain particulars of such debentures [s. 75 (3)]-(vi) If any of the assets of the company consist of shares in or amounts owing by a subsidiary company as defined by s. 127 (see infra. p. 180), show as a separate item the aggregate amount of such assets, distinguishing shares and indebtedness (s. 125). (iv) BALANCE SHEET AND AUDIT 17Q (vii) If any of the liabilities of the company consist of indebtedness to a subsidiary company, show as a separate item the aggregate amount of such indebtedness (s. 125). The accounts submitted to the meeting must also 1) If interest has in any year been paid out of capital under s. 54, show the share capital on which and the rate at which interest has been so paid [s. 54 (1) (g)]. Contain particulars of any loans made either by the company or any other person under a guarantee from or on a security provided by the company to any director or officer of the company during the period covered by the account (whether repaid or not) and particulars of any such loans made before the commencement of the period covered by the account and outstanding at the expiration of such period [s. 128 (1) (a) (6)]. Particulars need not, however, be given of loans made in the ordinary course of business by a company whose ordinary business includes the lending of money or of a loan to any employee if the loan does not exceed £2000 and is certified by the directors to have been made in accordance with the usual practice of the company as regards loans to employees. It is thought that a director would not be an employee within this exception [s. 128 (2)]. State the total remuneration paid to or receivable by the directors as remuneration for their services from the company or any of its subsidiary companies excluding managing directors’ remuneration and any remuneration paid to any other director, not as director, but in respect of some other salaried office or employment in the company held by him [s. 128 (1) 'c) and (3)]. 3) As to the meaning of remuneration see s. 128 (5). Where the Act requires information to be included in the accounts submitted to the annual meeting, but doesnot expressly provide that it shall be given in the balance sheet, the question arises whether it must be included in the accounts circulated among the members pursuant to s. 130. It has been suggested that it is sufficient if the information is included in the full accounts to be laid before the meeting; but it is thqught that is not enough, at any rate so far as the information refers to items included in the balance sheet; for the information (see s. 128), has to be included in the accounts ‘to be laid before every 180 SECRETARIAL PRACTICE company in general meeting,” which includes the balance sheet, a copy of which must be circulated. It is, however, probable that where the information is only as to matters appearing in the profit and loss account, it could properly be included in that account which there is no statutory obligation to circulate. Documents The following documents must be annexed, and in the case 0 10 ok to of items (1) and (2) below attached to every balance sheet. Pale (x) A report by the directors as to the state of the comeet. pany’s affairs, the amount, if any, which they recommend should be paid by way of dividend, and the amount if any which they propose to carry to any reserve, specifically shown in the balance sheet [s. 123 (2)]-The Auditors’ report, which must be read to the general meeting and be open to inspection by any member fs. 129 (1)]. If the company holds shares either directly or through a nominee in any subsidiary company or companies, a statement signed by the persons who sign the balance sheet and containing the particulars required by section 126 as to how the profits and losses of the subsidiary company or companies for the period referred to in s. 126 (3), have been dealt with in or for the purposes of the accounts of the holding company. If the Auditor’s report on the balance sheet of any subsidiary company is qualified in any way, the statement required by s. 126 must contain particulars of the manner in which such report is qualified [s. 126 (2)]. If for any reason the Directors of the holding company are unable to obtain such information as is necessary for the preparation of the statement aforesaid, the Directors who sign the balance sheet shall sign a report to that effect which must be annexed to the balance sheet in lieu of the statement [s. 126 (4)]. The Directors and not the Auditors appear to be responsible for the statement required by s. 126 (2). The meaning of subsidiary company is defined in s. 127. Stated shortly, the relationship of holding company and subsidiary company is constituted if the former company, holding directly or through a nominee shares in the latter company, (1) holds fifty per cent of the issued share capital of the latter company, or (2) is entitled to more than fifty per cent. of the voting power in the latter company, or (3) has BALANCE SHEET AND AUDIT 181 power (otherwise than under a debenture trust deed) to appoint the majority of the directors of the latter company. [f the ordinary business of the former company includes the lending of money, shares in the latter company held by the former company as security only are not taken into account in determining whether the latter company is a subsidiary of the former company. A company may be a subsidiary company though it is not a ‘company’ within the meaning of the Act, e.g. a statutory company or a foreign company may be a subsidiary company within the meaning of the Act. Every balance sheet (not being the balance sheet of a Signing and banking company) must be signed by two directors, or if the Circulation company has only one director by that director [s. 129 (1)]. As x coalance to the balance sheet of a banking company see s. 129 (2), and ’ as to the statement required of banking companies, certain assurance companies and deposit, provident or benefit societies see s. 131. [n the case of a public company a copy of the balance sheet together with every document required by law to be annexed thereto and a copy of the Auditors’ report must be sent to every person entitled to receive notice of the meeting not less than seven days before the holding of the meeting to consider such balance sheet [s. 130 (1) (4)], and any member, whether entitled to receive notice of the meeting or not, and any holder of debentures or debenture stock is entitled on demand without charge to a copy of such balance sheet and documents {s. 130 (1) (b)]. In the case of a private company the balance sheet and documents need not be circulated, and copies thereof need only be supplied to members and to them only upon payment of not exceeding sixpence for every hundred words as provided by s. 130 (2). Foreign companies to which Part XI of the Act applies ‘see Chapter XXV) must make out and file with the Registrar a balance sheet in the same form and including the same documents as a company within the meaning of the Act; and if the balance sheet is not in the English language a certified translation must be attached thereto [s. 347]. The appointment, remuneration and duties of auditors are Auditors. defined by s. 132 and 134. The first auditors of a company may be appointed by the Appointment directors at any time before the first annual general meeting, of Auditors. and will then hold office until that meeting unless the company at a general meeting of which notice has been served on the auditors in the same manner as on members of the company removes such auditors and appoints others in their place. 1° Foreign Companies. 182 SECRETARIAL PRACTICE the directors fail to exercise their powers of appointing the first auditors the company in general meeting may do so [s. 132 (4)]. It is clear that ‘the first annual general meeting’ just mentioned is not the same as the statutory meeting. Whether auditors have or have not been previously appointed as above, a company is bound to appoint an auditor or auditors at each annual general meeting, to hold office until the next annual general meeting [s. 132 (1)]. Failing any such appointment being made at any annual general meeting, any member of the company may apply to the Board of Trade, who may appoint an auditor for the current year [s. 132 (2)]. The following persons are disqualified from appointment as auditor (1) any director or officer of the company, (2) any body corporate, (3) except in the case of a private company, any person who is a partner of or in the employment of any officer of the company. A body corporate acting under an appointment made before the 3rd August, 1928, may however complete his duties under such appointment [s. 133]. If the directors or the company have previously appointed the first auditors, their names and addresses must appear in any prospectus issued on the formation of the company [s. 35 and the fourth schedule] or in the statement in lieu of prospectus [s. 40 and the fifth schedule]. And if before the statutory meeting the directors or the company have appointed the first auditors, their names and addresses must appear in the statutory report, and they must certify it so far as it relates to the shares allotted, to the cash received in respect of such shares, and to the receipts and payments of the company on capital account [s. 113). If there are no auditors, the directors’ certificate of the statutory report [s. 113 (3)] must suffice. The balance sheet, which is required by s. 110 to be included in the Annual Return, must have been audited by the company’s auditors. As regards the appointment at an annual general meeting of new auditors in the place of existing auditors, this is provided for by s. 132 (3), the effect of which may be stated as follows: Retiring auditors may be re-elected at the annual meeting, without previous notice of intention to nominate them. Other auditors may be elected at the meeting, subject to the condition that a member must have given notice to the companv not less than fourteen davs BALANCE SHEET AND AUDIT 18; 3 before the meeting, of intention to nominate. It is then the duty of the company to send a copy of the notice to the retiring auditor, and notify the members, either by advertisement or in any other manner allowed by the articles, not less than seven days before the meeting. But if, after the shareholder’s notice has been given, a meeting is called for a date fourteen days or less after the notice has been given, the shareholder's notice is to be deemed good, and the notice by the company may be sent or given at the same time as the notice of the meeting. These provisions are intended to protect, and will protect, a retiring auditor. He will know when his re-election is to be opposed, since a proposal to appoint another auditor in his place cannot be sprung upon him and the shareholders at the general meeting without notice. Apparently, even if the directors omit to give notice, either to the retiring auditor or to the members, of the nomination of the new auditor (and there is no penalty for the neglect), he, as well as the retiring auditor, will still be eligible for election. Casual vacancies in the office of auditor may be filled by the directors, but during the continuance of the vacancy the surviving or continuing auditor or auditors (if any) may act s. 132 (5)]. As regards the remuneration of auditors, where the Board of Trade appoints, it may also fix the remuneration; where the company in general meeting appoints, it fixes the remunaration; and where the directors appoint, .e. before the first annual general meeting, or to fill a casual vacancy, they fix ii s. 132 (6)]. The rights and duties of auditors are set out in s. 134 of the Rights and Act, and are as follows: Duties of . . Auditors. 1° The auditors shall make a report to the members on the accounts examined by them, and on every balance sheet laid before the company in general meeting during their tenure of office, anc renort shall state— ‘a) whether or not they have obtained all the informa tion and explanations they have required; and whether, in their opinion, the balance sheet referred to in the report is properly drawn up so as to exhibit a true and correct view of the state of the company’s affairs according to the best 5) SECRETARIAL PRACTICE of their information and the explanations given to them, and as shown by the books of the company. Every auditor of a company shall have a right of access at all times to the books and accounts and vouchers of the company, and shall be entitled to require from the directors and officers of the company such information and explanation as may be necessary for the performance of the duties of the auditors. Theauditors of a company shall be entitled to attend any general meeting of the company at which any accounts which have been examined or reported on by them are to be laid before the company and to make any statement or explanation they desire with respect to the accounts. (2) 3) The last provision was introduced by the Companies Act, 1928. It would seem that the auditors cannot use the power conferred on them by this provision to make good their own errors or omissions except perhaps as regards very minor matters. The above imposes upon the directors and officers of the company, including- the secretary, correlative duties, which are (a) to produce at all times to the auditors the books (i.e., not merely books of account, but also minute books, &c.), accounts, and vouchers of the company; and (b) to give at all times to the auditors such information and explanation as may be necessary to enable them to perform their duties. The headnote to the case of Republic of Bolivia Exploration Syndicate (1914), I Ch. 439 thus usefully summarises some of the main duties and responsibilities of auditors: ‘Auditors are bound to know or make themselves acquainted with their duties under the company’s articles and under the Companies’ Acts for the time being in force, and if the audited balance sheets do not show the true financial condition of the company, and damage is thereby occasioned, the onus is on the auditors to show that this damage is not the result of any breach of duty on their part. Auditors are primd facie responsible for ultra vires payments made on the faith of their balance sheet, but whether and to what extent they are responsible for not discovering and calling attention to the illegality of payments made prior to the audit must depend on the special circumstances of each case.’ Any regulations, precluding auditors from availing themselves of all the information to which thev are entitled under BALANCE SHEET AND AUDIT 185 the Act, are ultra vires and invalid [Newton v. Birmingham Small Arms Co. (1906), 2 Ch. 378]. It has been held, howaver, that auditors cannot insist upon their statutory rights in all circumstances: for instance, the Court will not force them upon a company which does not require their services [Cuff v. London & County Land Co. (1912), 1 Ch. 440]. The effect of the indemnity clause which before the new Act was commonly inserted in a company’s articles of association exempting auditors from liability for acts or omissions not due to their wilful neglect or default, was considered in ze City Equitable Fire Insurance Co., Ltd. (1925), 1 Ch. 407, but the provisions of such a clause are now almost entirely avoided for the future by s. 152 of the Act of 1929. The Court has, however, power to relieve an auditor, who has acted honestly, and reasonably, and ought fairly to be excused from liability for any negligence or breach of duty (¢ 72) CHAPTER XVII DIVIDENDS Payment of Interest out of Capital. Payment of Dividends T'HE payment of a dividend is a distribution, intended to be made periodically by a company among its shareholders, of its net revenue or profits. No dividend can be paid out of capital, except in the special circumstances mentioned in s. 54 of the Act, and subject to the provisions of the section. The section extends to companies incorporated under the Companies Acts the powers usually granted by private Acts of Parliament to statutory undertakings, e.g. railway companies, of paying out of capital interest on paid-up capital during the unprofitable period of construction of works. The section only permits interest to be paid on shares which are issued to provide money for the construction of works or buildings, or the provision of plant, ‘which cannot be made profitable for a lengthened period.” It seems likely that the Courts will not be troubled with decisions as to what constitutes ‘a lengthened period’ in each case, seeing that the previous sanction of the Board of Trade is required to any such payment of interest as the section allows. So far as the company is concerned, all that it can do is to take care (1) that the shares are issued solely for the purpose of defraying expenses of the kind specified; (2) that the articles are, if necessary, altered, or a special resolution passed, to authorise the payment; (3) to apply to the Board of Trade for its sanction. If the Board of Trade grants its sanction, the company (1) may charge such payments to capital as part of the cost of construction; (2) must show in its accounts, from time to time, the capital on which, and the rate at which, interest has been paid during the period covered bv the accounts. The Board of Trade determines the period for which interest may be paid, which must never extend beyond the end of the half-year next after the half-year in which the works, &c., are completed. No higher rate than 4 per cent. or such other rate as may for the time being be prescribed by Order in Council, can in any circumstances be paid. An Order in Council of 17 December, 1929, prescribes that the rate ‘shall in no case exceed 6 per cent. per annum.’ The power to declare a dividend can be vested by the articles in the directors absolutely, but is usually vested R6 DIVIDENDS [i either in the directors with the sanction of a general meeting, or in a general meeting of shareholders. Where the power is vested in a general meeting, it is commonly provided that no dividend shall be declared exceeding in amount that recommended by the directors. The directors are generally authorised by the articles to pay to the members such interim dividends as the profits of the company appear to them to justify. ALL dividends must be paid in cash, unless the articles authorise some other form of payment [Wood v. Odessa Waterworks Co. (1888), 42 Ch. D. 636]. Unless the regulations otherwise provide, dividends are payable in proportion to the nominal amount of share capital held by each shareholder, irrespective of the amount paid up. For example, A has ten £1 shares with 5s. paid up on each, B has ten £1 shares with 10s. paid up on each; a 10 per cent. dividend is declared; both A and B receive £1. [Oakbank Oil Co. v. Crum (1883), 8 A.C. 65; re Bridgewater Navigation Co. (1889), 14 A.C. 525]. The regulations of a company usually, however, provide for the payment of dividends in proportion to the amount of capital paid up by each shareholder, as permitted by s. 48 of the Act. Dividends must be paid in accordance with the rights of the shareholders as fixed by the memorandum or articles of association. Thus the capital of a company may be divided into shares of different classes, e.g. preference and ordinary shares, and dividends must be paid accordingly. As tc cumulative dividends see Chapter V. All dividends become due immediately they are declared, and they are treated for all purposes as a debt due from the company to the shareholders [Severn Railway Co. (1896), 1 Ch. 559], except that under most articles they do not bear interest against the company and that in a winding up they do not rank as debts in case of competition between a member and a creditor who is not a member [s. 157 (1) (g)]. Even if a dividend is declared payable in instalments the right to receive the whole dividend vests in the members immediately and a transfer of shares after such declaration does not pass the right to instalments subsequently pavable (re Kidner' Agreement (1929) 2 Ch. 121]. A dividend due will become barred by the Statute of Limitations if not claimed within twenty years from the date of declaration [Artisans Land Corporation (1904), 1 Ch. 796]. The length of time within which a dividend can be claimed is often provided for in the regulations of the company, the number of years varving in different companies. It is thought 88 SECRETARIAL PRACTICE that there is no illegality in providing in articles that dividends unclaimed for a specified time will be forfeited, though one learned text-writer (see Palmer's Company Precedents, Vol 1, 13th edition, p. 754) suggests that such a provision is of doubtful validity. In any event the Committee of the Stock Exchange object to any such provision (see Appendix D), and consequently if an Official Quotation is desired it should not be inserted. Out of what A form of resolution to pay a dividend is given in Chapter Moneys XIV. Payable. As stated above, the fundamental rule with regard to the payment of dividends is that no dividends shall be paid out of capital; a payment of dividend out of capital is an ultra vires act on the part of the company, and constitutes a breach of trust by the directors, and renders them liable to make good to the company any amount so paid [Oxford Building Society (1887), 35 Ch.D. 502; Flitcroft’s Case (1882), 21 Ch. D. 519; Masonic Assurance Co. v. Sharpe (1892), [ Ch. 154]. No such payment can be made, even though the memorandum [Verner v. General and Commercial Trust (1894), 2 Ch. 239], or articles [Trevor v. Whitworth (1887), 12 A.C. 409; Masonic Assurance Co. v. Sharpe (see above)], or a general meeting [Flitcroft’s Case (see above)] purport to authorise it. But although no dividend can be paid out of capital, yet a dividend can be paid out of moneys which are certainly not ‘net profits.’ A difficulty has been felt in drawing the line between capital and net profits, chiefly arising from the various methods in which depreciation or loss of assets may be dealt with. The Companies Acts have not required any uniform system of book-keeping, and consequently it happens that companies deal with depreciation or loss in many different ways: some provide out of revenue for depreciation or loss as it arises; others only partially, or not at all. Given the same amount of depreciation or loss and the same revenue, the net profits may apparently be increased or reduced according to the method employed in dealing with depreciation or loss. [See Spanish Prospecting Co. (1911), 1 Ch. 92, as to the meaning of profits]. The question then arises whether dividends can be paid out of the revenue, or only out of the net profits after taking from revenue such amount as may be necessary to keep. the capital intact, The answer depends upon the constitution and objects of each company [Davison v. Gillies (1879), 16 Ch. D. 347 (n); Dent v. London Tramways Co. (1880), DIVIDENDS 18, 16 Ch. D. 344; Lambert v. Neuchatel Asphalte Co. (1882), 51 L.J. Ch. 882], and varies with the class of business carried on. The question whether a company has profits available for distribution must be answered according to the circumstances of each particular case, the nature of the company, and the evidence of competent witnesses [Bond v. Barrow Hematite Co. (1902), I Ch. 353]. The following are some general principles extracted from the more important cases on the subject: 1. The ‘fixed capital’ of a company need not be maintained Fixed and out of revenue, but the ‘circulating capital’ must be made Piroildimg . 2 : pital. good before dividends are paid. Fixed capital is used to denote that portion of the company’s assets which consists of investments of a more or less permanent form, such as land, buildings, plant, or securities purchased for the sake of the income they produce. Circulating capital, on the other hand, consists of that portion of the company’s assets which is used for ‘turnover’ purposes. Incidentally it may be income-bearing while retained, e.g. shares in a dividend-paying mine bought as a speculation, but intended to be used as stock-in-trade, and to bring profit to the company by being sold [Verner v. General and Commercial Trust (1894), 2 Ch. 239]. For a judicial explanation of the nature of fixed and floating capital, see Ammonia Soda Co. v. Chamberlain (1018), r Ch. 266, per Swinfen Eady, L.J., at pp. 286, 287. 2. If the objects of a company include the investment of capital in wasting property, depreciation by waste need not necessarily appear in the revenue account, but may, if the regulations so provide, be dealt with in the capital account “Lee v. Neuchatel Asphalte Co. (1889), 41 Ch. D. 1]. Where a company’s business is to acquire a wasting property, e.g. a coal mine under a lease for years, and making a profit by working it, the diminution of the property is a gradual consumption of the capital, and it is for the shareholders to decide whether they will have a sinking fund to meet the waste [Verner v. General and Commercial Trust 1894), 2 Ch. 239]. 3. A company may set off an appreciation in the value of its capital assets, as ascertained bv a bond fide valuation, against losses on revenue account [Ammonia Soda Co. v. Chamberlain (1918), 1 Ch. 266]. Commercially, however, the greatest caution should be exercised in distributing dividends on the basis of a valuation showing an appreciation. [n particular the valuation should have been obtained from 190 SECRETARIAL PRACTICE Reserve. Capital Redemption Reserve. Capitalisation of Profits. a competent expert, and it would be unsafe to act on the valuation unless the valuer certified that the appreciation could reasonably be regarded as permanent. 4. If the capital account is in credit, the credit balance, when realised, may be used for the payment of dividends, if the constitution of the company allows it, since there is nothing in the statute to prevent it, and there is no obligation to retain realized appreciation of the capital [Lubbock v. British Bank of South America (1892), 2 Ch. 198]. The articles of a company usually contain a clause empowering the directors, before recommending any dividend, to set aside out of the profits of the company such sum as they think proper as a reserve fund to meet contingencies, or for equalising dividends, or for any other proper purpose (see e.g. Table A, cl. 93). And even without such provision, a reserve fund may be formed, if the shareholders approve, and may be invested in such securities as the directors may select, subject to the control of a general meeting [Burland v. Earle (1902), A.C. 83]. Power is often given to use the reserve fund in the business of the company; if not so used it may be invested in the shares of securities of other companies. but not in the shares of the company to which it belongs. Where the memorandum of a company provides that the profits available for dividend shall be distributed as directed, and the articles contain a clause similar to the above, a reserve fund may be created, if the directors think fit, before any distribution of dividend [Fisher v. Black and White (1901), 1 Ch. 174]. But if the memorandum is so framed as to give the holders of any particular class of shares a right to insist on the application of profits in paying dividends on such shares before any part of such profits is carried to reserve, that right will be enforced [Evling v. Israel & Oppenheimer, Ltd. (1918), 1 Ch. 102]. If the fund is accumulated out of profits, it can be treated as undivided profits, and dividends can be paid thereout. [t retains its character of undivided profits until effective steps are taken to capitalise it. If a company issues redeemable preference shares and redeems them out of profits, a special Capital Redemption Reserve Fund must be created see s. 46 and supra p. 39). It is often desired to distribute a bonus out of reserve, satisfying it by the issue of ‘fully paid shares. In such a case it becomes necessary to capitalise such portion of the reserve as is required for the purpose, thereby divesting it of its character of undivided profits. In order that a company may properly carry out a scheme of this kind. it may, DIVIDENDS IQT and probably will, be necessary to make certain alterations in its articles of association. The reserve fund article must authorise the payment out of the reserve fund of a special dividend or bonus; and, further, there must be a power to satisfy a dividend or bonus by the issue of fully or partly paid shares. For, as has been stated above, dividends can only be paid in cash, unless some other form of satisfaction is authorised by the articles. The article which enables the company to satisfy the bonus by the allotment of fully paid shares will authorise the company, by resolution in general meeting, to capitalise any part of the undivided profits and to distribute the same as a bonus, power being given to the directors to make provision as to fractions. The Capital Redemption Reserve Fund may be used for paying up and issuing fully paid bonus shares in the event and to the extent specified in s. 46 (5) (see supra p. 39). The articles having been altered if and so far as is necessary, and the capital of the company, if necessary, increased, the resolution to capitalise will be passed, and the matter in due course carried out. If the article is so framed that it is necessary expressly to declare a bonus, the bonus will be made payable free of income tax. This can be done as the company will have already paid income tax on the profits used for the purpose of the bonus if they are taxable, while if they represent capital appreciation or premiums received on the issue of shares, they will not, at any rate, unless distributed in cash, be liable for income tax. The article is, however, often framed in such terms that the resolution need not expressly declare a bonus. For an example of such an article, see Palmer's Company Precedents, 13th edition, Vol I, p. 750. Bonus shares so issued are issued for a consideration other than cash, and therefore, on making the return as to allotments (see s. 42), a contract or contracts constituting the title of the allottees to the shares must be filed. In cases where the issued shares of a company are not fully paid, a dividend can be declared out of the undivided profits, and a call made on the shares, payable on the same date. The shares thus become fully paid and profits to the extent of the unpaid liability capitalised. It would, however, be better, in order to avoid any claim for income tax, to proceed ander an appropriate article authorising the application of reserve fund or other undistributed profits in paying ur partly paid shares. On the declaration of a dividend, warrants must be prepared. In practice it is usually possible to prepare and fill in all warrants and have them ready for despatch before Dividend Warrants. 192 SECRETARIAL PRACTICE the general meeting at which the dividend is formally declared. They can then be posted after the meeting. In the case of large companies the use of machines greatly facilitates the work of preparing the warrants. But if there is any likelihood of the company in general meeting declaring a dividend less in amount than that recommended by the directors, this cannot, of course, be done. The resolution of the meeting is, however, in almost all cases merely a formal sanctioning of the previous recommendation of the board. The methods of the preparation and despatch of dividend warrants and the arrangements for their payment are dealt with fully in Chapter XV. Forms of Dividend Warrant will be found in Appendix F (Forms 33 and 34), and also a form of Dividend Request by a shareholder, requiring the company to pay dividends in a particular way (Form 35). A similar form, attached to a request by the company for a specimen signature, which request is often sent out with share or stock certificates in the case of new holdings, is also given (Form 36). When forms of Dividend Request are received by the company, they must be carefully preserved. At the same time as the dividend warrants are sent out, a cheque should be sent to the company’s bankers to cover the total amount to be disbursed by the bank. In the case of coupons, arrangements may be made for their presentation and payment at the company’s bank, or, if thought fit, at the registered office of the company. The articles of a company commonly provide that divie dends may be sent through the post. As regards joint holders, it is usually provided that the warrants shall, unless otherwise directed (i.e. by a Dividend Request), be sent to the registered address of the one whose name stands first on the register in respect of the joint holding, and that any one joint holder may give effectual receipts for dividends. In the event of a dividend warrant being lost or mislaid, a fresh one should not be issued without a satisfactory indemnity. A form of Indemnity and Request for a Duplicate Dividend Warrant is given in Form 32. Except in cases where the amount of the dividend is very large, this indemnity will probably be considered sufficient, but the guarantee of a third party in addition may occasionally be required. The payment of dividends to a shareholder may be prevented by notice in lieu of distringas. As to dividends to infants see p. 106. LATTED CRT ~ AGes, DEBENTURES AND RECEIVERS PRACTICALLY all companies have an express power to borrow, which is conferred by the memorandum of association, and in almost all cases this express power to borrow is coupled with a power to give security for the loan upon the company’s property. A trading company, however, has in general an implied power to borrow [General Auction Co. v. Smith (1891), 3 Ch. 432]. And where a company has power to borrow, it can, unless forbidden by its articles, give security, e.g. by mortgaging its property [Patent File Co. (1870), 6 Ch. App. 83]. The express power to borrow, which most companies possess, generally includes the power to ‘raise’ money. The use of the word ‘raise’ is not meaningless, since a power to borrow money merely, without power also to raise money, does not enable a company to issue irredeemable debentures, which are really a perpetual annuity [Southern Brazilian Railway Co. (1905), 2 Ch. 78]. The power to borrow may be exercised by the directors, if the articles expressly or impliedly authorise them to exercise it. Sometimes the exercise of the power is placed in the hands of the company in general meeting, but this is frequently inconvenient. It may be, for example, that a temporary overdraft is required, and it would, if the power to borrow were exerciseable only by the company, be necessary to convene a general meeting before the transaction could be carried out. The usual plan, however, is for the directors to be authorised to exercise the borrowing powers of the company up to a certain limit which must not be exceeded without the sanction of the company in general meeting. If permission to deal is to be obtained from the Stock Exchange, the articles must limit the borrowing powers of the Board. The limit may be the amount of the nominal capital of the company, or the amount of the issued capital of the company for the tiine being, or any other reasonable sum. Where by the articles the amount borrowed may not exceed the preference Borrowing Powers. 104 SECRETARIAL PRACTICE share capital, and no preference shares have been issued, the restriction does not apply until preference share capital exists [ Johnston Foreign Patents (1904), 2 Ch. 234]. We have already seen that, by s. 94 of the Act, a company may not exercise its borrowing powers until it has received a certificate entitling it to commence business, but that a company may nevertheless, before it obtains the certificate, offer shares and debentures simultaneously for public subscription, may allot shares and debentures, and may receive money payable on application for debentures. Where a company has power to borrow and wishes to exercise it, the method usually employed is to issue a debenture or debentures. There is, of course, nothing to prevent a company securing a loan from an individual by a specific mortgage of some or all of its freehold or leasehold property, or from securing an overdraft by the guarantee of its directors or others, or from securing any loan by any method available to an individual. But the common practice is for a company to secure its loans by the issue of debentures. Nature of ‘In my opinion a debenture means a document which Debentures. cjither creates a debt or acknowledges it, and any document which fulfils either of these conditions is a debenture. I cannot find any precise legal definition of the term; it is not either in law or commerce a strictly technical term, or what is called a term of art’ [per Chitty, J., in Levy v. Abercorris Slate Co. (1888), 37 Ch. D. at p. 264]. A debenture is a document, not necessarily under the seal of the company [Lemon v. Austin Friars Investment Trust (1925), 41 T.L.R. 629], acknowledging or creating a liability to pay a sum of money with or without interest thereon at a specified rate. The money may be payable at a fixed date, or on notice, or the debt may be irredeemable or redeemable only on the happening of a contingency, however remote [s. 74]. The debenture may be payable to bearer, in which case it is a negotiable instrument passing by delivery, or it may be registered in the name of the proprietor, the registered holder. The payment of principal and interest need not be secured at all, in which case the debenture amounts to a mere promise to pay; but more commonly the payment is secured by a mortgage or charge on the property of the company. The charge may be created (a) by a trust deed, to the benefit of which the debenture holders are by the words of the debentures declared to be pari passu entitled; or .(b) by the language of the debenture itself. In either case the charge may be: (1) a fixed charge on the property of the company; (2) a floating charge on the property of the MORTGAGES, DEBENTURES AND RECEIVERS 195 company; (3) a fixed charge on some and a floating charge on other parts of the property of the company. In the case of debentures secured by trust deed the specific property which is to be the security is either demised to or charged by way of legal mortgage in favour of trustees upon trusts for the benefit of the debenture holders, and the deed prescribes the terms and conditions on which the security is to be held, and, if need be, enforced, by the trustees. The debentures themselves, by one of the conditions endorsed thereon, declare the holders to be entitled pari passu to the benefit of, and subject to the provisions in, the trust deed, the terms of which are thus incorporated in the debentures. The debentures, even though a specific charge is created by the trust deed, often contain a general charge on the undertaking of the company. The advantages of a trust deed are that a legal mortgage can be created in favour of the trustees, and that they, as representing the whole body of debenture holders, can act more conveniently on their behalf. The trust deed also usually contains provisions for the calling of meetings of the debenture holders at which a specified majority (usually three-fourths) is able by resolution to bind the minority, and such provisions are valid [Follit v. Eddystone Granite Quarries (1892), 3 Ch. 75). Buta majority will not be allowed to exercise its voting power in such a way as to defraud a minority [New York Taxicab Co. (1913), t Ch. 1]. The powers given to the majority should, however, be strictly defined, as the Court will refuse to allow the will of the majority to override that of the minority except in regard to matters definitely provided for in the trust deed, e.g. a power to release the mortgaged premises does not include a power to release the company; a power to modify the rights of the debenture holders does not include a power to relinquish their rights; a power to compromise their rights presupposes some dispute about them, or difficulty in enforcing them, and cannot be exercised where there is no such dispute or difficulty [Mercantile Investment Trust Co. v. International Co. of Mexico (1891), reported in footnote to Sneath v. Valley Gold (1893), 1 Ch. 477)). Moreover, even if the modification is within the express provisions of the deed, the resolution effecting the modification may not be upheld if it is only carried by the vote of a debenture holder with a special interest in s>curing the modification [British American Nickel Corporation v. M. J. O’Brien, Ltd. (1027), * ©. 369; but see Goodfellow v Velson Line (1912), 2 Toor Debentures secured by Trust Deed 196 SECRETARIAL PRACTICE For the Stock Exchange regulations as to trust deeds, see Appendix D. The remedies of the debenture holder depend for the most part on the provisions of the trust deed. The deed generally provides that on default by the company the trustees may enter, sell the property charged, and distribute the proceeds amongst the debenture holders. The trustees may be plaintiffs in an action to enforce the charge, or one debenture holder may generally sue on behalf of the class, in which case the trustees as well as the company are defendants. In the case of debenture stock where the certificate contains no direct covenant with the stockholders, the stockholders cannot enforce the covenant to pay. See Dunderland Iron Ore Co. (1909), 1 Ch. 446, where it was held that such stockholders are not creditors entitled to petition for winding up. Semble, however, they would as beneficiaries be entitled to enforce the provisions of the trust deed against the property. A receiver can be appointed by the Court in proper cases, or by the trustees under the power in the trust deed; a manager can also be appointed where necessary. As to receivers and managers, see pp. 205-208. Debentures In the case of debentures secured without a trust deed the secured security is created solely by a charge contained in the debenny I ture itself, charging the property which is to be the security * with the payment of the mortgage debt. The debenture usually contains conditions providing for enforcing the security. It seems doubtful whether the holder of debentures of this class has the remedies of a mortgagee under the Law of Property Act, 1925 [cf. Blakerv. Herts & Essex Waterworks Co., 41 C.D. 399, a case of a statutory company]. Accordingly the debenture usually provides that if the security becomes enforceable, a majority of the debenture holders may exercise the power of sale and of appointing a receiver (see below) conferred by the Law of Property Act, 1925, s. 101, and that they may enter into possession. A debenture holder may oring an action on behalf of himself and other debenture holders to enforce the security, and the Court may make a declaration of the charge, appoint a receiver and sometimes a manager (see below), direct necessary accounts and inquiries, and order a foreclosure or sale of the mortgaged property. A debenture holder may also bring an action in his own name upon the covenant by the company contained in the debenture to pay the principal and interest. He may also petition the Court to wind up the company. When the principal and interest are in arrear the debenture holder is entitled as between himself and the companv to a winding up order ex debito MORTGAGES, DEBENTURES AND RECEIVERS 197 justitiae, but the Court has discretion to refuse such an order in certain circumstances, e.g. if the petition is opposed by the majority of creditors and the petitioner would derive no substantial benefit from the order [Western of Canada Oil Co., L.R. 17 Eq. 1; Chapel House Colliery Co., 24 C.D. 259]. A fixed charge is usually given upon the immovable property of the company, whilst a floating charge as a rule covers the whole of the undertaking and property, including stock, book debts and cash of the company and all other property not subject to the fixed charge and including also as a rule the uncalled capital of the company. A floating charge leaves the company free to use the property the subject of the charge as it pleases until the charge attaches; that is, it is a charge on the company as a going concern, which will not attach until the company ceases to be a going concern [Governments Stock Co. v. Manila Railway Co. (1897), A.C. 81; re Borax Co. (1901), 1 Ch. 326; [llingworth v. Houldsworth (1904), A.C. 355], or until by the conditions (if any) of the debenture the floating charge attaches. The usual conditions are, if execution or distress is levied against the company, or if the company goes into liquidation or ceases to carry on business. A floating charge does not prevent the company from creating mortgages on the property charged, unless there is a declaration that the company shall not have power to mortgage in priority to the floating charge (Wheatley v. Silkstone Coal Co. (1885), 29 Ch. D. 715; and see Cox-Moore v. Peruvian Corporation (1908), 1 Ch. 604]. Even if there is a declaration that the company has not power to make a mortgage in priority to, or pari passu with a floating charge, this may be defeated by a legal mortgagee of any property subject to the charge other than land who can show that he had no knowledge of any clause in the floating charge preventing him from having the full benefit of his legal mortgage [English and Scottish Investment Co. v. Brunton (1892), 2 Q.B. 700]. As regards land, it is thought that the debenture holder will be protected by registration under s. 79; for such registration is equivalent to registration under the Land Charges Act, 1925 see s. 10 (5) of that Act], and under s. 198 of the Law of Property Act, 1925, a subsequent mortgagee will be deemed to have actual notice of the instrument creating the charge for all purposes. The company has complete power to deal with the property the subject of the floating charge, until the company s wound up or a receiver put in [Governments Stock Co. v. Manila Railway (1897), A.C. 81; Florence Land Co. (1878), to Ch. D 5:71. When a floating charge attaches, the rights of Fixed and Floating Charges. 108 SECRETARIAL PRACTICE Unsecured Debentures. Bearer Debentures. Debenture Stock. the debenture holders are good as against an execution creditor or general creditors of the company [Davey v. Williamson (1898), 2 Q.B. 194]. But by s. 266 of the Act, a floating charge created within six months of the commencement of a winding-up is only good to the extent of the amount then actually advanced to the company, with interest at 5 per cent., unless the company was solvent at the date when the floating charge was given. A floating charge may also, by s. 78, be postponed to preferential creditors. The term ‘naked debentures’ is frequently used to describe debentures which are not secured by any charge. They are simply promises under the seal of the company to pay a certain sum. Being under seal, the debt is a specialty debt, but the holder is merely an unsecured creditor of the company, and he cannot prevent the company, unless it is so provided by the conditions of the debenture, from issuing mortgage debentures which will rank in priority to his claim. The holder may bring an action against the company for the principal and interest due, and, if necessary, issue execution on his judgment ; or he may present a petition for windingup the company, either before or after obtaining judgment; or, if a winding-up is in progress, he may prove for the debt as an ordinary unsecured creditor. Debentures, whether secured by a trust deed, or by a charge, or unsecured, may be payable to the registered holder or to bearer. A debenture to bearer is a negotiable instrument and transferable by delivery, and is so treated by the law merchant [Bechuanaland Exploration Co. V. London Trading Bank (1898), 2 Q.B. 658]. Being a negotiable instrument, a debenture to bearer will pass on delivery free from all equities between the company and the original or intermediate holders, and the delivery by the holder to the company of the debenture and the interest coupons will be a good discharge to the company for the principal and interest respectively. " Debenture stock is a term used to denote the capital sum lent to a company, which is usually secured by a trust deed creating a mortgage or charge in favour of the trustees upon the property forming the security. The trust deed usually provides that each stockholder shall be entitled to a certificate stating the amount of the stock to which he is entitled. The trust deed further provides for a register of holders being kept, and for transfers of the stock in certain fractions, and usually contains provisions for repayment of the stock and for enforcing the charge. The incidents of debenture MORTGAGES, DEBENTURES AND RECEIVERS 19g stock are for practical purposes the same as those of debentures, and the holders of the stock occupy a position very similar to that of the holders of debentures. As to the rights of a debenture stockholder to enforce the security, see above p. 196. The term ‘debenture’ when used in the act ‘includes debenture stock, bonds and any other securities of the company, whether constituting a charge on the assets of the company or not.’ Provisional scrip to bearer is often issued to applicants for Serip, debentures and debenture stock before the instalments are finally paid up, and the debenture itself or the stock certificates issued. The scrip is a negotiable instrument, with the consequence that any person taking it in good faith and for value obtains a title to it, independent of the title of the person from whom he takes it [Goodwin v. Robarts (1876), 1 A.C. 476]. Transfer may be made by delivery. The stamp duty on scrip to bearer is 2d. Debentures giving a charge on the company’s property need not be registered under the Bills of Sale Acts, 1878 and (882 [Standard Manufacturing Co. (1891), 1 Ch. 627]; nor need trust deeds be registered under those Acts [Richards v. Kidderminster Overseers (1896), 2 Ch. 212]. There is, however, an elaborate system of registration of charges (which expression includes mortgages) prescribed by the Act, with which companies must comply. The object of the system is the protection of creditors and persons dealing with the company by compelling publicity of secured loans. The existing system is a double system, for not only must charges be registered with the Registrar, but the company must also itself keep a register of charges. It is unnecessary here to give in detail the relevant provisions of the Act, but the more important features of each of the two branches ¢ registration are summarised. i. The Somerset House Register —This register must contain the following: ‘A) As regards companies registered in England, fi) The statutory particulars of charges registered under 5. 14 of the Companies Act, 1900, on or after January 1st, 1gor. These will include charges of the classes (a). 'b), (c), and (f) set out in (iii), but not (2), (e), (g). (£), and (3)). A statement of the total amount of all the other secured indebtedness of the company as at July 1st, 1908, in respect of mortgages and charges of the first six classes set out in (iii). Registration. Somerset House Register. 200 SECRETARIAL PRACTICE (iii) The statutory particulars of all mortgages and charges created after the fixed date mentioned below being either: @) a charge for the purpose of securing any issue of debentures; or (6) a charge on uncalled share capital of the company; or a charge created or evidenced by an instrument which, if executed by an individual, would require registration as a bill of sale; or (4) a charge on any land, wherever situate, or any interest therein; or (¢) a charge on book debts of the company; or 'f) a floating charge on the undertaking or property of the company; or ‘g) a mortgage or charge on calls made but not paid; or (h) a charge on a ship or any share of a ship; or {1) a charge on goodwill, on a patent or a license under a patent, on a trademark or on a copyright or a license under a copyright [s. 79 (2)]. The fixed date is in relation to charges of the classes (a) to (f) the 1st July, 19o8, and in relation to charges of the classes (g), (#) and (7) the 1st November, 1029. (iv) The statutory particulars of charges on property acquired by a company after the 31st October, 1929, subject to a subsisting charge which, if created by the company, would have required registration under s. 79 [s. 81]. The statutory particulars of charges subsisting on the Ist November, 1929, which if created after that date or if comprising property acquired by a company after that date, would have required to be registered under s. 79 or s. 81 [s. 91]. (B) As regards companies incorporated outside England. but having a place of business in England: (x) The statutory particulars of charges on property in England created by such companies since the 31st October, 1929, which if created by English companies, would have required registration under s. 79 [s. go.] (Vv) MORTGAGES, DEBENTURES AND RECEIVERS 2o1 2) The statutory particulars of charges on property acquired by such companies after the 31st October, 1929, subject to a subsisting charge which, if created by an English company, would have required registration under s. 79 [s. go]. The statutory particulars of charges subsisting on the 1st November, 1929, which, if created after that date, or if comprising property acquired by a company after that, would have required registration ander s. go. [t will be noticed that these provisions apply to companies registered in Ireland or Scotland which have an established place of business in England. [t will be observed that loans secured by a deposit of shares are not included, nor are loans secured by the deposit of acceptances, warrants, or other negotiable instruments. The list of mortgages and charges requiring registration at Somerset House is thus still not complete. Registration under s. 79 must be effected within 21 days after the creation of the charge. To do so, the instrument Jif any) by which the mortgage or charge is created or evidenced or in certain cases a copy thereof [see sub-ss. (3) and (5)], verified as required by Rule 4 of the Companies (Forms) Order, 1929, must be delivered to the Registrar, and in addition certain particulars are required to be furnished. These include (see Companies (Forms) Order, 1929, Form 47) the date and description of the instrument creating or evidencing the mortgage or charge, the amount secured, short particulars of the property charged, and the names, addresses and descriptions of the mortgagees or persons entitled to the charge. Further, the amount or rate of any discount or commission to subscribers for debentures must be given [s. 79 (9)]. In the case of a series of debentures the particulars are in many respects different [s. 79 (8) and Companies (Forms) Order, 1929, Forms 47 and 4: . Under the Act of 1908 there was no obligation to register a charge on property acquired by the company subsisting, prior to the acquisition of the property by the company, and companies registered outside England, did not have to register any charges, but now as appears from the above summary, under s. 81, where a company registered in England acquires any property which is subject to a charge which would, if it had been created by the company after the acquisition of the property have been required to be registered under this part of the Act, the company must cause the prescribed particulars 3) Loans by Deposit of Securities. Time and Mode of Registration. Non-Registration. 202 SECRETARIAL PRACTICE of the charge (see Companies (Forms) Order, 1929, Form 47B), together with a certified copy of the instrument, if any, by which the charge was created or evidenced to be delivered to the registrar of companies within 21 days after completion of the acquisition. In the case of a charge created outside Great Britain on property situated outside Great Britain the period of 21 days runs from the date on which the copy of the instrument could in due course of post, and if posted with due diligence, have been received in the United Kingdom [cf. s. 79 3). Moreover, by s. go, the provisions as to registration extend also to all charges on property in England created, and to all charges on property in England acquired after the commencement of the Act by any company incorporated in Scotland or in any other place outside England if such company has an established place of business in England. The registration of charges created by a company and charges on property acquired by a company before the commencement of the Act which, if the charge had been created or the property had been acquired after the commencement of the Act, would have required to be registered ander s. 79 or s. 81, is secured by s. 91 under which a company must within six months after the commencement of the Act send to the Registrar the prescribed particulars of any such charges which would, having regard to the provision of 5. 79 (2), (g), (h), and (¢), and ss. 81 and go, have required to be registered if the charge had been created, or the property subject to the charge had been acquired. after the commencement of the Act. On registration the Registrar must give a certificate of registration [s. 82 (2)], and a copy of the certificate must be indorsed on every debenture, or certificate of debenture stock, issued after the creation of the charge [s. 83 (1)]. This register is open to the inspection of any person whatsoever on payment of a fee of one shilling for each inspection 's. 82 (3)]. It should be observed that the appointment of a receiver and the fact of his ceasing to act. must also be registered I's. 86]. The effect of non-registration of a charge created by a company registered in England is that the mortgage or charge is void against the liquidator and any creditor of the company, and on its so becoming void (¢.e. at the expiration of the twenty-one days allowed for registration) the money secured is immediately to become pavable (s. 79 (1)]. The MORTGAGES, DEBENTURES AND RECEIVERS 203 effect would apparently be the same if the charge was created by a company registered outside England, but having a place of business in England [s. go]. Charges which only require registration under ss. 81 or 91, or under s. go if the charge subsisted before the property was acquired by the company, would not be void for want of registration, but penalties are imposed for any default in the obligations as to registration [see ss. 80, 81 (2), go and 91 (3)]. The Court may in certain cases extend the time for registration or direct the correction of mistakes (s. 85). 2. The Company's Register—By s. 88 of the Act every limited company must keep a register of chargesat itsregistered office. This register ought to furnish a complete record of all the secured indebtedness of the company, since there are required to be entered therein ‘all charges specifically affecting property of the company and all floating charges on the undertaking or any property of the company, giving in each case a short description of the property charged, the amount of the charge and, except in the case of securities to bearer, the names of the persons entitled thereto.’ In the case of the company’s register, however, the registration of a mortgage or charge is not a condition precedent to its validity [Wright v. Horton (1887), 12 A.C. 371], but the officers of the company are liable to penalties for knowingly authorising the omission of a necessary entry [s. 88 (2)]. Copies of the instruments creating any charge requiring registration at Somerset House must be kept at the registered office of the company, although in the case of a uniform series of debentures, a copy of one debenture will suffice [s. 87]. These copies and the register itself must be open to the inspection of creditors and shareholders gratis, and the register to the inspection of any other person on payment of a fee not exceeding one shilling for each inspection [s. 89 (1)]. The right to inspect includes the right to take copies [Nelson v. Anglo-American Land Co. (1897), 1 Ch. 130]. This decision appears to be based upon the fact that the section contains no provision as to a person being entitled to require copies on payment, and is therefore not in conflict with the decision as to taking copies of the register of members mentioned on p. 99. The company may impose reasonable restrictions as to the time during which inspection will be permitted, but at least two hours a day during business hours must be allowed for inspection. Penalties are imposed for unlawful refusal of inspection and the Court may compel immediate inspection 's. 8g (2). (3) Company’s Register. 204 SECRETARIAL PRACTICE Register of Debentures Holders. Redemption of Debentures. Transfers. Besides the above register, a company may keep a register of debenture holders. The Act does not compel a company to keep a register of debenture holders, but unless the debentures are all payable to bearer a register is in practice necessary. By s. 73 of the Act, the register (if any) must be open to the inspection both of the debenture holders themselves and of shareholders of the company, except when closed in accordance with provisions contained in the articles of the company or in the debentures or debenture stock certificates, or in the trust deed or other document securing the debentures or debenture stock for a period or periods not exceeding thirty days in any year. Inspection must be permitted for at least two hours in every day. A debenture holder or shareholder may require a copy of the register or any part of it on payment of sixpence for every hundred words required to be copied. He may also require a copy of a trust deed which has not been printed on payment at the same rate, or a copy of a printed trust deed on payment of a sum not exceeding one shilling. If inspection or copies are refused the company and its officers are liable to penalties, and the Court may by order compel the company to comply. A register of debentures or debenture stock should be kept substantially in the same style as a share register. See Appendix F, Form 28. Specimens of a Mortgage Debenture Stock Certificate and of a Debenture Stock Certificate will be found in Forms 4 and 5. When a debenture is paid off by the company, a formal receipt should be taken from the debenture holder, releasing the company from all claims in respect of the debenture, which should be surrendered to the company for cancellation. A certificate for debenture stock should similarly be surrendered. A form of Redemption Receipt is also given (Form 37). Although there is no statutory obligation to lodge with the Registrar a memorandum of satisfaction of a mortgage or charge, the Registrar may, on evidence being given to his satisfaction that the debt for which the charge was given has been paid or satisfied, direct the entry on the register of a memorandum of satisfaction [s. 84], and it is clearly to the interest of a company that this should be done. For the appropriate forms, see Companies (Forms) Order, 1929, Form 49. Transfers of registered debentures are effected in the manner provided by the conditions of the debenture, and on registration of the transfer the name and address of the new holder is indorsed on the debenture. MORTGAGES, DEBENTURES AND RECEIVERS 205 It has already been pointed out that amongst the remedies of a debenture holder, when entitled to enforce his security, is the right to appoint, or to apply to the Court to appoint, a receiver. It is common for the conditions of a debenture to provide that, upon the security becoming enforceable, the holder, or, in the case of a series of debentures, the holders of a certain proportion of the debentures, may, by writing under his or their hands, appoint a receiver with specified powers. But, whether or not this right exists, a debenture holder, when entitled to enforce his security, can always commence a debenture holder's action, and immediately after doing so can apply to the Court to appoint a receiver. A body corporate cannot be appointed receiver [s. 306]. The position of a receiver appointed by the Court differs radically from that of a receiver appointed by debenture holders themselves by virtue of a power contained in their debentures. If the appointment is made bv the Court, the official receiver can be appointed [s. 307]. A receiver appointed by debenture holders, or by the trustees of a debenture trust deed, is an agent. Whether he is the agent of the company, or the agent of the debenture holders or trustees, as the case may be, depends upon the construction of the terms of the power under which he is appointed. Frequently, he is expressly declared to be the agent of the company, and it is provided that the company is alone to be responsible for his acts or defaults. In such a case he incurs no personal liability for his acts [Owen v. Cronk (1895), 1 Q.B. 265]. As agent of the company he has an implied power to sue in the company’s name [I'}eeler & Co. v. Warren (1928), Ch. 840]. He may, however, be the agent of the debenture holders or their trustees, either by the express terms of the provisions ander which he is appointed, or, where his status is not definitely specified, upon the construction of the provisions ander which he is appointed. Ss. 101 to 109 of the Law of Property Act, 1925, are generally incorporated, as varied by the provisions of the power, and in spite of the fact that Ss. 109 (2) of that Act provides that a receiver appointed under the Act is to be deemed the agent of the mortgagor, i.e. of the company, none the less it may often be the case that, where those sections are incorporated and varied, a receiver may be held to be the agent, not of the company, but of the debenture holders or their trustees [see Deyes v. Wood (1911), 1 K.B. 806], unless the deed itself expressly provides that the receiver shall be the agent of the company. The reason of this is that the powers of a receiver appointed Receivers. Appointed by Debenture Holders. 206 SECRETARIAL PRACTICE Duties. by debenture holders are in general far greater than those of a receiver appointed under the Law of Property Act, 1925. Upon liquidation, a receiver who was the agent of the company, ceases to be the agent of the company, but nevertheless he does not then become the agent of the debenture holders or their trustees, unless they in fact clothe him with authority to act on their behalf [Gosling v. Gaskell (1897), A.C. 575]. He then assumes personal liability for his acts "Thomas v. Todd (1926), 2 K.B. 511]. By s. 86 of the Companies Act, 1929, any person who appoints a receiver or manager under the powers contained in any instrument must within seven days of the appointment give notice to the Registrar of Companies. There are penalties for default. A receiver, although this notification to the Registrar is not his own duty, should nevertheless satisfy himself that it is being, or has been, done. The statutory duties of a receiver appointed by debenture holders or their trustees are: — (1) To deliver to the Registrar within one month or such longer period as the Registrar may allow after the expiration of six months from the date of his appointment and of every subsequent period of six months an abstract in the prescribed form of his receipts and payments during that period of six months [s. 310]. To deliver a similar abstract with the aggregate amount of his receipts and payments during all preceding periods on ceasing to act [s. 310]. On ceasing to act, to give the Registrar notice to that effect [s. 86]. Unless a winding up is in progress, to pay out of any assets coming to his hands, in priority to any principal or interest due on the debentures, the debts which in a winding up are entitled to preferential payment [s. 78]. The expression ‘assets coming to his hands’ includes assets which are subject to any floating charge, but not assets subject to a fixed charge created by the debentures [re Lewis Merthyr Consolidated Collieries, Ltd. (1929), 1 Ch. 498]. The date as at which these debts are to be reckoned is the date of the appointment of ‘the receiver. or of his taking possession. His general duties depend to a great extent upon the terms of his appointment, and are closely analogous to those of a liquidator, so far as the collection and realisation of assets MORTGAGES, DEBENTURES AND RECEIVERS 204 is concerned. As a rule, a receiver has express power given him to take possession of all or any of the property subject to the charge, to carry on the company’s business, to sell, and to compromise. But he cannot carry on the business unless he is expressly empowered to do so. He will accordingly enter into possession, and, if so authorised, carry on the business, collect the assets, and, if necessary sell all or any of them. Out of the proceeds he will pay the expenses of the business, interest on prior charges, preferential debts and his own remuneration, after which he will pay to the debenture holders the interest due to them. If, in order to pay off the principal due on the debentures, he sells, any surplus must be paid to the company, as also any surplus income if there is no sale. If the company is in liquidation, the Court may, on the application of the liquidator, fix the remuneration of the receiver or manager [s. 309]. A motion to the Court to appoint a receiver and manager is ordinarily the next step after the issue of a writ in a debenture holder's action, and a receiver and, if there is a going business, a manager will be appointed, if either principal or interest is in arrear, or if the security is in jeopardy, e.g. by a threatened winding up, or by execution having been issued on a judgment against the company; or if the assets are in danger owing to disputes between the directors [Stanfield v. Gibbon (1925), W.N. 11]. When the Court appoints a receiver it assumes the prorection of the property which constitutes the security of the debenture holders, and holds it for their benefit. A receiver appointed by the Court, and a manager appointed by the Court, are officers of the Court, and any interference with their possession or acts 1s contempt of Court. They are neither agents of the company, nor of the debenture holders. They are under the directions of the Court; and since the Court cannot be liable as their principals, it follows that they are primd facie personally liable, although they have a right of indemnity against the assets [Burt v. Bull (1895), ~ C 3. 276; Strapp v. Bull (1895), 2 Ch. 1]. A receiver appointed by the Court must give security tc account for what he receives. He is entitled to a proper salary or allowance for the performance of his duties. His appointment must be notified to the Registrar by the person at whose instance it was obtained within seven days from the date of the order appointing him [s. 86 (1)]. The usual order directs an enquiry as to the preferential payments to be made under s. 78 of the Act and provides for the Appointed by the Court. 208 SECRETARIAL PRACTICE receiver passing his accounts at intervals, generally, of six months. His duties are to take possession, to collect rents and debts, and generally to act as owner of the property charged. He may obtain the directions of the Court as to taking any contemplated step, and he should always do so where it is proposed to incur expenses, e.g. by borrowing money. As manager, when a favourable opportunity for a sale arises, and a sale is necessary in order to pay off the principal due on the debentures, he will invariably apply for the consent of the Court to the proposed sale, before attempting to carry it out. If a receiver or manager is appointed by the Court, or the debenture holders, any letters, etc., invoice, order for goods or business letters on which the name of the company appears, must contain a statement that a receiver or manager has been appointed [s. 308], and if the company is being wound up, that fact must also be stated on each such document [s. 280]. If (a) a receiver makes default for more than 14 days after written notice has been served on him to make good the default in filing, delivering or making any return, account or other document, or in giving any notice required by law, or (b) any receiver or manager appointed by the debenture holders or trustees for them fails, after demand by the liquidator therefor, to render proper accounts and pay the amount due to the liquidator, the Court may order the default to be made good and direct the costs of the application to be borne by the receiver [s. 3II]. CHAPTER XIX RECONSTRUCTION AND SCHEMES OF ARRANGEMENT IT is proposed in this chapter to give some account of the reconstruction of companies, indicating briefly the methods by which such reconstructions can be carried out. ‘Reconstruction” is a word which is frequently loosely, but inaccurately, used to include amalgamations, absorptions, reorganisations, and arrangements of all kinds, and any such transaction is commonly described as a reconstruction scheme, and it is in that sense that the word is used as the title of this chapter. Into the reasons for reconstruction it is not proposed to enter, but it may be of use to show what may be effected by reconstruction and by what methods. Reconstruction may be effected in the following ways:-I. By special Act of Parliament; 2. By a sale under s. 234 of the Companies Act, 1929; 3. By a sale under the powers in the memorandum of association; By a scheme of arrangement under s. 153 of the Act; By a scheme of arrangement with creditors alone under s. 251 of the Act; By the acquisition of a complete or controlling interest in a company. Of the above methods, 1 and 5 need but passing mention. As regards 1, it may sometimes occur, even now, that the legal and technical difficulties in the way of carrying out a reconstruction by the usual methods are insuperable, and, in such circumstances, the only possible course is to obtain a special Act of Parliament, whereby all obstacles may be surmounted. This procedure is, of course, expensive. As regards 5, a scheme of arrangement with creditors alone under s. 251 of the Act, this procedure is uncommon, and unsatisfactory in all but the simplest cases. An arrangement between a company about to be, or in the course of being, wound up voluntarily, is. hv the section, binding on the -O b. Reconstruction under s. 234. 210 SECRETARIAL PRACTICE company if sanctioned by an extraordinary resolution, and on the creditors if acceded to by three fourths in number and value of the creditors, subject to an appeal to the Court within three weeks by any creditor or contributory. Since the required majority of creditors is more difficult to obtain than that required in the case of an arrangement under s. 153, and, further, since there is no power to bind classes of creditors, it is almost always better to proceed under s. 153 (see p. 222). Of the remaining methods of reconstruction mentioned above, 2, 4 and 6 are by far the most important, but it will be necessary later to deal shortly with 3. It may be stated at the outset, that though the basis of most reconstructions is either s. 234 or s. 153 of the Act, yet in a very large number of cases the scheme is complicated by various other elements, e.g. subdivision of shares, or reduction of capital. [f a reduction of capital is included in a scheme, the provisions of the Act relating to reduction must be strictly complied with, and the reduction cannot be effected merely by obtaining the sanction of the Court to the reduction as part of the scheme "Cooper, Cooper and Johnson (1902), 51 W.R. 314]. It is not possible here to deal in detail with complex schemes of the nature just indicated. Reconstruction under s. 234 involving the formation of a new company is frequently resorted to, when it is desired to obtain further working capital and the ordinary means of so doing are impracticable. But it may also be utilised for various other purposes, e.g. as an alternative to a petition for reduction, or for alteration of objects, or to obtain enlarged powers when the case is not within s. 5 of the Act, or to effect an alteration in the respective rights of more than one class of shareholders when these are fixed by the memorandum. The expense involved in registering a new company, which the new capital duty greatly increased, discouraged reconstructions of this class when other means were available, but this objection has largely disappeared since s. 55 of the Finance Act, 1927, as amended by s. 31 of the Finance Act, 1928, came into force. See Appendix L. If it is desired to take advantage of this section, care must be taken to see that the requisite conditions are complied with, not only in the scheme as formulated [sub-s. (1)], but also in the scheme as carried out [sub-s. (6)]. If letters of renunciation are used, it may be impossible to prove that the scheme as carried out has complied with sub-s. (1) as it is doubtful whether allotment without registration amounts to an ‘issue of shares.” Thedraftsmen of the necessary documents must also bear in mind the provisions of sub-s. (3) as to the form of the documents. RECONSTRUCTION 211 Under the Act of 1908, this method of reconstruction was only possible if the transferee company was a company within the meaning of the Act [Thomas v. United Butter Companies of France (1909), 2 Ch. 484]; but this limitation is removed by the new Act and the usefulness of the section is thus increased. The effect of s. 234 is to enable the liquidator of a company in a members’ voluntary liquidation (see p. 231) with the sanction of a special resolution (which may be passed either before or concurrently with or after the resolution for windingup), to sell the whole or any part of its business or property to another company (whether a company within the meaning of the Act or not), the consideration for the sale being either wholly or in part shares policies or other like interests in the purchasing company for distribution among the members of the selling company, or the right for the shareholders of the old company to participate in the profits of or receive any other benefit from the new company, subject however, to the right of a shareholder who has not voted in favour of the resolution at the meeting at which the resolution was passed, to leave a notice of dissent, addressed to the liquidator, at the office of the company, within seven days of the passing of the resolution, requiring the liquidator purchase the interest of the dissentient. Accordingly, a three-fourths majority may effectively resolve upon this form of reconstruction, subject only to the liability to purchase the rights of a dissentient minority. By s. 243 the provisions of s. 234 are applicable, also in the case of a creditors’ voluntary winding up (see p. 231), with the modification that any powers conferred on the liquidator under that section can be exercised only with the sanction either of the Court or of the committee of inspection. [t is to be observed that the liquidator may be authorised to sell the whole or part of the business or property of the company. Property means the assets at the time of liquidation; and although it has been held that capital, then uncalled, cannot be included in the sale [Clinch v. Financial Corporation 1868), 4 Ch. App. 117], yet it is exceedingly doubtful whether that decision would now be followed; and if it is desired to include the uncalled capital, there is nothing to prevent a call being made just before the winding up, in order that the proceeds, though unpaid, may be included in the sale [New Zealand Gold Extraction Co. v. Peacock (1894), 1 Q.B. 622]. The section only authorises the sale to another company; accordingly a sale to an individual, who is to form the new company, making what profit he can, is invalid [Bird v 212 SECRETARIAL PRACTICE Bird's Patent (1874), 9 Ch. App. 358], though possibly the sale may be made to an individual as agent for a proposed company [Hester and Co. (1875), 44 L.J., Ch. 747]. It was long ago held ‘that the consideration for the sale may be partly paid shares in the purchasing company. Procedure The general procedure in this kind of reconstruction is under s. 234. shortly as follows: The agreement for sale to the new company, which will embody the particulars of the proposed scheme, must first be prepared. If the circumstances of the case permit, a meeting of directors will then be held and a statutory declaration of solvency made and filed under s. 230 of the Act before the notices of the general meeting of the company are sent out. Then a meeting of the old company will be convened for the purpose of passing a special resolution for winding up and appointing a liquidator, and a special resolution authorising the liquidator to enter into the proposed agreement. The meeting is held and the special resolutions passed, after which notice of the winding-up resolution must be inserted in the Gazette, and a printed copy of the special resolutions forwarded, as usual, to the Registrar. Prior to the new Act it was in every case of voluntary liquidation the duty of the liquidator, within seven days from his appointment to summon a meeting of creditors. This provision was oppressive where there was no insolvency and the voluntary winding up had been entered upon solely for the purposes of reconstruction, and now if a declaration of solvency has been made and filed as above indicated and the winding up is therefore a members’ voluntary winding up [s. 230] no creditors meeting will be necessary. In that event the new company will then be registered and the sale agreement duly entered into, after which, in due course, the shares in the new company will be distributed amongst the shareholders of the old company. The winding up of the old company will be completed, and the final meeting held, after which the return of the meeting having been held will be made to the Registrar, three months after which the company will be automatically dissolved. S. 234 will mainly be used in the case of a members’ voluntary winding up. If, however, the liquidation is a creditors’ voluntary winding up, the creditors’ meeting must be held in accordance with s. 238 and in any event [s. 243] the liquidator will be unable to act on the resolution under s. 234 authorising the agreement for sale without the sanction of the Court or the committee of inspection if one has been appointed under s. 240. If the requisite sanction is obtained, the subsequent proceedings will be similar to those in a members’ voluntary winding up RECONSTRUCTION 213 though the completion of the winding up will be governed by different sections of the Act. The new company is frequently registered with a name identical with that of the old. This is permissible under s. 17 of the Act, on the old company testifying its consent in such manner as the Registrar may require. Unless the objects of the company are being enlarged, it is often advisable to retain the old name. As regards the distribution of the consideration i.e. of the shares of the new company, amongst the shareholders of the old, it is always better to provide for their allotment direct to the persons entitled, in order to avoid the expense of transfer stamps and fees; but if the shares are partly paid it is especially desirable, in the liquidator’s interest, that this should be done, since he might incur serious liabilities by taking partly paid shares into his own name. A reconstruction of this kind is in general extremely simple, unless more working capital is wanted. Supposing that the sole object of the reconstruction is to enable the company to carry on a class of business which it has no power to carry on, then the memorandum of the new company will be drawn to contain the necessary power, and after the sale is complete a share of the new company will be allotted for each share of the old company of the same value and denomination, and, apart from the matter of dissentients, the result will be that a new company, exactly the same as the old, with the same board, the same capital, the same shareholders, and the same articles, and, perhaps, the same name, will continue to trade with enlarged powers. Or if the object of the reconstruction is to write off 50 per cent. of the capital of the company which has been lost, or is unrepresented by available assets, each shareholder in the old company will receive, say, for every fully-paid £1 share held by him a fully-paid 10s. share in the new company; and, irrespective of this reduction, the same undertaking will be carried on by substantially the same people. A scheme of reconstruction of this kind may not provide Alteration for the division of the shares in the new company among the of Rights. shareholders of the old company, otherwise than in accordance with their rights under the memorandum and articles. This was the decision in Griffith v. Paget [(1877), 5 Ch. D. 894], and if the rights are fixed by the memorandum, and therefore unalterable, this method cannot be used simpliciter where a distribution involving a variation of rights is desired. If, however, the rights are fixed by the articles, either of two clauses common in articles of association will get over the 214 SECRETARIAL PRACTICE Dissentients. difficulty: one is a clause enabling the liquidator, with the sanction of an extraordinary resolution, in making any distribution of assets amongst the shareholders, to make it otherwise than in accordance with their rights; the other is a clause enabling a majority of a particular class of shareholders to bind the minority in modifying the rights or privileges of the class. And if the articles contain no such provision, it is open to the company, as a first step towards the desired reconstruction, to alter them by special resolution in the ordinary way, so as to introduce the necessary provisions. No article can of course deprive dissentients of their statutory rights [Irrigation Co. of France, 6 Ch. App. 176]. If, however, the rights of classes of shareholders are unalterably fixed by the memorandum, it appears to be possible, when a distribution of assets otherwise than in accordance with those rights is desired, to proceed by means of a scheme of arrangement under s. 153. That section does not include any provision for dissentients, but having regard to the provisions of s. 234 the Court would probably require that provision be made for the treatment of dissentients in the same way as they must be treated in a reconstruction under 5. 234 [see Sandwell Park Colliery Co. (1914), 1 Ch. 589; General Motor Cab Co. (1913), I Ch. 377]. In a reconstruction under s. 234 the matter of dissentients is important. The number of dissentients might be more than a quarter of the shareholders, since the meeting at which the special resolution was passed might not be representative. However, where there is likely to be any considerable amount of dissent, the precaution will, in general, be taken of circularising the shareholders in advance to ascertain their views on the proposed reconstruction, and, if there appears to be a preponderance of dissent, the scheme will, of course, be abandoned. The position of a shareholder in the old company is this: he may either (1) assent to the reconstruction and claim the shares to which he is entitled; or (2) dissent as provided by the section; or (3) he may do neither. To entitle him to dissent he must not have voted in favour of the resolution at the meeting, and within seven days after the passing of the resolution he must leave at the registered office of the company a written notice expressing his dissent and requiring the liquidator either to abstain from carrying the resolution into effects or to purchase his interest as provided by the Act. Two decisions as to the notice of dissent should be observed. One is to the effect that the liquidator may waive a failure of a dissentient to comply with a condition of the section which was inserted solely for the benefit of the dissentient: thus, a RECONSTRUCTION 215 notice, even if not left at the registered office, may be accepted by the liquidator [Brailey v. Rhodesia Consolidated (1910), 2 Ch. 95]. The other (following an earlier decision) lays down that the notice must state both the alternatives, the option being the liquidator’s and not the dissentient’s. It is not for the dissentient to require the liquidator to take one and only one of the two alternative courses and frame his notice accordingly ‘Demerara Rubber Co. (1913), I Ch. 331]. Since the notice of dissent must be given within seven days after the passing of the resolution, it obviously should not be given before the passing, especially as no liquidator may then have been appointed. If a shareholder of the old company neither assents nor dissents, and does not claim the shares to which he is entitled under the scheme, he then loses his rights in the company, unless any have been reserved to him by the particular scheme: frequently, for example, the scheme provides that he is to be entitled to the proceeds of sale of the shares which he might have claimed. Buckley L.J., in his judgment in the case of Bisgood v. Henderson's Transvaal Estates (1908), r Ch. 793 thus conveniently summarises the provisions in the scheme which may properly be made without the dissentient being entitled to complain: ‘There is no hardship upon him in any of the following arrangements within reasonable limits: (1) That the shares for distribution be partly-paid shares, or (2) that if he wants the shares he must apply for them within a limited time, or (3) that shares unapplied for are to be at the disposal of the new company, or (4) that shares unapplied for may be sold and the member who does not assent shall take the proceeds (for this is giving him something more than that to which he would be otherwise antitled), or (5) that the shares shall not go to the company and be assets of the company, but shall go direct to the members.’ Although there is no illegality in a provision that a shareholder loses the right to shares if he does not apply for them within a limited time, there seems to be no reason for requiring an application where the shares to be issued are fully paid shares unless, perhaps, in a case where there are numerous shareholders on the register who cannot be traced. If a shareholder effectually dissents, as provided by s. 234 the price at which his shares are to be purchased must be ascertained in accordance with the provisions of the section, that is to say, the parties may agree, or, failing agreement, the price is settled by arbitration, pursuant to the Companies Clauses Consolidation Act, 1845. That Act provides for a single arbitrator to be agreed upon, or for an arbitrator to be 216 SECRETARIAL PRACTICE Creditors. nominated by each party and an umpire to be agreed upon. The Arbitration Act of 1889 also applies where it is not inconsistent with the Companies Clauses Consolidation Act, 1845. But where the company’s articles make other provisions for arbitration, they may be followed, to the exclusion of the Act [De Rosaz v. Anglo-Italian Bank (1869), L.R. 4 Q.B. 462]. The value must be determined by the arbitrator, who will often rely on the evidence of experts. He should not assume that the shares which form the purchase consideration are worth par, nor should he assume that the market price of the shares represents their true value. The value of the selling company’s business as a going concern, taking all the circumstances into consideration, will be an important element in enabling him to come to a conclusion. In framing the scheme care should be taken to provide a fund sufficient to purchase the interests of dissentients. This may be done by the exclusion from the sale of a sufficient portion of the assets of the old company, but it is more usual for the whole of the assets to be sold and the new company to undertake to provide the necessary money. This they may do by borrowing, or, if their shares are partly paid, out of the funds obtained by making a call thereon. If the interests of the dissentients are not adequately protected by the scheme, by the provision of adequate funds, the liquidator may be restrained from parting with the assets. The rights of dissentients are statutory rights, and members cannot be deprived of them by provisions in the articles; any such provisions are wholly invalid [Baring-Gould v. Sharpington Syndicate (1899), 2 Ch. go]. A scheme under s. 234 is, as has been stated, binding on the shareholders, but the rights of creditors are protected; for the section provides as follows: ‘If an order is made within a year for winding up the company by or subject to the supervision of the Court, the special resolution shall not be valid unless sanctioned by the Court.” There is, accordingly, for the space of a year, a danger of the scheme becoming inoperative; but at the expiration of a year, if no winding-up order or supervision order is made, the scheme is binding upon creditors as well as shareholders. There is a method of insuring the scheme against becoming inoperative which has sometimes been adopted; this is to procure a friendly creditor to petition for a supervision order, and afterwards to obtain the sanction of the Court to the scheme. However, it is usual for the matter of the creditors to be dealt with when the scheme is first mooted. Debenture holders are asked to agree to accept debentures in the new companv in lieu of RECONSTRUCTION 217 their existing debentures, and arrangements can be made for a sufficient amount of debentures of the new company to be underwritten to pay off those who object. As regards unsecured creditors, they may be asked to accept the liability of the new company instead of that of the old company. As a rule the scheme will provide for the new company taking over the liabilities of the old company, and any creditors who do not accept the new company as their debtor, will be paid. A shareholder who is injured may apply for an injunction to restrain the carrying out of the scheme [Clinch v. Financial Corporation (1868), 4 Ch. App. 117]; but when the agreement has been executed the unfairness of the scheme is not a ground on which the Court will make an order for winding-up though it may adjourn the hearing of the petition to give the shareholder an opportunity of challenging the validity of the scheme by an action [Imperial Bank of China (1866), 1 Ch. App. 339]. If, however, the agreement has not been executed and the scheme is unfair, a compulsory order may be made {Consolidated South Rand Mines Deep (1909), I Ch. 491]. In a reconstruction under s. 234 a practical difficulty arises where the shares, or some of them, upon which it is desired to make an assessment, are represented by warrants to bearer. In a case of this kind, extensive advertisement is necessary, and a much longer period must be allowed, during which a shareholder is to be entitled to claim his allotment, than where the shares are all registered. Seeing that a reconstruction of this kind almost invariably involves the allotment of shares, either wholly or partly paid, the provisions of s. 42 of the Act must be complied with, and within one month after the allotment the written contract constituting the title of the allottee to the allotment must be delivered to the Registrar, and the other returns prescribed by the section made. This appears to necessitate the execution of a contract between the new company and a trustee for the allottees, which, together with the reconstruction agreement, will have to be filed. If, however, the reconstruction agreement provides for the allotment to the liquidator of the shares in the new company, no supplementary contract will bnecessary. Where the object of the reconstruction is to obtain fresh working capital, it is frequently necessary to resort to underwriting. Under the Act of 1900 the payment of underwriting commission on a reconstruction was held to be illegal as such commission could only be paid on shares offered to the public for subscription. Under the Act of 1908 and under s. 43 of the Act of 1929 there was and is no such difficulty. It Underwriting on Reconstruction. 218 SECRETARIAL PRACTICE might, however, still be argued that if the underwriters are to get the shares credited as partly paid under the reconstruction agreement, they are agreeing conditionally to purchase, not to subscribe for shares. However, it was held under the Act of 1908, that this argument was unsound and that underwriting commission could be paid [Barrow v. Paringa Mines (1909), 2 Ch. 658] and there is nothing in the new Act to affect this decision. The usual practice as regards underwriting is for a preliminary underwriting agreement to be entered into between the board of the old company and the underwriters or guarantors, and for that agreement to have scheduled to it the detailed agreement, which the old company and its liquidator will enter into with the new company, when the former has gone into liquidation and the latter is registered. The shareholders of the old company approve the preliminary agreement and schedule at the liquidation meeting. This preliminary agreement usually provides that if a certain percentage of shareholders effectively dissent, the underwriters shall be allowed to cancel the agreement. It is therefore usual to take no further steps until after the seven days allowed for dissents, but immediately that period has expired, the new company will be registered, and the board will enter into the contract scheduled to the preliminary agreement and also an agreement for sale. The liquidator will then send out his circular to the shareholders of the old company and tell them how many shares they are entitled to apply for in the new company, giving particulars as to payment of the balance, names of the directors of the new company, their interest in the company, and the amount of commission payable to the underwriters, etc., and will state that the applications for shares must be accompanied by certificates for shares in the old company. The bankers of the company, to whom applications are sent, should be instructed to receive no applications unless accompanied by relative share certificates. The agreement usually provides that the shareholders of the old company shall be entitled, on the nomination of the liquidator, to a pro rata number of shares in the new company, credited with so much per share paid up. A method of avoiding considerable work is, for the liquidator to write out the allotment sheets as applications for shares in the new company are received, and to sign those allotment sheets for the purpose of nominating the shareholders of the old company for allotment of shares in the new company. This saves the new company writing out fresh allotment sheets. RECONSTRUCTION 21Q Then when the new company has allotted, and proposes to deliver the return as to allotments to the Registrar, the contract, which in ordinary circumstances, would have to set out the names and particulars of the allottees, can be made with a trustee, and can state that the shares were allotted to the parties and in the proportions set out on the return as to allotments ‘ presented for registration herewith.” This course results in a considerable saving in labour. [f, as is usual, the liquidator has to sell all the shares not taken up by shareholders in the old company, he will, when sending out his circular, send out also a form of tender and application form combined, for such shares as are not taken up, and it is desirable to have this form of tender printed on a different coloured paper, so as to avoid confusion. He should also advertise the fact that such shares are for sale, and that forms of tender can be obtained at his office. Having regard to s. 35 (3) of the Act it appears now to be necessary that the application form should be accompanied also by a prospectus complying with s. 35 (1). It will be necessary to fix a time within which shareholders can claim their shares in the new company, but it will also be found desirable considerably to extend this time in the case of shareholders resident abroad. After the time within which shareholders can apply has =xpired, the new company will allot the shares on the nomination of the liquidator, but the liquidator should not definitely accept tenders for excess shares until after the expiry of the time allowed within which foreign applications can be received. The agreement will usually provide that the proceeds received on sale of shares not taken up by shareholders, shall be divided amongst the shareholders (other than dissentients) who do not come into the scheme, but the expenses of advertising the shares for sale will first be deducted. If the liquidator has to sell a substantial number of shares, the same difficulty may arise in satisfying the Commissioners of Inland Revenue that the conditions of s. 55 (1) of the Finance Act, 1927, have been fulfilled in the reconstruction as actually carried out as may ensue from the case of letters of renunciation in connection with a scheme of reconstruction (see above p. 210.) As regards reconstruction under the powers in the memorandum of association, this method of reconstruction, which was formerly common, is not often possible, owing to the decision of the Court of Appeal in Bisgood v. Henderson's Transvaal Estates [(1908), 1 Ch. 743]. The effect of that decision, as stated in the head-note ix the Law Reports, is this: ‘The sale of all a company’s assets. and all its undertaking, and the distribution of the proceeds. Reconstruction under powers in Memorandum. 220 SECRETARIAL PRACTICE cannot be a corporate object, so that, under a clause for that purpose introduced into the memorandum of association, such a sale and distribution can be made without regard to the provisions of s. 161 of the Companies Act, 1862’ (now, of course, s. 234 of the Act of 1929). ‘A company limited by shares cannot by its memorandum and articles of association provide as part of its constitution that in an event the corporator shall either submit to a liability in excess of the limit of liability on his shares, or shall be dispossessed of his status as corporator.’ The practical result is that, as regards sales under a power in the memorandum, they appear to be legal, if liquidation is neither contemplated nor in progress, but inasmuch as a scheme of reconstruction by sale to a new company generally involves liquidation and distribution in specie it is not often practicable to proceed under a power contained in the memorandum. To use such a power the only possible procedure appears to be to effect an out-and-out sale for shares, and, subsequently, as a wholly independent transaction, to resolve upon liquidation with the object of distributing the proceeds. This would mean that the selling company would for a time become simply an assets-holding company. This course is sometimes adopted, especially when the shares of the selling company are held by a small number of persons who can by separate agreement bind themselves to put the company in liquidation and authorise the distribution of the assets in specie. The legality of this course was recognised in Mason v. Motor Traction Co. (1905), 1 Ch. 419, which, though mentioned in argument in Bisgood’s Case was not overruled, but apparently approved by Buckley L.]J., himself. It is thought that Etheridge v. Central Uruguay Railway (1913), 1 Ch. 425 is not inconsistent with this view, as the resolutions submitted to the meeting in that case provided for liquidation and distribution of the shares forming the purchase consideration in specie among the members and the transaction was therefore clearly within s. 192 of the Act of 1908. It must, however, be pointed out that any attempt to evade the effect of Bisgood’s Case by these means would be very carefully scrutinised, and very slight evidence indeed of an ultimate intention to go into liquidation for the purpose of distributing the proceeds of sale would probably be sufficient to wreck the scheme. The conclusion is that for most purposes, at all events, schemes of reconstruction by means of a sale under the powers in the memorandum have become impracticable and are best left alone. This, however, is subject to the important proviso that. in cases where there is complete unanimity amongst the RECONSTRUCTION 221 shareholders, there is nothing to prevent such a scheme going through, illegal though it may be, and plenty of such schemes have been carried out even since Bisgood's Case. As regards amalgamations, it is only necessary to state that they are in general effected either by means of proceedings under s. 234 or by a purchase of shares. Where the amalgamation is effected under s. 234, the process where Company A is absorbed by Company B will be a single sale; or where a new company acquires the undertakings of both Company A and Company B, there will, of course, be an independent sale by cach. The law is the same, and the difficulties are the same as in simple reconstructions, and need not be further commented on. As regards amalgamation by a purchase of shares, this amounts simply to the acquisition of all, or, if it is merely desired to be able to pass an extraordinary resolution, at least three-fourths of the shares of the company. Sometimes, however, the acquisition is limited to those classes of shares which carry full voting rights. This method of amalgamation has become increasingly popular, both because it preserves the names and thus the goodwill of the original companies and, at any rate prior to the coming into force of s. 55 of the Finance Act, 1927, because it avoided the duty under s. 112 of the Stamp Act, 1891 involved in the formation of a new company. A common method of procedure is for an agreement to be entered into with the directors of the company the shares of which it is desired to acquire on behalf of themselves and all other members of that company who ratify the agreement, the agreement being made conditional on ratification within a fixed period by an agreed majority. The directors then circularise the shareholders and if the requisite majority ratify within the time limited, the agreement becomes absolute. This form of amalgamation is recognised by s. 155 of the Act of 1929, under which if a scheme or contract involving the transfer of shares or any class of shares in a company (called ‘the transferor company’) to another company, whether a company within the meaning of the Act or not (called ‘the transferee company’), has within four months of the offer being made been approved by the holders of at least nine-tenths in value of the shares affected, the transferee company may, on notice given in the prescribed manner to any dissenting shareholder within two months, after the expiration of the above period of four months, purchase the shares held by any dissenting shareholder upon the terms specified in the scheme or contract. The expression ‘dissenting shareholder’ includes any share-Amalgama- Amalgama-{ion by share purchase. 222 SECRETARIAL PRACTICE holder who has not assented to or has failed to carry out the scheme. The dissenting shareholder has a right of appeal to the Court exefciseable at any time within one month after the notice was given to him; if a notice is given and no order is made by the Court to the contrary, the purchase of the interest of the dissentient shareholder will be carried out through the transferor company as provided by sub-sections (2) and (3) of the section. For the provisions of s. 55 of the Finance Act, 1927, as amended by s. 31 of the Finance Act, 1928, see Appendix L. It should be observed that where all the shares are being acquired, it is necessary to take care not to acquire the qualifying shares of the directors, until by the machinery of the articles a fresh board of properly qualified persons has been appointed, after which the old qualifying shares can be transferred, thus completing the matter. Further, care should be taken that the shares acquired are in the case of a public company, put into the names of not less than seven persons or, in the case of a private company, two persons. Schemes of Turning now to the remaining common form of recon-Avangs. q struction, more properly described as a scheme of arranges 153. Unger ment, s. 153 of the Act, stated shortly, provides that when a compromise or arrangement is proposed between a company and its creditors, or any class of creditors, or between the company and its members, or any class of members, the Court may, ‘on the application of the company, or any creditor or member, or, in the case of winding up, of the liquidator, direct that a meeting of the creditors or class of creditors, or of the members or class of members, as the case may be, be convened, and if a majority representing three-fourths in value of those present and voting agrees to the compromise it is, when sanctioned by the Court, to be binding on the creditors or class of creditors, or the members or class of members, as well as on the company, or, if there is a liquidation then on the liquidator and the contributories. The chief advantages of a scheme of arrangement are that a majority of creditors may bind the minority, for example, to accept debentures or shares in lieu of cash, or foregoing arrears oi interest ; and that (unless as part of the scheme a new company is formed to purchase the undertaking and is not in a position to take advantage of s. 55 of the Finance Act, 1927), the expense of registration and the stamp duty on the transfer of assets 1s avoided. It will be remembered that under s. 234 creditors are not bound until a year has elapsed from the passing of the special resolution. It should be noted that under the new Act persons present, RECONSTRUCTION 223 but not voting, are excluded in calculating whether the requisite majority has been obtained. Schemes involving the consolidation of shares of different classes or the division of shares into shares of different classes are brought expressly within the section by sub-s. 5. The section is applicable not only to companies within the meaning of the Act, but to all companies liable to be wound up under the Act [s. 153 (5)]. It applies therefore, not only to companies registered under the Act in England and Scotland, and to existing companies as defined by s. 380, but also to unregistered companies as defined by s. 337 unless within the exception referred to in s. 338 (1) (a). The jurisdiction of the Court in sanctioning the scheme is unlimited, and it may sanction any form of scheme which is within the ambit of the section and is not within s. 234. In general, if the provisions of the Act have been complied with, and the scheme is reasonable, and no injustice has been done to any class, and if satisfied that the majority supporting the scheme are acting bond fide, the Court will not withhold its sanction. The Court may, however, require modifica tions of the scheme as approved by the classes interested, or may attach conditions; and, in order to avoid the necessity for summoning fresh meetings to approve the scheme as modified by the Court, it is usual to insert a clause in the scheme authorising the applicant to assent to any modifications or conditions in the scheme which the Court may think fit to require or impose. In one case, for instance, the Court attached the condition that a minority of shareholders who disapproved the scheme should have the rights of dissentients ander s. 234, i.e. should be entitled to require the liquidator to purchase their interests in the company [Canning Jarrah Timber Company (1900), 1 Ch. 708]. The schemes which have from time to time been sanctioned by the Court are of the most varied description. Thus, debenture holders and creditors have accepted shares for their debts; existing debenture holders have been postponed to new debentures to be created; creditors have received part cash and part debentures, or part cash and part shares, in satisfaction of their debts; one creditor has taken over all the assets, and paid the costs of the winding up and a composition to the other creditors; shares or debentures have been accepted in lieu of arrears of debenture interest; debenture interest has been reduced, future profits being devoted to the redemption of the debentures. The scheme may, and often does, involve the formation of a new company to acquire all or part of the assets; or, if a liquidation is in progress, it Forms of Schemes. 224 SECRETARIAL PRACTICE may provide for a stay of the liquidation and the continuance of the old business. It may also involve the reduction, unification, consolidation or reorganisation of the capital of the company, or the modification of the rights of a class of shareholders. Where a compromise or arrangement is proposed in connection with a scheme of reconstruction or amalgamation involving the transfer of the whole or any part of the undertaking or property of one company to another company, the Court is empowered to facilitate the scheme by making provision for such matters as the transfer of property, the allotment of shares, etc., pending legal proceedings, the dissolution of the transferor company without a winding up and provision for dissentients [s. 154]. Notwithstanding this section, it would seem advisable for the scheme itself to contain provisions at least as to transfer of property, allotment, and if it is intended to confer rights on dissentients, for dissentients. The powers conferred on the Court by the section will prove particularly valuable if any unforeseen difficulty arises in carrying out the scheme, as they can be exercised not only by the order sanctioning the scheme but at any subsequent time. S. 154, however, only applies to companies within the meaning of the Act. It does not therefore apply to unregistered companies as defined by s. 337. In carrying out any scheme of reconstruction, whether ander s. 234 or under s. 153 or otherwise, legal advice is almost invariably necessary. No order sanctioning a scheme will take effect until an office copy thereof has been delivered to the Registrar for registration, and a copy of every such order must be annexed to every copy of the memorandum issued after the order has been made [s. 153 (3)]. Any order made under s. 154 must be delivered to the Registrar for registration within seven days after it is made. Compen- The Act of 1908 contained no provision affecting the paysation for ment of compensation for loss of office to a director retiring as loss of office. the result of the sale of the undertaking of a company or its amalgamation with another company though if an agreement to effect either of these objects contained a provision for payment by the purchaser of such compensation and the agreement was submitted to a general meeting of the company for ratification, a resolution approving the agréement would not be binding on absent or dissenting shareholders if the notice concerning the meeting did not contain proper disclosure of the compensation intended to be paid to the directors [Kaye v. Croydon Tramways (1898), 1 Ch. 358]. This decision would RECONSTRUCTION 225 not, however, cover the case of an amalgamation by the purchase of the shares of a company. The Act of 1929 's. 150] restricts the payment of such compensation by making it unlawful to make any such payment in connection with (1) the transfer of the whole or any part of the undertaking or property of a company, or (2) the transfer of all or any of its shares as the result of any offer to the general body of the shareholders unless proper disclosure has been made to the shareholders, and in the former case, the proposal has been approved by the company in general meeting. The section also contains provisions preventing an evasion of the section and making any director receiving an illegal payment trustee of the amount received for the company or for the shareholders who sell their shares as the result of the offer, as the case may be. CHAPTER XX WINDING UP CoMPANIES may be wound up by three distinct methods. The winding up may be (1) compulsory, i.e. by the Court; (2) subject to the supervision of the Court; (3) voluntary. Of these, by far the commonest is voluntary winding up, and it is proposed in this chapter to deal mainly with that method, only mentioning a few salient features of the others. Before proceeding to consider the law now in force on the subject, it should be mentioned that by s. 383 of the Act of 1929, the provisions of that Act do not apply to any liquidation which commenced before the 1st November, 1929. As regards such liquidations the provisions of the Act of 1908 and the Winding-up Rules, 1909, will remain in force. By the Court. Compulsory liquidation is brought about by order of the Court on petition, and is carried out under the direction of the Court, the sections of the Act exclusively applicable being ss. 163 to 224. The circumstances in which a company may be wound up by the Court are enumerated in s. 168 of the Act as follows: — (i) If the company has by special resolution resolved that the company be wound up by the Court; (ii) if default is made in delivering the statutory report to the Registrar or in holding the statutory meeting; (iii) if the company does not commence its business within a year from its incorporation. or suspends its business for a whole year; {iv) if the number of members is reduced, in the case of a private company, below two, or, in the case of any other company, below seven; (v) if the company is unable to pay its debts; (vi) if the Court is of opinion that it is just and equitable that the company should be wound up. And s. 169 provides that a company shall be deemed to be unable to pay its debts— (i) If a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding fifty pounds then due, has served on the company, by leaving it 226 WINDING UP 22% at the registered office of the company, a demand under his hand requiring the company to pay the sum so due, and the company has for three weeks thereafter neglected to pay the sum, or to secure or compound for it to the reasonable satisfaction of the creditor; or if, in England or Northern Ireland, execution or other process issued on a judgment decree or order of any Court in favour of a creditor of the company is returned unsatisfied in whole or in part; or (iii) if, in Scotland, the inducie of a charge for payment on an extract decree, or an extract registered bond, or an extract registered protest have expired without payment being made; or if it is proved to the satisfaction of the Court that the company is unable to pay its debts, and, in determining whether a company is unable to pay its debts, the Court shall take into account the contingent and prospective liabilities of the company. A petition may, subject to certain restrictions (see s. 170), be presented by the company itself, by one or more creditors, or by one or more shareholders, or by all or any of those parties, together or separately, or if the company is already being wound up voluntarily by the Official Receiver. If the cround of the petition is default in delivering the statutory report to the Registrar, or holding the statutory meeting, the Court may direct the default to be made good instead of making a winding-up order [s. 171 (2)]. Upon an order for winding up being made, the proceedings in the liquidation are conducted temporarily by the Official Receiver, as provisional liquidator, and subsequently by one or more liquidators appointed by the Court, or if no liquidator is so appointed, by the Official Receiver as liquidator [s. 185] a copy of the winding-up order must be sent forthwith to the Registrar 's. 176]. A corporation cannot be appointed liquidato~ 's. 2781. The commencement of the winding up (a date of considerable importance) is deemed to be (1) if the company is not already in voluntary liquidation, the date of the presentation of the petition [s. 175 (2)], and (2) if it is already in voluntary liquidation, the date of the passing of the resolution for winding up, the order being thus retrospective. Under the Act of 1908, the date of presentation of the petition was always the commencement of the winding up, and this fact had sometimes unfortunate consequences where compulsory Presentation of Petition. Commencement of Winding up. 228 SECRETARIAL PRACTICE Compulsory Order. winding up superseded a voluntary winding up, e.g. if debentures had been issued three months before the passing of the resolution, but more than three months before the presentation of the petition. (See s. 212 of the Act of 1908.) If a compulsory winding up supersedes a voluntary winding up, all proceedings in the voluntary winding-up will be deemed to be valid, unless on proof of fraud or mistake, the Court directs otherwise [s. 175 (1)]. The liquidator, who is generally assisted and partly controlled by a committee of inspection, composed of creditors and contributories, takes the necessary steps to collect and realise the assets, to settle the lists of creditors and contributories (unless the Court dispenses with a list under s. 203), and to pay the debts, and then to adjust the rights of the contributories, distributing amongst them any surplus. Upon the completion of the winding up, he obtains his release from the Board of Trade [s. 197], and the Court makes an order for the dissolution of the company [s. 221]. The liquidator must report the making of the order to the Registrar within 14 days of its being made [s. 221 (2)]. An order for a compulsory winding up is nearly always made on the petition of a creditor when the company is insolvent, and a secretary of a company is unlikely to be appointed liquidator in the compulsory winding up thereof. [t is not, therefore, proposed to consider in any detail the other provisions of the Act applicable in a compulsory liquidation. Attention may, however, be called to the following points :— (x) If a petition is presented, the Court may, even before an order is made for winding up, stay any pending proceedings [s. 172] or appoint a provisional liquidator 's. 184]; and after an order has been made or a provisional liquidator appointed no proceeding may be commenced or proceeded with except by leave of the Court [s. 177]. {f an order is made, any disposition of the property of the company or transfer of its shares after the commencement of the winding up (see p. 22% above), will be void unless the Court otherwise orders [s. 173], and any execution put into force against its assets after the same date will be altogether void [s. 174]. If an order is made or a provisional liquidator is appointed, the liquidator or provisional liquidator (if one is appointed) takes into custody or under his control all the company’s property [s. 18g], but the 2) (3) WINDING UP 22¢ property does not vest in the liquidator unless an order is made under s. 190. 4 If an order is made, a statement of affairs must, unless the Court otherwise orders, be made out and delivered to the Official Receiver verified by affidavit. The Official Receiver, subject to the direction of the Court, will decide who is to submit and verify the statement; but, as a rule, he will direct this to be done by one or more directors and the secretary, or other chief officer 's. 181]. As soon as practicable after the statement is delivered, or if it is dispensed with by the Court, after the order for winding up is made, the Official Receiver will submit a preliminary report to the Court in the matters prescribed by s. 182 (see also Rules 50-55 of the Companies (Winding-up) Rules, 1929). The Court may at any time after a winding up order is made, make an order on certain persons, including the secretary or any other officer of the company, for delivery to the liquidator of any property in his hands to which the company is primd facie entitled [s. 204]. 5) 6) At any time after the provisional liquidator is appointed or a winding up order is made, the Court may order the private examination on oath before the Court of any officer of the company or other person known or suspected of having in his possession any property of the company or believed to be capable of giving information as to its promotion, formation, trade dealings, affairs or property [s. 214]. If an order is made for winding up by the Court and the Official Receiver reports that in his opinion a fraud has been committed in connection with the company by any promoter, director or officer, the Court may direct a public examination of the person alleged to have been fraudulent [s. 216}, or may on the application of the Official Receiver order that that person shall not, without the leave of the Court be concerned or take part in the management of any company for such period, not exceeding five years from the date ° the report, as may be specified in the order [s. .-7) ‘8 The Court may, at any time after an order has been made, stay the winding up on the application of the liquidator, the Official Receiver, or any creditor or contributory on such terms as it thinks fit [s. 2021. 230 SECRETARIAL PRACTICE Subject to Supervision. Powers of Liquidator. Voluntary. The jurisdiction of the Court to make an order for the winding up of a company extends, not only to companies as defined by s. 380, but also to unregistered companies as defined by s. 337 unless within the exception mentioned in 5s. 338 (1) (a). An order for winding up an unregistered company can, however, only be made on the occurrence of one or other of the events mentioned in s. 338 (1) (4). No unregistered company can be wound up voluntarily or subject to the supervision of the Court. Winding up, subject to the supervision of the Court, is brought about by order of the Court [s. 256], on petition presented when a voluntary winding up is already in progress, by one or more of the parties who may petition for a compulsory order (see above). The presentation of a petition for a winding up under supervision gives the Court the same jurisdiction over proceedings against the company as the presentation of a petition for winding up by the Court [s. 257], and if an order is made s. 173 as to avoidance of dispositions of property and s. 174 as to avoidance of executions apply as if an order for winding up by the Court had been made [s. 258]. The date which was the commencement of the voluntary winding up which it supersedes (i.e. the date of the passing of the winding up resolution) is not altered, and becomes the date of the commencement of the winding up under supervision. By the supervision order the Court may appoint liquidators either in substitution for or in addition to those already appointed by the company [s. 259]. The liquidator’s powers, unless restricted by the Court, are identical with those possessed by a liquidator in voluntary winding up, except that he cannot pay any class of creditors in full or make any compromise within s. 191 (1) (d), (e) or (f) without the sanction of the Court [s. 260 (1)]. By s. 260 (2) it is provided that an order for winding up under supervision is to be deemed a winding up by the Court except for the provisions of the Act set out in the ninth schedule thereto. In view, however, of s. 260 (1) the liquidation will proceed generally as in a voluntary winding up. The company will altimately be dissolved in the same way as in a voluntary winding up. Having regard to the practically unlimited powers of application to the Court under s. 252 of the Act, there is seldom any great advantage in obtaining a supervision order, and such orders are rare. Voluntary winding up and the position of the liquidators therein require much more detailed treatment. since the office WINDING UP 231 of liquidator is frequently undertaken by a company’s secretary. S. 225 of the Act enumerates the circumstances in which a company may be wound up voluntarily. These are as follows: (a) When the period, if any, fixed for the duration of the company by the articles expires, or the event, if any, occurs, on the occurrence of which the articles provide that the company is to be dissolved, and the company in general meeting has passed a resolution requiring the company to be wound up voluntarily: If the company resolves by special resolution that the company be wound up voluntarily: If the company resolves by extraordinary resolution to the effect that it cannot by reason of its liabilities continue its business, and that it is advisable to wind up. Of the above, (a), which, it will be observed, requires only an ordinary resolution, is seldom met in practice. In the case of an insolvent company, (c) is appropriate, and an extraordinary resolution will suffice. In any other case, e.g. if the winding up is for the purpose of reconstruction, (b) 1s applicable, and a special resolution is necessary. It need hardly be pointed out that, if a valid voluntary winding up is to be set on foot, extreme care must be taken in every detail connected with the convening and holding of the meeting. Under the Act of 1908, no distinction was made between a Members’ case where the company was solvent, and one where it was andCreditors’ insolvent. In either event the liquidator was appointed in Youtury a the first instance by the company in general meeting and the only course open to creditors who desired the appointment of another liquidator was to resolve at the meeting which had to be convened pursuant to s. 188 of that Act to apply to the Court for the appointment of another liquidator jointly with or in substitution for the liquidator appointed by the company. Under the Act of 1929, a distinction is drawn between a solvent and an insolvent winding up, the former being called ‘a members’ voluntary winding up,’ and the latter ‘a creditors’ voluntary winding up.” The winding up is a members voluntary winding up, if, before the date on which the notices of the meeting at which the resolution for the winding up is to be proposed are sent out, (1) the directors, or if there are more than two directors, a majority of the directors at a board meeting make a statutory declaration to the effect that they have made a full inquiry into the affairs of the company and that, having so done, they have formed the opinion that the 232 SECRETARIAL PRACTICE company will be able to pay its debts in full within a period, not exceeding twelve months, from the commencement of the winding up (¢.e. the passing of the resolution), and (2) the above-mentioned declaration is delivered to the Registrar for registration [s. 230]. A declaration under this section should be in Form No. 39 (b) of the forms scheduled to the Companies (Forms) Order, 1929. If no such declaration is made and delivered to the Registrar for registration before the notices are sent out, the winding up is a creditors’ voluntary winding up, even though the company may in fact be solvent. In either event the requisite resolution must be passed. The requisites for an extraordinary and special resolution are contained in s. 117, and have already been considered in Chapter XIV. Having regard to the distinction made in the new Act between a members’ voluntary winding up and a creditors’ voluntary winding-up (s. 230), it will no longer be safe to rely on a certified copy of a resolution effecting the appointment, and a statutory declaration by the liquidator that he has been duly appointed in the case of a members’ voluntary winding up pursuant to s. 232 of the Act and in the case of a creditors’ voluntary winding up, pursuant to 239 of the Act should be required. : The secretary of a company is more likely to be appointed liquidator in a members’ voluntary winding up than in a creditors’ voluntary winding up; but it is proposed to deal with the provisions applicable to both classes of voluntary winding up. Before doing so, however, it should be observed that under s. 156 the provisions of the Act with respect to winding up apply, unless the contrary appears, alike to winding up by the Court, winding up under supervision and voluntary winding up. In addition, therefore, to the provisions expressly made applicable to voluntary winding up the following portions of Part V of the Act apply :—ss. I 57-162 (which dealt with contributories and their liability) and such of the sections contained in the group headed ‘Provisions applicable to every mode of winding up,” “which includes ss. 261 to 305, as are not expressly made applicable exclusively to either or both of the other kinds of winding up. Moreover, under s. 252 the liquidator may apply to the Court to exercise, as respects the enforcing of calls, or any other matter, all or any of the powers which the Court might exercise if the company were being wound up by the Court. This section in effect makes applicable in a voluntary winding up the group of sections headed ‘ General Powers of Court in case of winding up by the Court,” which comprises ss. 202 to 22I. Ss. 200. 216 and 217, however, will not apply, s. 209 because WINDING UP 2313 the Official Receiver will never be liquidator in a voluntary winding up, and ss. 216 and 217 because the Official Receiver does not report to the Court in a voluntary winding up. The practice rules as to voluntary winding up are to be Practice. found in the Companies (Winding-up) Rules, 1929, but a detailed examination of these rules is beyond the scope of this work, and a liquidator would always be well advised to consult a solicitor before making any application to the Court. Certain of the rules, however, affect liquidators in matters other than applications to the Court, and such rules are dealt with hereafter. Rule 1 in effect provides that the Rules are to be applicable to every form of winding up, unless, from their nature or subject matter, or by the headlines above the group in which they are contained, or by their terms, they are or are made applicable only to a particular form or particular forms of winding up. There is thus no serious difficulty in discovering what rules are and what are not appropriate. The more important rules affecting a liquidator in a voluntary fiquidation are set out in Appendix K. Before considering further any of the sections of the Act which are of general application, it will be convenient to refer to the sections which are applicable only in a voluntary winding up. The first point to be observed is that the commencement of a voluntary winding up is the time of the passing of the resolution for winding up [s. 227]. This date is of great importance, e.g. as to the liability of past members s. 157], as to matters of fraudulent preference {s. 265!, and as to the validity of floating charges [s. 266]. On the commencement of the winding up the company must cease to trade, except for the purpose of beneficial winding up [s. 228], and no transfer or other alteration in the status of a member can thereafter be made without the sanction of the liquidator 's. 229]. None the less—and it is important to remember this point—the corporate existence of the company and its corporate powers continue until its dissolution, notwithstanding anything in its Articles [s. 228]. A resolution for voluntary winding up may in some cases operate as a dismissal of the company’s servants, but whether or not it has this effect depends on the fact™ “= eorh = lar case [Reigate v. Union Manufactur 592; and see Midland Counties 2 r Ch. 357]. The resolution for voluntary winding up must be advertised Advertisein the London Gazette within seven days after the passing ment. thereof, and in the event of default in doing so. the companv Commencement and Effect of Voluntary Winding-up. 234 SECRETARIAL PRACTICE and every officer of the company in default (including the liquidator) will be liable to a penalty [s. 226]. Members’ In a members’ voluntary winding up the liquidator will be Voluntary appointed by the company in general meeting [s. 232 (1)]. Winding UP. The appointment will usually be made at the meeting which resolves on the winding up. The appointment need not be made by special resolution, and the notice need not name the liquidator, though it must give notice of the intention to appoint a liquidator. Although more than one liquidator may be appointed in the case of a members’ voluntary winding up, this seems unnecessary, as a rule involves extra expense and may lead to difficulties if one liquidator dies [see s. 248 (3)]. Accordingly the usual course in a members’ voluntary liquidation will probably be to appoint a soleliquidator. As will be seen hereafter in a creditors’ voluntary liquidation only one liquidator can be appointed except by the Court. On the appointment of a liquidator the powers of the directors cease except so far as the exercise thereof is sanctioned by the company in general meeting or the liquidator [s. 232 (2)]. It is sometimes convenient to give this sanction, e.g. when it is desired to make a call. Any vacancy in the office of liquidator will, subject to any arrangement with creditors, be filled by the company in general meeting at a meeting convened by any contributory or by the continuing liquidator if such there be [s. 233]. No creditors’ meeting will be called in a members’ voluntary liquidation. Creditors’ In a creditors’ voluntary winding up, ¢.e. if no declaration of Voluntary solvency has been made and lodged with the Registrar Winding Up. pursuant to s. 230 the company must summon a meeting of creditors to be held at the place most convenient to the majority of the creditors [see R. 129 of the Companies (Winding-up) Rules, 1929], on the same day as, or on the day after the day on which the meeting of the company to pass the resolution for winding up is to be held [s. 238]. The provisions of this section may be summarised as follows: — (1) The notices to the creditors must be posted simultaneously with the notices to the members. General and special forms of proxy must be sent with the notices [R. 146 of the Companies (Winding-up) Rules, 1929]. The notice of the creditors’ meeting should be sent to the last known address of each creditor and must be advertised once in the Gazette, and at least once in two local newspapers circulating in the district where either the registered office or the principal place of business is situate. The Act does not state when the advertisements must be inserted. but having regard to R. 127 of J WINDING UP 235 the Rules, they should be inserted at least seven clear days before the meeting is held. The directors must appoint one of their number to preside at the creditors’ meeting. and the director so appointed must preside at the meeting. The directors must prepare and lay before the meeting a full statement of the position of the company’s affairs and a list of creditors and the estimated amount of their claims. The business of the creditors’ meeting is to be gathered from ss. 239 and 240. Under s. 239 the creditors may nominate a liquidator, and under s. 240 they may appoint a committee of inspection consisting of not more than five persons. If a resolution is passed at the creditors’ meeting and the general meeting is adjourned, any resolution passed at the creditors’ meeting will take effect as if passed immediately after the resolution for winding up [s. 238 (5)]. (For the rules as to the conduct of such meetings see Rules 132, 134 to 136, and £38 to 143, and for the rules as to proxies see Rules 144 to 149, 151, 152 and 154). It will be noted that s. 239 gives the creditors power to nominate, not to appoint a liquidator. The reason for this is that the section confers a like power of nomination on the company exercisable at the meeting at which the resolution for winding up is passed. If both meetings nominate the same person or, subject as below mentioned, if they nominate different persons, the person nominated by the creditors will be liquidator. If, however, the creditors nominate no one, the person nominated by the company will be liquidator. If different persons are nominated by the company and the creditors, any director, member or creditor, may within seven days after the date on which the creditors’ nomination was made, apply to the Court for an order directing that the company’s nominee be liquidator instead of or jointly with the creditors’ nominee, or that some third person be appointed liquidator in place of the creditors’ nominee. It will be noted that this application cannot be made by the company, and the applicant will therefore have to bear his costs personally unless the Court otherwise directs. In a creditors’ liquidation, unlike a members’ liquidation, only one person can be appointed liquidator unless a joint liquidator is appointed by the Court. Any vacancy in the office of the liquidator may be filled by the creditors unless the liquidator was appointed or nominated by the Court [s. 242]. As in a members’ voluntary winding up, the powers of the directors can only be exercised after the appointment of a liquidator 4) Liquidator in Creditors’ Winding Up. 236 SECRETARIAL PRACTICE with express sanction. The sanction required is that of the committee of inspection, or if there be no committee, that of the creditors instead of the sanction of the company in general meeting or the liquidator [s. 241 (2)]. Committee of A committee of inspection can be appointed either at the Sapesiion In creditors’ meeting convened pursuant to s. 238, or at any reditors’ . . : X Winding Up. Subsequent meeting of the creditors. If the creditors appoint a committee of inspection, the company may appoint not more than five persons to act as members of such committee, either at the meeting at which the resolution for winding up is passed, or at any subsequent general meeting; but the creditors may resolve that all or any of the members of the committee appointed by the company ought not to be members thereof, and if the creditors do so resolve, the persons mentioned in the resolution will, unless the Court otherwise directs, be disqualified from acting as members of the committee [s. 240]. It is possible that a member thus disqualified can be replaced by another representative under the provisions of s. 199 (see below); but it is doubtful whether this is so, as the section enables the Court on any application under the section itself to appoint other persons to act as members of the committee in place of the disqualified members. Subject as above and subject to the Winding-up Rules, the provisions of ss. 19g (except sub s. (1)) and 201 of the Act (which sections deal with committees of inspection in a winding up by the Court) apply to a committee of inspection appointed in a voluntary winding up. Under these sections the Committee will meet at such times as they from time to time appoint, and, failing such appointment, must meet at least once a month. The liquidator, or any member of the committee can at any time call a special meeting. The Committee act by a majority, but a majority must be present to constitute a quorum. Any member of the Committee may resign, and he will automatically vacate office if he becomes bankrupt, makes an arrangement with his creditors or is absent from five consecutive meetings without the leave of those members of the committee, who, together with himself, represent the creditors or contributories. A creditors’ representative may be removed by a meeting of the creditors and a company’s representative by an extraordinary resolution of the company in general meeting. Any vacancy among the creditors’ representatives can be filled by the creditors, and any vacancy among the company’s representatives can be filled by the company in general meeting; and it is the duty of the liquidator forthwith to convene the necessary meeting on a vacancy occurring. If the committee falls WINDING UP 237 below two in number, it cannot function. Rule 159 of the Winding-up Rules of 1929, forbids a purchase of any of the company’s assets by or on behalf of a member of the committee without leave of the Court, and Rule 161 forbids a member of the committee directly or indirectly to make any profit out of his office, except under the Court’s sanction. If several liquidators are appointed, the powers conferred on a liquidator by s. 248 may be exercised by such one or more of them as may be determined at the time of their appointment or in default of such determination by any number not less than two [s. 248 (3)1. The remuneration of a liquidator in a members’ voluntary winding up may be fixed by the company in general meeting either when the liquidator is appointed or subsequently (s. 232 (1)]; in a creditors’ voluntary winding up the committee of inspection, or if there be none, the creditors may fix the remuneration [s. 241 (1)]. In either case the Court can be asked to fix the remuneration under the joint effect of ss. 252 and 188 (2), e.g. where the creditors think the committee have allowed too much. The remuneration may be a lump sum, or a percentage on the assets, or may be at the rate of so much per day or per hour spent exclusively on the liquidation; or other methods of remuneration may be adopted. It is generally inadvisable to fix the liquidator’s remuneration at the time of his appointment, as the amount of work involved cannot be known: but this objection does not apply so strongly in the case of a members’ voluntary liquidation for the purpose of reconstruction where the work involved can be fairly estimated and the liquidator will probably be an officer of the old company and become an officer of the new company and will often be remunerated by the payment of a moderate lump sum. If application is made to the Court, it will in general adopt the scale applicable to trustees in bankruptcy [Carton (1923), 39 T.L.R. 194]. In some cases under the Act of 1908, the Court has increased the remuneration allowed by the company. A course sometimes adopted is for the liquidator to take what he considers reasonable remuneration, and then, when his final accounts are passed at the final meeting (see below), that sum, if approved, is by the vote of the company appropriated to him. Rule 158 forbids a liquidator to accept any gift, remuneration, consideration or benefit from any solicitor, auctioneer or any other person connected with the company or employed in connection with the winding up, beyond the remuneration to which he is entitled, or to make any arrangement for giving up anv of his Joint Liquidators. Remuneration of a Liquidator. 238 SECRETARIAL PRACTICE remuneration to any such solicitor, auctioneer or other person. Rule 159 forbids him to purchase any of the company’s assets without leave of the Court, and Rule 160 forbids him, when carrying on the company’s business, without the express sanction of the Court to purchase goods for carrying on the business from any person whose connection -with him is such as to result in his obtaining any part of the profit arising from the transactions. Service of By Rule 23, all notices, summonses and other documents, Notices, ete. other than those of which personal service is required, may be sent by prepaid post letter to the last known address of the person to be served therewith; and the notice, summons or document is to be considered as served at the time when the same ought to be delivered in the due course of post by the post office, and notwithstanding the same may be returned by the post office. Although in a compulsory liquidation the books of a company close at once, it may be, and often is. otherwise in a voluntary liquidation. A negative effect of a voluntary winding up is that it does not operate to stay actions, as a compulsory order or a supervision order does, nor does it prevent actions being brought against the company after the commencement of the voluntary liquidation. It is, however, always open to the liquidator to apply to the Court for a stay and it used to be the practice for a stay to be granted, except in the case of actions by secured creditors to enforce their security. The plaintiff would then, the stay having been granted, prove in the liquidation, and where the liquidator did not admit the claim he would himself apply to the Court, under s. 138 of the Act of 1862 (now s. 252), to have the matter in dispute decided. But in Currie v. Consolidated Kent Collieries [(1906) 1 K.B. 134)] it was held that the onus is upon the liquidator in applying for a stay to show that an order should be made, and that in case of a real dispute a stay should not be granted, and that, so far from a stay being a convenience, it would in such cases be an unnecessary waste of time and money. But in a case where liability is substantially admitted, and the question is really one of amount, the matter is one which may properly be dealt with in the liquidation, and accordingly a stay should be granted. The matter is in each case one for the discretion of the Court. It should be noticed that by s. 255, a voluntary wind‘ng up is not to bar the right of any creditor or contributory to have the company wound up by the Court, but in the case of an application by a contributory the Court must be satisfied WINDING UP 239 that the rights of the contributories will be prejudiced by ¢ voluntary winding up. It is not easy to define accurately the status of the liquida- Position of tor. It is to be gathered from the following statutory pro- & Liguidator. visions, some of which have already been mentioned: — That liquidators are appointed for the purpose of winding up the affairs of the company and distributing its property [ss. 232 (1), 239]; that they shall pay the debts of the company and adjust the rights of the contributories amongst themselves 's. 247]; that upon their appointment all the powers of the directors cease, except so far as the continuance thereof may be sanctioned in accordance with s. 232 (2) or s. 241 (2); and that until the winding up is complete the corporate state and all the corporate powers of the company continue [s. 228]. The company then continues to exist, but the directors subject to the exceptions mentioned) cannot act, whilst the liquidator has the duty of winding up the company’s affairs. The liquidator steps into the shoes of the directors, not for carrying the company’s business on, but for winding it up, although he may carry it on so far as is necessary for the beneficial winding up [s. 227]; and his status resembles in many ways the former position of the board. Now, directors, as is well known, have a dual capacity—they are both agents and trustees. The liquidator is in a certain sense a trustee. He may be said to hold the assets of the company in trust for the creditors and then for the shareholders. But his primary duty being to realise and distribute, he is, perhaps, rather the company’s agent for certain specified purposes [Knowles v. Scott (1891), 1 Ch. 717]. A contract for example, made by him for the purpose of realising some of the company’s assets is made by the company through him, the common form of the statement of parties being: ‘Between the——Company, Limited, by J—— S——, of——, &c., the liquidator thereof, of the one part, and A—— B——, of——, &c., of the other part.’ It may, further, be observed that the voluntary liquidator, being appointed by the shareholders, is not an officer of the Court, although he has certain duties imposed on him by statute, and if he neglects those duties the parties injured, whether creditors or contributories, may be able, if the winding up is still in progress to compel the liquidator to make good to the assets of the company the damage he has done, by a misfeasance summons under s. 276 [Windsor Steam Coal Co. (1929), 1 Ch. 151; Home & Colonial Insurance Co. (1930), 1 Ch. 102], or if the company has been dissolved to make him personally liable in an action for damages [see Pulsford v. Devenish (1903), 2 Ch. 6257 His Powers. 240 SECRETARIAL PRACTICE As regards the powers of ‘the liquidator in voluntary winding up, it will be sufficient to enumerate them. They are, in general, so inextricably involved with his duties that comment on them may be reserved until his duties are more fully dealt with. By s. 248 the liquidator has power, without any sanction, to exercise all the powers given to a liquidator in compulsory winding up, except (1) the power to pay any class of creditors in full and (2) the power to make such compromises and arrangements as are mentioned in paragraphs (¢) and (f) of s. 191 (1). He may accordingly under s. 189 take all the property of the company into his custody; under s. 191 appoint a solicitor and bring or defend any action in the name of the company; carry on the business of the company, so far as may be necessary for its beneficial winding up; sell the whole of its real and personal property; execute deeds and other documents, and use the company’s seal; prove as creditor in the bankruptcy of any contributory; draw bills and raise money upon the security of the assets of the company; take out letters of administration to any deceased contributory; appoint an agent to do any business which he is unable to do himself; do all such other things as may be necessary for winding up the affairs of the company and distributing its assets. Under s. 248 he may summon general meetings, settle the list of contributories, make calls, pay debts, and adjust the rights of the contributories amongst themselves; under s. 252 apply to the Court; and under s. 276 institute misfeasance proceedings. He may exercise the above-mentioned powers of paying any class of creditors in full and making compromises and arrangements, in the case of a members’ voluntary winding up with the sanction of an extraordinary resolution of the company, and, in the case of a creditors” voluntary winding up with the sanction of (a) the like resolution, and (b) either the Court or the committee of inspection. Under the corresponding section of the Act of 1go8 (s. 214) it was held that a compromise with a creditor under that section, unless set aside, is binding even though the sanction of an extraordinary resolution has not been .obtained [Cycle-makers Company v. Sims (1903), I K.B. 477], and semble, this decision will apply to a'compromise made without the sanction required by s. 248; but if a liquidator makes a compromise without the sanction required by the Act, he does so at his own risk and if the compromise is held to have been improper, will be liable to misfeasance proceedings under s. 276 [Windsor Steam Coal Co. (1929), 1 Ch. 151]. The above are the principal powers expressly conferred WINDING UP 241 by statute upon the liquidator, but it will be found that incidentally the wide powers expressly specified by the legislature include numerous minor auxiliary powers. A liquidator should enter upon his duties at the earliest His Duties. possible moment after his appointment. His primary duties are realisation and distribution of assets, and all that he does will be directed towards these two ends. One of his earliest duties is prescribed by s. 250 of the Act. By s. 250 he is bound, under a penalty of £5 per day, within twenty-one days of his appointment to deliver a notice thereof to the Registrar in the form prescribed by the Board of Trade; and, as already mentioned, he must see that the winding up resolution has been duly advertised in accordance with s. 226. The liquidator, after his appointment, will immediately proceed to take possession of the company’s books and documents. If he is the secretary, he will, probably, have no difficulty in doing this, as, so far as the books kept at the registered office of the company are concerned, they will he ready to hand, whilst, if the company is a trading company, the ordinary business books will be available at the place where the company’s business has actually been carried on. If the liquidator is unconnected with the company, e.g. a chartered accountant, his labour in ascertaining that he has control of all the books and documents of the company, whether at the registered office or elsewhere, will usually be greater. It is the duty of the liquidator, if he finds any book or document missing, to ascertain its whereabouts, or, if he fails to discover books or documents that he would expect to find, to make inquiries and satisfy himself as to their existence or non-existence. Practically all of the company’s books will be of assistance to the liquidator in the discharge of his duties. For example, the Seal Book, if one be kept, should contain particulars of documents to which the common seal has been attached, and will be of use in enabling the liquidator to ascertain what documents of importance are in existence. [n taking possession of the books and documents of the company, the liquidator may find that some are in the possession of a solicitor or other person who claims a lien upon them for money due. The liquidator will then proceed to inquire whether this lien is valid. If it is obviously invalid, e.g. if it is upon certain books which are, by statute, required to be kept at the registered office of the company— the Register of Members, for instance—the liquidator must insist upon the delivery up to him of the books or documents in question. If the validity of the lien be doubtful, and no Taking Possession of Property 242 SECRETARIAL PRACTICE reasonable compromise can be arrived at, the question will have to be decided, the obvious course being for the liquidator to apply to the Court, under s. 252 of the Act, for an order for the delivery up to him of the documents, when the Court will adjudicate upon the matter. But in the meantime, if the possession of the documents is necessary for the purposes of the winding up, it is advisable for the liquidator to pay the amount claimed to an independent third party, or to a joint account, pending the decision of the question, and thus to obtain delivery. If the lien appears, on due examination, to be valid, and the documents are necessary, the liquidator should if possible pay the amount due, or undertake to do so, out of the first available assets. If the lien is claimed by a solicitor, it may be desirable to have the bill taxed, delivery being generally obtained by paying the money claimed into Court, pending the taxation. After taking possession, or taking all needful and possible steps towards taking possession, of the company’s books and documents, the liquidator will then obtain possession, as far as he can, of the other property of the company. This does not mean, of course, that he is to have the land and buildings (if any) of the company conveyed to him, or any of the chattels of the company formally made over to him. He will take possession by assuming the control over them. For example, he will assume the control of the company’s business, putting himself into the position formerly occupied by the company. He will assume the control of the company’s stock and other assets of its business, thus virtually stepping into the shoes of the company. It must never be forgotten that the corporate state and all the corporate powers of the company still continue, the liquidator being, as stated before, the company’s agent for the purpose of winding up its affairs. The liquidator, however, cannot assume the control of some of the company’s property, or in any way obtain physical possession of it. He can, e.g. have no physical control over the book debts of the company, or of any property of the company which has been taken possession of, as is frequently the case, by mortgagees, or by a receiver on their behalf. His duty in these cases is to give notice to the debtors, or the mortgagees, or receiver, as the case may be, of the fact that the company is in voluntary liquidation. and that he is the liquidator. Disclaimer In taking possession, special care is necessary in the case of of Onerous leasehold property. If the company is insolvent, it is neces-Property. o5rv to inquire whether the retention of the leaseholds is WINDING UP 2472 for the benefit of the winding up. This will depend very largely upon the nature of the covenants in the lease. If the rent is high and the covenants onerous, the value may be small, and on the property being retained the landlord will be entitled to be paid rent in full during the liquidation. Under the Act of 1908, the only alternative open to the liquidator was to notify the landlord of his intention to abandon the premises in which case the landlord could only prove in the liquidation with the other creditors for rent accruing during the liquidation and future rent. Under the Act of 1929, however, the liquidator is given the power of disclaimer of leaseholds, and other onerous property analagous to that which a Trustee in Bankruptcy has under the Bankruptcy Act, 1914 [s. 267]. That section provides that where any part of the property of a company which is being wound up consists of land of any tenure burdened with onerous covenants, of shares or stock in companies, of unprofitable contracts or of any other property that is unsaleable, or not readily saleable, by reason of its binding the possessor thereof to the performance of any onerous act, or to the payment of any sum of money, the liquidator, notwithstanding that he has endeavoured to sell or has taken possession of the property or exercised any act of ownership in relation thereto, may, with the leave of the Court, but subject to the provisions of the section, by writing signed by him disclaim the property. It will be noted that the leave of the Court is essential prior to the disclaimer and notice of disclaimer must be in writing signed by the liquidator. Moreover, notice of disclaimer must be given within 12 months after the commencement of the winding up, or such extended period as the Court may allow, unless the properties which it is desired to disclaim do not come to the knowledge of the liquidator within one month after the commencement of the winding up, in which case the period within which the notice of disclaimer must be given is calculated from the date on which the liquidator became aware of the property. By sub-s. (2) the disclaimer operates to determine as from the date of disclaimer the rights interest and liabilities of the Company and the property of the company n or in respect of the property disclaimed, but does not, except so far as is necessary for the purpose of releasing the company and the property of the company from liability, affect the rights or liabilities of any other person. In order that persons interested may not be left in doubt as to the intentions of the liquidator sub-s. (4) provides that any interested person may make application to the liquidator in writing requiring him to decide whether he will or will not disclaim and that if he has 244 SECRETARIAL PRACTICE Keeping Accounts. not within 28 days after receipt of such application or such further period as the Court may allow given notice to the applicant that he intends to apply to the Court for leave to disclaim and that, in the case of a contract, if the liquidator, after such an application as aforesaid, does not within the said period or further period disclaim the contract the company shall be deemed to have adopted it. It would appear that if the liquidator desires an extension of time within which to give notice of disclaimer he must apply to the Court for such extension within the above-mentioned period of 28 days [exp. Lovering, 9 Ch. Apps. 586, re Richardson, 16 Ch. D. 613]. Accordingly in any application to the Court for leave to disclaim a contract, it is advisable if such an application as above mentioned has been received from a party interested to ask also for an extension of the period in which notice of disclaimer may be given. It is not clear what the effect of the words ‘The company shall be deemed to have adopted’ the contract is. In the analogous section of the Bankruptcy Act the trustee is made expressly liable. No personal liability is however, imposed on the liquidator. There appear to be two alternatives (a) that the interested party is to have a mere right of proof, or (b) that the contract is to be treated as if it had been made by the liquidator on behalf of the company in the course of carrying on its business in which case the interested party would be entitled to be paid in full. Probably the latter is the correct interpretation. A liquidator who has to consider the question would be well advised to obtain the decision of the Court and not act on his own interpretation of the section. The section contains other provisions enabling the Court, either before or on granting leave to disclaim, to require notices to be given to interested parties, and enabling any interested person to apply to the Court to make an order rescinding the contract on terms or vesting in the applicant or directing the delivery to him of any disclaimed property. The consideration of this section is however beyond the scope of this book but the decisions on s. 54 of the Bankruptcy Act, 1914, afford some guide to the application of this section. It should be added that by sub-s. (7) any person injured by the operation of a disclaimer shall be deemed a creditor of the Company to the amount of the injury and may prove the amount as a debt in the winding up. The section does not apply in the case of a winding up in Scotland [s. 267 (8)]. An important duty of the liquidator is the duty of keeping proper accounts. It is nowhere laid down that a liquidator in voluntary winding up must keep accounts, but Rule 170 (3) of the Companies (Winding up) Rules. 192g provides that in WINDING UP 245 a creditors’ voluntary winding up the liquidator shall keep such books as the committee of inspection or if there is no such committee as the creditors direct and that all books kept by the liquidator shall be submitted to the committee or the creditors with any other books, documents, papers and accounts in his possession, relating to his office as liquidator or to the company as and when the committee or the creditors direct. Moreover, under s. 284, if the winding up is not concluded within one year, the liquidator must send to the Registrar at the prescribed intervals a statement in the prescribed form containing the prescribed particulars with respect to the proceedings in and position of the liquidation as to intervals, forms and particulars [see Rule 194 of the Companies ‘Winding up) Rules, 1929]. It is, therefore, perfectly obvious that a liquidator cannot comply with this section or adequately perform his other duties without keeping accounts. Further it may here be observed that when the winding up is complete and he summons the final meeting of the company, and, if the winding up is a creditors’ winding up, of the creditors, it 1s his duty to lay before the meeting or meetings an account ‘showing how the winding up has been conducted, and the property of the company disposed of’ (ss. 236, 245). This he could not satisfactorily do without having kept thorough and systematic accounts throughout the liquidation. It is also desirable for the liquidator, in order that he may be able to give an account of his stewardship, to keep the Record Book which is prescribed by Rule 169 of 1929 in the case of compulsory winding up. In this he will enter notes of all his transactions in conducting the winding up. The book may conveniently take the form of a diary. In realising the assets the liquidator should act with all convenient speed, remembering that the longer the liquidation is protracted, the greater is the expense of the mere administration likely to be. However, in the case of a trading company with outstanding trade contracts, it will frequently be of advantage to the assets to carry out the contracts and receive the agreed payments for them. This will be carrying on the business so far as may be necessary for the beneficial winding up of the company. And in all cases where, for whatever reason, the liquidator considers it desirable to carry on the business of the company for anything more than a very short time, it is advisable for application to be made to the Court, under s. 252, for liberty to do so, or at all events for the sanction of the committee of inspection, if one has been appointed, to be obtained. The Court, in granting leave to carry on the business, usually imposes a Carrying ob Business. 246 SECRETARIAL PRACTICE Collecting Debts. limit to the time during which this may be done, e.g. three months. In the event of an extension being required, a further application must be made to the Court. The right to carry on the business involves the right to do everything incidental thereto: contracts may be made, the trade generally may be continued, bills of exchange may be drawn or accepted, and even, in a proper case, money may be borrowed for the purposes of the company, upon such security as the company is able to offer. It is generally advisable to obtain the sanction of the Court before borrowing money. It is hardly necessary to point out that any security given by the liquidator for loans ranks after all existing securities. The liquidator will, of course, make it clear to all persons with whom business is done that the company is in voluntary liquidation. In carrying on the business, the liquidator must bear in mind that every invoice, order for goods, or business letter issued by or on behalf of the company, or of the liquidator himself, must contain a statement that the company is being wound up [s. 280]. With reference to debts incurred by the liquidator in the course of carrying on the business of the company, it must be clearly borne in mind that these must be paid in priority to debts and liabilities incurred before the commencement of the liquidation. They are, in reality, provided they are properly incurred, part of the costs of the administration of the company’s affairs, which, as will be seen hereafter, have a priority over the ordinary liabilities. In getting in the debts due to the company, the liquidator will make written demands upon the debtors, and if all other means fail he will, if he considers it desirable, take proceedings for recovering debts outstanding. It is necessary, however, to consider carefully whether the proceedings are likely to be productive of any adequate result. A liquidator would not be justified in suing a debtor when he knew the debtor could in no circumstances pay. Proceedings would, in such a case, be merely a waste of the company’s money. The liquidator has also, as has been stated, power to compromise with the sanctions indicated on p. 240. We have seen that a liquidator can sell all or any of the company’s property, taking care to do so to the best advantage. Thus, he may, if he thinks it advantageous, sell the book debts instead of realising them himself. It may here be remarked that, speaking generally, the liquidator may employ agents to act for him in cases where the skill and WINDING UP 247 experience of a professional man is desirable in the interests of the company. Perhaps a fair statement is that in all cases where an ordinarily capable and reasonable individual would employ an agent, e.g. an auctioneer, or a broker, or a solicitor, the liquidator may do the same. And he may pay them reasonable remuneration for their services. It is in the case of sales of the company’s more important assets that professional services are most likely to be required; but the advice of a solicitor may often be properly sought in almost every phase of a winding up. When dealing with the company’s property and when employing agents to act for him, the liquidator should bear in mind the provisions of Rules 158 to 160 (see pp. 237 and 238 supra). In connection with the realisation of the company’s assets, the important powers conferred upon the liquidator by the combined effect of ss. 214 and 252 of the Act must be noticed. S. 214 empowers the Court to summon before it any officer of the company or person known or suspected to have in his possession any of the property of the company, or supposed to be indebted to the company, or any person whom the Court deems capable of giving information concerning the trade, dealings, affairs, or property of the company.” And any person so summoned may be required to produce books, &c. In a proper case, therefore, if the liquidator suspects that any of the company’s property is being kept back, whether by the company’s officials or other persons, or if he has reason to suppose that there has been fraud in the promotion of the company, and that certain persons have received moneys which really belong to the company, he will make application to the Court, under s. 252, for an order for the examination (called private examination, in contradistinction to the public examination in winding up by the Court) of any one who will voluntarily give, or from whom can be extracted, information as to the existence of assets, or information on which to ground misfeasance proceedings. With reference to misfeasance proceedings, these are provided for by s. 276, their object being to compel any delinquent promoter or officer of a company to make restitution of any money or property of the company improperly applied or retained, or to make good any default. If misfeasance proceedings require to be taken, the liquidator will invariably employ a solicitor, as indeed he will generally properly do in case of any application under s. 252. With reference to such applications, it must not be forgotten that, although in the majority of instances they are made by the liquidator, yet any contributory or any creditor may similarly apply. Private Examinalions. Fraudulent Preference. Execution Creditors. 24 SECRETARIAL PRACTICE Another matter must be noticed affecting the getting in of the assets of the company. S. 265 of the Act provides that where a company is being wound up, any act which would have been a fraudulent preference had the company been an individual trader in bankruptcy is an undue or fraudulent preference of the creditors of the company and is invalid. The effect of this provision is to make the bankruptcy law for the time being as to fraudulent preference applicable mutatis mutandis to companies in liquidation. In bankruptcy, by virtue of s. 44 of the Bankruptcy Act, I9I4, any conveyance or transfer of property, or any payment made by a person unable to pay his debts to any creditor, with a view to preferring that creditor to other creditors, is void if made within three months before the bankruptcy. In the case of voluntary winding up, the period of three months dates backwards from the resolution for winding up. It is incumbent upon the liquidator if, on examination of the company’s affairs, it appears that any such fraudulent preference has taken place, to take steps, by application to the Court, under s. 252, if necessary, to have the transaction set aside and get back the money or property. The question as to whether a particular transaction does or does not constitute a fraudulent preference is often a difficult one. As was stated by Lord Esher in New’s Trustees v. Hunting (1897), 2 Q.B. 27, ‘the question whether there has been a fraudulent preference depends not upon the mere fact that there has been a preference, but also on the state of mind of the person who made it. It must be shown, not only that he has preferred a creditor, but that he has fraudulently done so.” It has been held that the preferring of the creditor must be the dominant view with which the preference was made, but not necessarily the sole view. A payment made bond fide under pressure will not be a fraudulent preference. The burden is on the liquidator, who seeks to set aside a transaction as being a fraudulent preference, of showing the insolvency of the company—not as a rule a difficult task—as well as of showing the intention to prefer. S. 265 also makes void to all intents and purposes any conveyance by a company of all its property to trustees for the benefit of all its creditors. It will be noted that this provision, anlike the provision as to fraudulent preference, applies only where the conveyance is of all the property and all the creditors benefit. Another matter affecting the getting-in of the assets of the company must be noticed. Under s. 268 an execution WINDING UP 247 creditor who has not completed execution before the commencement of the winding up or, if he had notice of a meeting having been called to pass a resolution for voluntary winding up, before the date on which he had such notice, will not be entitled to retain the benefit of the execution against the liquidator, and if the liquidator finds that there has been any execution shortly before his appointment, he should inquire into the circumstances to see if the section applies. Moreover [s. 269], the liquidator can, in certain cases, obtain delivery from the sheriff of goods seized or the proceeds of sale thereof, and accordingly should inquire whether the circumstances require the giving of any notice or the service of any demand under the section. The liquidator will take steps, as soon as possible, to ascertain the extent of the company’s liabilities. In most cases the books of the company, assuming them to have been properly kept, will disclose the bulk of these, and if the liabilities have been incurred in the ordinary course of the company’s business, probably most of them can be admitted without demur. In a voluntary winding up only those creditors need prove their debts whose claims have not been admitted. The liquidator will accordingly make out a list of the claims he admits, i.e. of all the known and undisputed liabilities of the company, whether they be trade liabilities, or office expenses, or directors’ fees, or anything else. His duty is then laid down by Rule 104 of the Winding-up Rules of 1929, which requires him to fix a day, not less than fourteen days after the date of the notice, mentioned presently, on or before which creditors (i.e. in voluntary winding up, creditors whose claims have not been admitted) are to prove their debts or claims and to establish any title they may have to priority under s. 264 of the Act, or be excluded from the benefit of any distribution of assets made before their debts are proved; he is to give notice of the day fixed by advertisement in a newspaper, and, further, by sending notice in writing to each person who to his knowledge claims to be a creditor or preferential creditor and whose claim has not been admitted. The notice is ordinarily inserted in the Gazette, and in one or more newspapers circulating in the district where the registered office of the company is. One or more repetitions of the newspaper advertisement is often advisable. [n dealing with proofs the liquidator must bear in mind that (subject in the case of insolvent companies to the application in accordance with s. 262 of the Law of Bankruptcy), all debts payable on a contingency and claims present or future, certain or contingent, ascertained or sounding only in damages are Proof of Debts. 250 SECRETARIAL PRACTICE admissible to proof [s. 261]. (See Bankruptcy Act, 1914, s. 30, as to the debts which are provable in bankruptcy and therefore in the winding up of an insolvent company.) It should be oorne in mind that only debts which are legally recoverable can be provided for in a winding up, and if a liquidator admits and pays a claim, which is merely a moral obligation, however strong, on the company, he commits a misfeasance and may be compelled to make good the amount so paid, at any rate so far as the true creditors have been damaged thereby [Home & Colonial Insurance Co. (1930), 1 Ch. 102]. Rule go of the Rules of 1929 provides for the proof of debts oy affidavit, and by Rule 93 the affidavit is required to state whether the creditor is or is not a secured creditor. Most of the Rules from go to 108 contain further regulations as to the proof of debts which are applicable to voluntary winding up. When the proofs have all been lodged, the liquidator must examine them, and in writing admit or reject each, either in whole or in part, or he may require further evidence in support of it. If he rejects a proof he must notify to the creditor in writing the grounds of his rejection [Rule 105]. Any creditor dissatisfied with the decision of the liquidator may apply to the Court within twenty-one days, and the Court may reverse or vary the decision [Rule 106]. Should the liquidator himself, after admitting a proof, consider that it has been improperly admitted, he may apply to the Court, after notice to the creditor, to expunge the proof or reduce its amount [Rule 107]. A similar application may be made by any creditor or contributory [Rule 108]. In due course the liquidator will have a complete list of claims, of which some may be disputed. Disputed claims may be dealt with by the liquidator in various ways. He may compromise any claim with the sanction required by s. 248 (1), or he may apply to the Court, under s. 252, to adjudicate upon any disputed claim. Or he may leave the creditor to apply to the Court to adjudicate, or to bring an action to enforce the claim. The position of the liquidator in the matter of applying for a stay of any such action has already been dealt with above (see p. 238). In exceptional cases, where the disputed claims are likely to be numerous, the method of procedure is open to the liquidator of applying to the Court, under s. 252, for an order for an inquiry as to who are the creditors of the company. The effect of such an order is that all claims are formally proved in chambers, and disputed claims adjudicated upon where necessary by the Court. If the liquidator is in doubt as to whether he has a complete list of claims and desires to make a distribution. he WINDING UP can apply to the Court under s. 252 to exercise the power conferred by s. 210 to fix a time within which creditors must prove their debts or be excluded from any distribution made before their debts are proved. The position of secured creditors requires some explanation. By s. 262 of the Act, the provisions of the bankruptcy law as to secured creditors are applied to insolvent companies in winding up. The result is that a secured creditor of an insolvent company in liquidation may adopt one of four courses: (1) he may rely on his security and not prove at all; although, of course, should his security on realisation prove to exceed the amount of his debt, he must hand over the surplus to the liquidator; (2) he may realise his security, and if it shows a deficit, he may prove for the balance; (3) he may give up his security to the liquidator and prove for the whole debt; (4) he may assess the value of his security, and, after deducting the assessed value, prove for the balance of his debt. If he adopts the last course, the liquidator can redeem at the assessed value; or if he is dissatisfied with the assessed value, require -the property to be sold [Bankruptcy Act, 1914, 2nd schedule, para. r3]. A creditor can, however, amend his valuation and proof under para. 13 of that schedule on showing to the satisfaction of the liquidator, or the Court, that the valuation and proof were made bond fide on a mistaken estimate, or that the security has increased or diminished in value since its previous valuation. An important duty of the liquidator arises in connection with secured creditors. The bulk of secured creditors of a company are ordinarily debenture holders, that is to say, creditors of the company whose debts are secured in most instances by a mortgage or charge upon the whole undertaking of the company, including, generally, its uncalled capital. The liquidator must ascertain whether the debentures were validly issued, and whether they are duly registered in cases where registration is required, remembering that, should the security turn out to be invalid, the unsecured creditors will receive the benefit of it with the debenture holders, who in such a case would be themselves, really, ansecured creditors. The question of what is the best policy for the liquidator to adopt, where the whole of the company’s assets are mortgaged to debenture holders, is often one of extreme difficulty, and sometimes it happens that a Scheme of Arrangement under s. 153 (see p. 222) is the best solution. [t is also within the province of the liquidator to investigate the validity or otherwise of any security held by any secured creditor, other than debenture holders. In this connection. Secured Creditors. 252 SECRETARIAL PRACTICE s. 265 as to fraudulent preference (see above p. 248), and s. 266 must not be overlooked. By the latter section a floating charge, given within six months before the commencement of the winding up, is invalid except to the amount of any cash paid to the company at the time of, or subsequently to the creation of, and in consideration for, the charge, with interest at 5 p.c. on that amount, unless it be proved that the company was solvent immediately after the creation of the charge. This the person claiming under the charge must prove. The liquidator must carefully investigate the circumstances in the event of his finding that such recent charges exist. If the money is paid on account of the consideration for the charge and in anticipation of its creation and in reliance on a promise to execute it, it may be paid at the time of its creation within the section, although the charge is not actually executed till later unless the debenture holder has procured, or suggested, or acquiesced in the delay [F. & E. Stanton, Ltd., (1929), 1 Ch. 180]. Although a charge given in the circumstances above mentioned is declared invalid by the section, the instrument creating it is not avoided altogther, and if the debt secured by the charge has already been paid by the company it cannot be recovered by the liquidator unless the payment is impeachable as a fraudulent preference [re Parkes Garage (Swadlingcote) (1929), 1 Ch. 139]. Assuming that the liquidator has at length ascertained the extent of the company’s liabilities and of its assets, he will be able to determine what further steps are necessary in the winding up. If the assets exceed the liabilities and the costs of winding up, he will be able to pay the debts and expenses of winding up, and will then distribute any surplus assets amongst the shareholders in accordance with their rights. But if the company is insolvent, or if the liabilities, including the costs of the liquidation, exceed the assets, it will be his duty to increase the assets, if possible, by calling up the whole or part of the unpaid capital. If the whole of the capital is fully paid, no further sum can be raised from the shareholders, except in cases where the articles of association of a company provide for such further payments, e.g. in companies limited by guarantee. But if the capital is not fully paid, the duties of the liquidator as regards settling lists of contributories and making calls must be undertaken. Lists of Con- It must not be assumed that the liquidator will take no tributories. steps towards settling the lists of contributories until he has accurately ascertained the amount of both assets and liabilities. In many cases he will be able to determine whether or not calls upon the contributories will be required long before WINDING UP he knows the precise financial position of the company, although he will generally not proceed actually to make calls until he knows approximately how much is required to be called up. It may in some cases be obvious at the outset that every farthing of unpaid capital will be wanted, and in these cases the work of settling the list of contributories and making calls can be taken in hand at once. S. 248 gives the liquidator in voluntary winding up the same powers as the Court in the matter, and provides that ‘any list so settled shall be primd facie evidence of the liability of the persons named therein to be contributories.’ A contributory is defined by s. 158 of the Act as a person liable to contribute to the assets of a company in the event of its being wound up. The term also includes any person alleged to be a contributory before his liability as such is finally determined. It has been held that the very wide words ‘person liable to contribute to the assets of a company, %c.,” do not include debtors to the company, but only past and present members who are liable to contribute. On the other hand, the word ‘contributory’ includes a fully paid shareholder, although he cannot be placed on the list of contributories against his will. And it may be stated that the term ‘contributory’ is used in winding up, broadly but inaccurately, as being synonymous with shareholder. There are two lists of contributories, commonly called the A List’ and ‘B List.” The ‘A’ list contains the names of existing members of the company who are liable to contribute, and the ‘B’ list the names of such past members as are liable to contribute. The liabilities of both classes are regulated by 5. 157 of the Act, the effect of which may be summarised as follows: Existing members are primarily liable to contribute to the extent of the amount unpaid on their shares, or it the company is limited by guarantee, to the extent of their guarantee; if the amount is insufficient, then, and only then, are past members liable to contribute, but subject to the restrictions that a member who has ceased to be a member for a year or more before the commencement of the winding up cannot be made liable, that no past member is liable to contribute in respect of debts incurred after he ceased to be a member, and that his liability is limited to the amount unpaid on the shares he held. It often happens that it is unnecessary to settle the ‘B’ list at all. The liquidator is not bound by Rules 78 to 83, since they apply only to compulsory winding up, but in practice he will generally follow the procedure there indicated. His ‘A’ list will be in two parts, the first part containing contributories in their own right. i.e. 254 SECRETARIAL PRACTICE Set-off, the beneficial holders of shares in the company, and the second part containing contributories other than in their own right, e.g. as executors or administrators of deceased shareholders, or as trustees of bankrupt shareholders. The ‘B’ list, if any, will similarly be in two parts. After making out the lists, the liquidator will fix a day for settling them, giving notice to each person whose name has been inserted therein of the time and place and of the particulars in the list referring to such person, and stating that if no sufficient cause is shown to the contrary, the list will be settled to include him therein. At the time fixed the liquidator will hear objections and either decide them on the spot or hold them over for further consideration. As regards objections, legal advice is commonly indispensable. The liquidator may either, after due consideration of the case, place the name of the objector on the list as settled, and leave him to apply to the Court under s. 252 as a contributory for rectification of the list or of the register, or he may himself apply to the court for a declaration of liability. The usual course is for the liquidator to settle the name on the list and leave the contributory to his remedy. Having settled the lists, the liquidator will proceed to make such calls as may be necessary. Here may conveniently be noticed the power which the liquidator has of enforcing the payment by contributories of sums due from them before the winding up, whether in respect of calls or other matters. By the combined effect of s. 205 and s. 252 of the Act, he may apply to the Court for an order upon contributories to pay any such sums due from them. Orders of this kind are called balance orders. Balance orders may be enforced by writ of execution by virtue of s. 373 of the Act. A balance order is, however, not a judgment, and accordingly does not extinguish the right of action for calls. Nor can an action be brought upon the order, as upon a judgment, nor a bankruptcy notice be issued in respect of it. In practice, orders are sometimes made for payment, not only of calls made before the winding up, but also of calls made during the winding up. The doctrine of set-off in winding up must be briefly dealt with at this point. A set-off is a placing a debt against a credit, and striking a balance, the payment of which balance will settle both transactions. It is an ordinary reasonable business transaction to simplify the adjustment of mutual accounts. Thus, if A owes B £15, and B owes A £10, obviously both debts can be adjusted by A paying B £5. So. in the WINDING UP 255 case of a company not being wound up, if there is due from a shareholder to the company £100 in respect of calls, while the company owes the shareholder [75 for goods supplied, both transactions may properly be closed by the shareholder paying £25 to the company. But in winding up the rule is different. A contributory cannot set off a debt due to him from the company against money due from him to the company in his capacity of contributory, e.g. for calls. He must first pay what, as a contributory, he owes the company, since the company’s assets must be realised, and then his position will be that of a creditor of the company who is entitled to be paid with the other creditors, in full if funds permit, but otherwise to receive a dividend. Any other rule would give preferential treatment to the contributory who, by the accident of circumstances, is also a creditor of the company. However, when the contributory is a bankrupt, set-off is allowed. Thus, the liquidator, seeking to prove in the bankruptcy for calls due, must first deduct from the amount of the calls the amount owing from the company, and prove for the balance. And conversely, where the debt due from the company exceeds the amount of the calls, set-off is allowed and the balance due to the bankrupt’s estate may be proved for in the winding up. But when all the creditors of a company are paid in full, any sum due to a contributory from the company on any account whatever may be allowed to him by way of set-off against any subsequent calls [s. 205 (3)]. A joint debt cannot be set off against a separate debt [In re Pennington and Owen, Ltd. (1925), 41 T.L.R. 657]. Some of the incidental duties of the liquidator which he may have been called upon to perform before all the assets have been realised, require a passing notice. It may be necessary or desirable for him to summon general meetings of the company from time to time. S. 248 (1) of the Act empowers him to do so for the purpose of obtaining the sanction of the company by special resolution or extraordinary resolution, or for any other purpose he may think fit. There may often be important steps in the winding up upon which the liquidator may deem it advisable to take the opinion of the company before acting. When a meeting is to be called, the liquidator will summon it in the usual way by notices in writing stating the objects of the meeting. Ss. 235 and 244 make it incumbent upon the liquidator, in all cases where the winding up continues for more than a year, to summon a general meeting of the company at the end of the first and of every subsequent year from the commencement of the winding up; and at every such meeting he must lay before the Meetings in Liquidation. 256 SECRETARIAL PRACTICE Periodical Returns. shareholders ‘an account of his acts and dealings, and of the conduct of the winding up during the preceding year.” In the case of a creditors’ winding up an annual meeting of creditors must also be called for the same purpose (s. 244). Under Rule 125 (2) the liquidator in a creditors’ voluntary’ winding up may from time to time summon, hold and conduct meetings of creditors for the purpose of ascertaining their wishes in all matters relating to the winding up. In addition to the meetings already mentioned, which are summoned by the liquidator, the Court may, by virtue of ss. 288 and 252 of the Act, direct meetings of creditors or contributories to be summoned, with the object of ascertaining their wishes in any matter. Any resolution passed at any adjourned meeting is to be treated as having been passed on the date on which it was actually passed and not on the date of the original meeting [s. 287, and see p. 140]. The rules regulating the summoning and conduct of the above-mentioned creditors’ meetings are contained in Rules 126 to 143 of the Winding-up Rules of 1929, and provisions in regard to proxies at meetings of creditors in a creditors’ voluntary winding up are contained in Rules 144 to 154. The liquidator is bound, by s. 284, in all cases where the liquidation is not concluded within a year, to send periodical statements to the Registrar of Joint Stock Companies in the form presented by the Board of Trade. If, it appears, from any such statement or otherwise that the liquidator has in his hands or under his control any unclaimed or undistributed assets, which have remained unclaimed or undistributed for more than six months, he must pay the same forthwith into the companies liquidation account (s. 285). Directions as to the dates on which, and the method in which, that payment is to be made are contained in Rule 196 of the Companies (Winding-up) Rules, 1929. By Rule 197 a liquidator is bound to furnish to the Board of Trade particulars of any money in his hands, or under his control, representing unclaimed or undistributed assets, and any other particulars which the Board of Trade may require for the purpose of ascertaining and getting in any money payable into the companies liquidation account. This rule applies whether the liquidation has been concluded or not. By Rule 198, the Board of Trade may order an account of the sums received and paid by the liquidator and may enforce an audit of the account. As to the investment at the request of the committee of inspection or liquidator of funds standing to the credit of a company in the companies liquidation account, see s. 302 and Rule 171 of the Companies (Winding-up) Rules 1929. WINDING UP Under the Act of 1908, the liquidator had power with the sanction of the Court to prosecute any past or present director or officer for any suspected offence in relation to the company; but while the costs of any such prosecution could be made payable out of the assets of the company, there was no power to direct the discharge thereof at the public expense. Accordingly the liquidator rarely applied to the Court for leave to commence proceedings. Under the new Act [s. 277 (2)], it is the duty of the liquidator in a voluntary winding up if he considers that any past or present director, manager or officer, or any member of the company, has been guilty of any offence in relation to the company for which he is criminally liable to report the matter at once to the Director of Public Prosecutions and give him all information in his power relating to the matter. The Director of Public Prosecutions may refer the matter to the Board of Trade for further enquiry; but he is under no obligation to do so. Whether he does so or not, he may, if he considers (a) that the case is one in which a prosecution ought to be instituted, and (b) that it is desirable in the public interest that the proceedings in the prosecution should be conducted by him, institute proceedings himself, and the liquidator and every officer and agent of the company past and present other than the defendant must give him all assistance within their power. If the Director of Public Prosecutions commences the proceedings, the costs of the proceedings will of course be defrayed at the public expense. [t will be noted, however, that the Director may only prosecute if the two above-mentioned conditions are fulfilled. If he is not satisfied that the case is one in which he ought to commence proceedings it is his duty to inform the liquidator accordingly, and thereupon the liquidator may himself commence the proceedings, but only with the previous sanction of the Court. If the proceedings are commenced by the liquidator, with the sanction of the Court, the costs and expenses of the proceedings will not of course be borne by him personally ; the Board of Trade is empowered by sub-s. (8) to defray such costs and expenses; if the Board does not exercise this power, the costs will, subject to any direction given by the Court and to any mortgages or charges on the assets of the Company and to any debts entitled to preferential payment under s. 264, be payable out of the assets of the company in priority to all other liabilities. It may here be noted that the category of criminal offences in relation to a company has been greatly extended by the new Act [see ss. 271 to 275]. Itis not considered necessary to set out these sections in detail, but it may be mentioned that Report by Liquidator of Suspected Criminal Offences. 258 SECRETARIAL PRACTICE the list of offences includes such matters as the following: — Failure to disclose to the liquidator any property of the company. Failure to deliver up to the liquidator property books or papers. Concealment or fraudulent removal of any property of the value of £10 or upwards. Making any material omission in any statement of affairs. Concealment or falsification in any book or paper. Making false entries in any book or paper. Obtaining property on credit by fraud within twelve months before commencement of winding up. Making any transfer of property with intent to defraud creditors. Distribution of Assets. Omitting to keep proper books of account throughout the period of two years immediately preceding commencement of the winding up. Carrying on any business of the company with intent to defraud creditors or for any fraudulent purpose. Only directors of the company, as defined by s. 275 (5), can be convicted of the last-mentioned offence. If it appears that any business of the company has been carried on fraudulently within the section, the Court may declare that any of the directors past or present, who were knowingly parties to the fraud shall be personally responsible, without any limitation of liability for all or any of the debts or other liabilities of the company as the Court may direct. The duty of the liquidator in distributing the assets may now be considered. Where the assets are insufficient to pay in full the liabilities of the company and the costs of the liquidation, the liquidator must be careful to observe the legal priorities. The first payments to be made are payments of the expenses of the liquidation, for s. 254 of the Act enacts that ‘all costs, charges, and expenses properly incurred in the winding up, including the remuneration of the liquidator, shall be payable out of the assets of the company in priority to all other claims.” The expenses will, of course, include legal expenses properly incurred. Whether or not a solicitor’s bill should be taxed is, in a voluntary winding up, a matter for the liquidator to consider; if he requires it to be taxed he must apply to the Court, as usual, under s. 252. In a compulsory winding up the matter must be referred to the Registrar, pursuant to Rule 192 of the Winding-up Rules. It will be noticed that the liquidator’s own remuneration is WINDING UP ~~ 4 wn expressly included amongst the expenses. Payments on account of expenses may be made by the liquidator from time to time out of any funds in his hands. After the expenses, the company’s debts must be paid, and, first, it is to be observed that the right of the Crown, by virtue of its prerogatives, to be paid in priority to all other creditors, has been held to have been superseded by legislation, and its only existing right to priority is that conferred by s. 264 (1) (a) (see below) [Food Controller v. Cork (1923), A.C. h47]. Hence the first creditors to be paid are now those to whom priority is given by s. 264, which section is as follows :— 264.—(1) In a winding up there shall be paid in priority to all other debts— fa) All parochial or other local rates due from the company at the relevant date and having become due and payable within twelve months next before that date, and all assessed taxes, land tax, property or income tax assessed on the company up to the fifth day of April next before that date, and not exceeding in the whole one year’s assessment ; All wages or salary (whether or not earned wholly or in part by way of commission) of any clerk or servant in respect of services rendered to the company during four months next before the relevant date, not exceeding fifty pounds; All wages of any workman or labourer not exceeding twenty-five pounds, whether payable for time or for piece-work, in respect of services rendered to the company during two months before the relevant date; Provided that where any labourer in husbandry has entered into a contract for the payment of a portion of his wages in a lump sum at the end of che year of hiring, he shall have priority in respect of the whole of such sum, or a part thereof, as the Court may decide to be due under the contract, proportionate to the time of service up to the relevant date; Unless the company is wound up voluntarily merely for the purposes of reconstruction or of amalgamation with another company, or unless the company has at the commencement of the winding up under such a contract with insurers as is mentioned in section seven of the Workmen's Compensation Act, 1925, rights capable of being transferred to Preferential Payments. ) A Bg! SECRETARIAL PRACTICE and vested in the workman, all amounts due in respect of any compensation or liability for compensation under the said Act, accrued before the relevant date. Unless the company is being wound up voluntarily merely for the purposes of reconstruction or of amalgamation with another company, all amounts due in respect of contributions payable during the twelve months next before the relevant date by the company as the employer of any persons under either— (i) the National Health Insurance Acts, 1924 to 1928; or (ii) the Widows’, Orphans’ and Old Age Contributory Pensions Act, 1925; or (iii) the Unemployment Insurance Acts, 1920 to 19209. z) Where any compensation under the Workmen’s Compensation Act, 1925, is a weekly payment, the amount due in respect thereof shall, for the purposes of paragraph (4) of sub-s. (1) of this section, be taken to be the amount of the lump sum for which the weekly payment could, if redeemable, be redeemed if the employer made an application for that purpose under the said Act. Where any payment on account of wages or salary has been made to any clerk, servant, workman or labourer in the employment of a company out of money advanced by some person for that purpose, that person shall in a winding up have a right of priority in respect of the money so advanced and paid up to the amount by which the sum in respect of which that clerk, servant, workman or labourer would have been entitled to priority in the winding up has been diminished by reason of the payment having been made. (4) The foregoing debts shall— (a) Rank equally among themselves and be paid in full, unless the assets are insufficient to meet them, in which case they shall abate in equal proportions; and In the case of a company registered in England so far as the assets of the company available for payment of general creditors are insufficient to meet them, have priority over the claims of holders of debentures under anv floating charge WINDING UP 261 created by the company, and be paid accordingly out of any property comprised in or subject to that charge. Subject to the retention of such sums as may be necessary for the costs and expenses of the winding up, the foregoing debts shall be discharged forthwith so far as the assets are sufficient to meet them, and in the case of debts to which priority is given by paragraph (e) of sub-s. (1) of this section formal proof thereof shall not be required, except in so far as is otherwise provided by general rules. In the event of a landlord or other person distraining or having distrained on any goods or effects of the company within three months next before the date of a winding up order, the debts to which priority is given by this section shall be a first charge on the goods or effects so distrained on, or the proceeds of the sale thereof: Provided that in respect of any money paid under any such charge the landlord or other person shall have the same rights of priority as the person to whom the payment is made. In this section the expression ‘the relevant date means— (a) in the case of a company ordered to be wound up compulsorily which had not previously commenced to be wound up voluntarily, the date of the winding up order; and in any other case, the date of the commencement of the winding up. If a debenture contains a fixed as well as a floating charge, the priority conferred by the section as read with s. 78, applies only in respect of the assets subject to the floating charge [Lewis Merthyr Consolidated (1929), 1 Ch. 498]. With reference to the priority of salaries and wages of clerks and servants, it has been held that a managing director is not a clerk or servant within the meaning of the section [Newspaper Proprietary Syndicate (1900), 2 Ch. 349]. And it has been held that a company’s secretary who does not give the whole of his time to the service of the company, but pays a clerk to do the bulk of the work, is not a servant so as to be entitled to priority, although in other cases he may be [Cairney v. Back (1906), 2 K.B. 746]. And there have been other decisions on particular facts. I+ would b) Surplus Assets. 262 SECRETARIAL PRACTICE seem that a person cannot claim preferential payment as a ‘workman or labourer,” unless he can prove a contract of service [General Radio Company (1929), W.N. 172]. After the above debts have been paid, the liquidator will then proceed to pay the other creditors as far as possible, by means of one or more dividends. Subject as provided by s. 157 (I) (g) as regards debts due to a member in his character of a member, e.g. for dividends declared, all creditors must be treated alike and receive a proportionate amount of their respective debts. If all creditors have been paid in full and assets still remain, then it is the duty of the liquidator, under S. 247, unless it is otherwise provided by the articles of the company, to distribute the money in hand among the members, according to their rights and interests in the company. S. 248 provides that the liquidator shall adjust the rights of the contributories among themselves, and empowers him to make calls for the purpose. The rights of the members must be ascertained from the memorandum and articles, and the available assets distributed in accordance therewith. Very difficult questions frequently arise as to how, in the particular circumstances, having regard to the provisions of the memorandum and articles, the assets should be distributed, and legal advice is often sought by the liquidator as to how he should proceed, or he not infrequently applies to the Court under s. 252. A few general principles may, however, be noticed. If the memorandum and articles are wholly silent as to the rights of members on a winding up, the liquidator’s first duty is to pay off the paid-up capital. If the assets do not allow the whole of the paid-up capital to be paid off, the liquidator must first repay those shareholders who have paid up a larger amount than others, in proportion to the number of shares held by them, the excess which they have so paid, and, if necessary, he must make a call upon those who have paid the lesser amount, so as to equalise matters. To take a simple concrete instance, suppose that in a company with an issued capital of 3,000 shares of £1 each, of which 2,000 are paid up to the extent of 10s. and 1,000 to the extent of 5s., the liquidator, after paying all expenses and all creditors, has a sum of £50 in hand. If this were returned to the holders of the 2,000 shares, 10s. paid up, the result would be merely to return 6d. per share, and these shareholders would be at a disadvantage. The liquidator’s duty, accordingly, is to make on the holders of the 1,000 shares, 5s. paid, a call of 3s. per share, which will enable him to return an additional 1s. 6d. per share to the holders of the 2.000 shares. thus WINDING UP 263 leaving every share 8s. paid. If, after all the paid-up capital has been returned, there is still a surplus, it is, in the absence of special provision to the contrary, returnable to all the shareholders alike in proportion to the number of shares held by each [re Bridgewater Navigation Company (1889), 14 A.C. 525]. But the memorandum or articles of a company commonly make some provision as to the distribution of what are called ‘surplus assets’ in a winding up, e.g. preference shareholders with priority as to capital are entitled to be repaid in full before ordinary shareholders receive anything. The term ‘surplus assets’ in articles of association often gives rise to difficulty. It may have one of two distinct meanings, according to the context, and according to the interpretation of the memorandum and articles as a whole. Sometimes it means the assets remaining after paying the expenses of the liquidation and the creditors, and sometimes the assets remaining after returning paid-up capital also. And, according to its meaning, which it is often hard to determine, must the assets remaining be distributed. It is to be observed that the holders of preference shares have no priority in the matter of the return of capital unless it is so provided. Their preference is a preference as regards dividends alone. It is impossible here to go into the widely varying clauses in articles of association as to the distribution of surplus assets. It seems advisable here to deal more systematically with Application a subject which has already several times been mentioned. to the Court. This is the matter of applications to the Court. S. 252 of the Act enables the liquidator, or any contributory, or any creditor, to make application to the Court in practically any matter of difficulty or dispute. It will be observed, on a perusal of the section, that its words are very wide; application may be made to the Court to determine any question arising in the winding up, or to exercise any of the powers exercisable in compulsory winding up; and, further, the Court may, upon application, make any order—even an order totally different from what is asked for. A number of cases in which application to the Court is sometimes made have already been noticed. Applications by the liquidator may be of almost any kind, but they may be roughly divided into three classes, namely, applications made with the object of obtaining a decision on a disputed point, applications to the Court to exercise its statutory powers to permit acts which may not be done except with the leave of the Court, and applications made with the object of obtaining the sanction of the Court to a proposed step or arrangement. In the third class of case, the liquidator 2604 SECRETARIAL PRACTICE Liability of Liquidator. may, generally, if he thinks fit, take the proposed step without any application to the Court, and his object in applying is to protect himself. Just as trustees are empowered to apply to the Court for directions in cases of doubt or difficulty, so the liquidator may, in order to safeguard himself, apply under s. 252. In case of any matter involving a large amount of money, or any specially important or unusual act, he may properly take steps to protect himself, and if he acts without doing so, the omission may tell against him if the propriety of the transaction is subsequently impeached. It would be prudent, for example, to apply to the Court for its sanction before taking proceedings in a matter of magnitude, or before borrowing more than a small amount of money. Applications by contributories are generally made when they are dissatisfied with the decision of the liquidator on their rights or liabilities, e.g. when they consider themselves improperly settled on a list of contributories. Creditors’ applications are generally of one of two kinds, that is to say, applications made in consequence of decisions of the liquidator adverse to their interests in individual cases, and applications made when they are dissatisfied with any matter in the liquidation as being disadvantageous to them generally, as, for example, if they consider the liquidator’s remuneration too high; or, if in their opinion, a proposed compromise is not sufficiently in the interests of the company. With reference to the liability of the liquidator in voluntary winding up, it seems unnecessary to deal with his criminal liability, or with his liability to penalties in case of certain defaults. As regards his civil liability, his position is simple. He is the agent of the company, and is not under the same liability as a trustee for negligence in the performance of his duties, but only for misfeasance or breach of trust. The negligence, which consists in a mere error of judgment, is not sufficient upon which to charge a liquidator, but, of course, personal misconduct, e.g. by failure to perform his statutory duties, or by negligence amounting to a failure to exercise proper care [see e.g. Windsor Steam Coal Co. (1929), 1 Ch. 157, Home & Colonial Insurance Co. (1930), I Ch. 102], will always render him liable. When he employs a solicitor in the course of the liquidation, he is not, in the absence of an express bargain, personally liable for the solicitor’s costs. When he contracts he should of course, be careful to make it clear that he contracts on behalf of the company and not personally; otherwise, it is possible that he might, as between himself and the other party to the contract. inadvertently assume a personal liability. WINDING UP 265 A few matters in which it behoves the liquidator to be specially careful may be noticed. In carrying on the business of the company for the purposes of its beneficial winding up, he will do well to consider carefully the precise effect of any proposed step, for a new contract might, in many instances, be made in excess of his duties; in case of doubt, application to the Court may often be desirable. Again, he should hesitate before embarking on costly litigation; for although in general an unsuccessful liquidator will be allowed his costs out of the assets of the company, yet it has been held that the Court has jurisdiction to order him to pay them personally, and, in case of an action being improperly or recklessly brought, he may find himself ordered to pay the costs out of his own pocket. Too much care cannot be exercised by the liquidator in avoiding all payments or dealings with the company’s assets which are not expressly or obviously authorised. In certain circumstances a liquidator may be removed from his position. It is not open to the shareholders themselves to remove a liquidator; the power of removal lies in the Court alone. S. 249 of the Act provides that ‘the Court may, on cause shown, remove a liquidator, and appoint another liquidator.” Contributories or creditors may apply for the removal of a liquidator, and the matter is one for the discretion of the Court, which, however, can only act ‘on cause shown.” It is impossible to predicate with certainty what circumstances will, or what will not, amount to ‘cause.’ It may, however, be safely assumed that gross misconduct, such as wrongful dealing with the company’s assets, will constitute sufficient cause; and although pecuniary interest in the winding up, apart from the liquidator’s remuneration, might not be sufficient unless it is calculated to interfere with the proper performance of his duties, flagrant breaches of Rules 159 and 160 of the Companies (Winding up) Rules 1929 might afford a ground for removal. Gross immorality is a factor to be considered, but in many cases it would not alone be sufficient to warrant a liquidator’s removal. The dominant principle on which the Court acts in this, as in all matters connected with the winding up, is that the benefit of the company and the wishes of the shareholders are to be first considered; and, unless the facts proved upon the application are sufficient to show that the continuance of the liquidator in office will be prejudicial to the company’s welfare, that is, to the creditors and the contributories, or is for adequate reasons distasteful to the shareholders or creditors, the liquidator will not be removed. By Rule 166 Removal of Liquidator. Vacancy in Office of Liquidator. The Final Meeting. 266 SECRETARIAL PRACTICE of the Winding-up Rules of 1929 ‘if a Receiving Order in Bankruptcy is made against a liquidator he shall thereby vacate his office, and for the purposes of the application of the Act and Rules shall be deemed to have been removed.’ As regards vacancies occurring in the office of liquidator, this is provided for by ss. 249, 233 and 242 of the Act of 1929. Under s. 249, when no liquidator is acting, the Court may appoint a liquidator; and, as has already been seen, the Court may, on the removal of a liquidator, appoint another. Further, it has been held that the Court may, if an additional liquidator is required, appoint him, and that an application to the Court for the appointment of an additional liquidator may be made by an existing liquidator [re Sunlight Incandescent Gas Lamp Company (1900), 2 Ch. 728]. Under s. 233, on the occurrence in a members’ voluntary liquidation of a vacancy in the office of liquidator appointed by the company, by death, resignation, or otherwise, the company may in general meeting, subject to any arrangement they may have entered into with their creditors, fill up the vacancy; and any contributory or the continuing liquidators (if any), may convene the meeting; it must be convened and held according to the provisions of the articles, or as the Court upon application may direct. Under s. 242, if in a creditors’ voluntary liquidation a vacancy occurs by death, resignation, or otherwise in the office of a liquidator other than one appointed by or by the direction of the Court, the creditors may fill the vacancy. Rules 126 to 154 apply to the convening and conduct of the meeting and to proxies to be used thereat. The duties of the liquidator upon the conclusion of the winding up may now be considered. These are laid down by ss. 236 and 245 of the Act. The first step in the final proceedings is for the liquidator to make up an account, showing how the winding up has been conducted and the property of the company disposed of. With reference to the form of the account, none is prescribed by the rules; the liquidator will accordingly prepare it in such form as he thinks best. It may, however, conveniently take the general form of the periodical accounts which the liquidator is required to furnish to the Registrar under S. 284 in the case of companies the winding up of which is not concluded within a year, with the necessary difference that it will be a complete, and not an incomplete, account, and certain statements required in the periodical account will be inappropriate in the case of a final account. Having regard to the fact that the account is required to show ‘how the winding up has been conducted WINDING UP 26% and the property of the company disposed of,’ it appears to be necessary that considerable detail should be shown. Or, if the transactions are summarised, reference should be made to the books or documents whence the summaries are derived. The account being prepared, the next step is to convene a general meeting of the company, and also in the case of a creditors’ voluntary winding up a meeting of creditors. Ss. 236 and 245 require the meetings to be summoned by advertisement. The advertisement is to be published in the Gazette one month, i.e. one calendar month, at least, before the day fixed for the meeting. But even although no extraordinary resolution of the kind to be mentioned presently is required to be passed, few liquidators will be content merely with the notice by advertisement in the Gazette, but will send notices to the shareholders in the manner prescribed by the articles, and also in the case of a creditors’ winding up, to the creditors known to him at their last-known addresses. An advertisement in the Gazette only might result in no one being present at the meeting except the liquidator, or at all events, no quorum of shareholders or creditors, as the case may be. However, if the sole business of the meeting is that specified in ss. 236 and 245 as the case may be, there is no legal obligation to give any notices other than the advertisement, and the lack of a quorum at the final meeting will not interfere with the dissolution. But in the great majority of cases, unless there is a committee of inspection, advantage will be taken by the liquidator of the provisions of s. 283 of the Act as to disposing of the company’s books. This section empowers a company which has been wound up voluntarily, and 1s about to be dissolved, to dispose of the books in the case of a members’ voluntary winding up in such way as the company by extraordinary resolution directs, and in the case of a creditors’ voluntary winding up in such way as the committee of inspection, or if there is none, as the creditors may direct. And, since in the case of a members’ voluntary winding up an extraordinary resolution is necessary for the purpose, notice of the intention to propose such resolution must, by s. 117 be duly given to all the members. A single notice will suffice for both purposes: it will intimate to the shareholders that the meeting is to be held for the purpose of having the liquidator’s account laid before them, showing the manner in which the winding up has been conducted and the property of the company disposed of, and of hearing any explanation that may be given by the liquidator, and also for the purpose of determining by extraordinary Dissolution. 268 SECRETARIAL PRACTICE resolution how the books and papers of the company and of the liquidator are to be disposed of. At the meeting or meetings, the liquidator will lay his account before the shareholders or the shareholders and the creditors as the case may be, and should have ready for inspection, if required, the books and other documents from which it is compiled. His record book, or diary, should also be before him for reference if necessary. He will, in general, explain in such detail as he considers necessary, the steps which have been taken in the liquidation, drawing attention to any matters of more than ordinary importance, and will answer such questions or give such explanations as the shareholders or creditors may ask or require. It is not necessary for the meeting to pass any resolution adopting the liquidator’s account, although this is sometimes done, but the question of the disposal of the books must be dealt with by resolution. Frequently it is resolved to destroy the books, but, seeing that the dissolution of the company does not take place for three months from the registration of the liquidator’s return as to the holding of the meeting, it is obviously inadvisable, and even improper, to authorise the immediate destruction of the books. Indeed, in view of s. 294, they should be preserved for two years. Where destruction is resolved upon, the resolution should authorise the liquidator to retain the books until two years from the dissolution of the company and then to destroy them. Ifit is inadvisable for any reason to destroy the books, the liquidator, or any one else, may be required to keep them for a stated period. Or, if the business of the company has been sold as a going concern, the meeting may resolve that the trading books of the company be handed over to the purchaser, and the remainder destroyed or retained for a time. It lies with the meeting entirely to determine the fate of the books and papers of the company and the liquidator, but in most cases it will be guided by the liquidator in deciding apon the desirability or otherwise of retaining them. There is no responsibility on any one for the custody of the books after five years from dissolution [s. 283]. Within one week after the meeting or meetings, or if the meetings of members and creditors respectively are held on different dates, within one week after the later of such meetings, the liquidator must send to the Registrar a copy of the account laid before the meeting and make a return to the Registrar of the holding of the meeting and of the date on which it was held or, if a quorum was not present at either meeting, a return that such meeting was duly summoned and that no quorum was present. The quorum at a shareholders’ meeting will depend on the WINDING UP 26g articles if they specify the quorum. If they do not contain any provision as to quorum, and in any event at a creditors’ meeting, the quorum will be two; if the liquidator fails to send the copy of the account or make the requisite return, he is liable to a penalty of £5 per day during default. The company is deemed to be dissolved at the expiration of three months from the registration of the return. The dissolution may, however, be deferred by order of the Court for any length of time, on the application of the liquidator or any person appearing to the Court to be interested [ss. 236, 245]; or it may, on a similar application within. two years from dissolution, be set aside [s. 204]. Any order deferring the dissolution or declaring it void must be filed with the Registrar within seven days after it is made, but in the case of an order declaring the dissolution void the Court may extend the time for filing the order. Until dissolution the company continues to exist, and the result of this is that proceedings may still be taken, or claims made against the company; or assets may be discovered which it would be the duty of the liquidator to distribute. Should a liability be discovered, which the creditor was not by his own default precluded from pursuing, an order might be obtained from the Court that a call be made to meet it. And the existence of the company is revived, with similar results, if the dissolution is set aside. A company may also be dissolved if it is struck off the register under s. 295, and notice of this being done is published in the Gazette. The Registrar may act under this section, even though there is no winding up. If there is no winding up, he may act if he has reasonable cause to believe that the company is not carrying on business or in operation. If it is being wound up, he may act if he has reasonable cause to believe that no liquidator is acting or that the liquidation is complete, and if the returns required to be made by the liquidator have not been made for six consecutive months. Before actually striking the company off the register he must give notices and issue advertisements in the Gazette as provided by the section. If a company is struck off the register under this section, and the company or any member or creditor feels aggrieved by its being struck off, the Court may, on the application of the company or such member or creditor made within twenty years of the publication in the Gazette of the notice that the company had been struck off the register, order the company to be restored to the register; and on an office copy of the order being filed with the Registrar, the company will be deemed to have continued in existence as if it had never been struck off. 270 SECRETARIAL PRACTICE A company may also be dissolved without any winding up if the Court makes an order to that effect upon an application under s. 154 in connection with a reconstruction under s. 153 (see p. 224). CHAPTER XXI POWERS OF ATTORNEY! THE capacity to appoint an attorney (and it should be Capacity. remembered that capacity primarily depends upon domicile) is practically co-extensive with the capacity to contract. Thus a power of attorney given by an infant is void [Zouch v. Parsons (1765) 3 Burr:], except for doing acts by which the infant himself could be legally bound. On the other hand, ‘an infant may be an agent, an infant may be the donee of a power of attorney’ [per James, L.J. in re D’ Angibau (1880) 15 C.D. 228]; for the acts of an agent as such are not his own but those of his principal, of whom he is merely an instrument. As regards married women, s. 129 of the Law of Property Act 1925 provides that ‘a married woman, whether an infant or not, has power, as if she were unmarried and of full age, by deed to appoint an attorney on her behalf for the purpose of executing any deed or doing any other act which she might herself execute or do,? and the provisions of this Act relating to instruments creating powers of attorney apply thereto.” If a woman marries a foreigner, it may be that by the law of her new nationality and domicile she loses the capacity to appoint an attorney, and thereby becomes subject to ‘disability’ within the meaning of ss. 124, 126 and 127, set out below; otherwise marriage does not revoke a power. The capacity of trustees to appoint attorneys is regulated by ss. 23 and 25 of the Trustee Act, 1925. S. 23 gives an unqualified right of delegation where the trust property is out of the United Kingdom (which by s. 68 is defined to mean Great Britain and Northern Ireland). S. 25 provides that in other cases a trustee who intends to remain out of the United Kingdom for more than one month may, by power of attorney, delegate the execution of trusts, subject to the following qualifications: if he has only one co-trust:-, the ! For fuller discussion of this subject, and forms and precedents, see the Manual on Powers of Attorney issued by The Chartered Institute of Secretaries. 2 Including receipt of income, notwithstanding that she is restrained from anticipation [Stewart v. Fletcher (1888) 38 C.D 6271, fa) Infants. 'b) Married Women. c) Trustees. 272 SECRETARIAL PRACTICE latter, if not a trust corporation, cannot be appointed as attorney; the instrument must be filed at the Central Office; and it is only operative during the donor’s absence and is revoked by his return. The third party, however, is not affected by the latter restriction if he has no notice that the donor never left the country or has returned, and he may accept as conclusive a statutory declaration by the attorney that the power is in force; and companies are further protected by sub-section (10) which provides that ‘the fact that it appears from any power of attorney given under this section, or from any evidence required for the purposes of any such power of attorney or otherwise, that in dealing with any stock the donee of the power is acting in the execution of a trust shall not be deemed for any purpose to affect any person in whose books the stock is inscribed or registered with any notice of the trust.” (‘Stock’ includes fully paid shares, s. 68). (d) Executors Ihe expression ‘trustee’ in the Trustee Act, 1925, also and Admin- includes a personal representative (s. 68 (17) ); but an executor istrators. or administrator, like a trustee, can delegate purely ministerial powers, including power to collect debts due to the deceased [Vane v. Rigden (1870) L.R. 5 Ch. App. 663]. (¢) Com- The Companies Act 1929 confers the following powers of panies. delegation: — (i) A company may, by writing under its common seal, empower any person, either generally or in respect of any specified matters, as its attorney, to execute deeds on its behalf in any place not situate in the United Kingdom; and every deed signed by such attorney on behalf of the company, and under his seal, shall bind the company, and have the same effect as if it were under its common seal (s. 31). A company whose objects require or comprise the transaction of business in foreign countries may, if authorized by its articles, have for use in any territory, district, or place not situate in the United Kingdom, an official seal, and may by writing under its common seal, delegate power to affix such official seal to any deed or document to which the company is a party in that locality (s. 32). (iii) A corporation (whether a company within the meaning of the Act or not) if it is a member or creditor (including a debenture holder) of a company within the meaning of the Act, may by resolution of its directors or other governing body authorize any person to act as its representative at any meetings (i1) POWERS OF ATTORNEY 273 of that other company’s members or creditors, and such person may exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual shareholder or creditor (s. 116). If a power of attorney is granted by a person who at the time is of such unsound mind that he has no knowledge of what he is doing and only signs his name as a mere mechanical act, the instrument is void. Thus where a company transferred shares, acting on a deed of transfer executed under a power of attorney which was signed by the shareholder while of unsound mind it was held that the power was void and the deed of transfer a nullity [Daily Telegraph Newspaper Co., Ltd. v. M’Laughlin (1904), A.C. 776; see also the decision of the Privy Council in Molyneux v. Natal Land, &c., Co., Ltd. (1903), A.C. 555]. The position arising if the principal was sane at the time of execution, but subsequently becomes insane, will be dealt with later. The instrument appointing the attorney should always be Sealing executed under seal, for although sealing is not necessary for any purpose of delegation, a power of attorney, which, as is nearly always the case, confers authority to execute a deed, must itself be in the form of a deed. [In re Seymour (1913) 1 Ch. 475 at p. 481.] Certain foreign companies, however, do not possess a Common Seal, and sealing is then impossible. A case of this kind came under judicial notice in Colonial Gold Reef, Lid. v. Free State Rand Ltd. (1914), 1 Ch. 382, where the articles of association of an English company provided that ‘the instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in that behalf, or, if such appointor is a corporation, under its Common Seal.’ A South African company having no Common Seal and not required to have one was a shareholder, and by writing under the hands of two directors appointed an attorney in England to vote on its behalf, with power of substitution; it was held that the requirement of a Common Seal in the Article only applied to corporations having a Common Seal according to English law and that the instrument in question could Le recognised as valid and effective. Next, as evidence that the signature is that of the alleged donor, the instrument should be attested, and it is desirable that there should be two witnesses, since this is reauii. u ior the transfer of certain stocks. Moreover, powers for use abroad should always be attested by two witnesses: if for use in the Dominions and Colonies they (f} Lunatics. Attestation. Stamp. Apparent Authority the real Authority. Limitation of above doctrine. Powers strictly ronstrued. 274-SECRETARIAL PRACTICE should be notarially certified, and if for use in foreign countries they should also be legalized by the consul of the country to which they are to be sent. The advice of a notary should be obtained in such cases, and the notary will see to the necessary legalization. Conversely, powers from the Dominions and Colonies should be notarially certified, and those from foreign countries should also be legalized by the local British consul (see Order 61 (a) of the Supreme Court Rules). A power of attorney should be stamped in the country 'n which it is to be used with the appropriate duty imposed hy the laws of that country. The English stamp duty is ten shillings. In ascertaining the scope of the document it should be remembered that the third party is entitled to act upon the principle of law that the apparent authority is the real authority. The following statement of this principle, taken from an American case, was approved by the Privy Council in Bryant v. La Banque du Peuple (1893), A.C. 170: “Whenever the very act of the agent is authorized by the terms of the power, that is, whenever, by comparing the act done by the agent with the words of the power, the act is in itself warranted by the terms used, such act is binding on the constituent as to all persons dealing in good faith with the agent. Such persons are not bound to inquire into facts aliunde. Where, however, the act is on the face of it one which is being done by the attorney on his own behalf and not on behalf of his principal, the third party, who has thus notice that the attorney is using the power for his own purposes, cannot retain the benefit of the act so done to the detriment of the donor of the power. This principle was finally established by the House of Lords in Reckitt v. Barnett. Pembroke & Slater, Ltd. (1929) A.C. 176.1 Apart, however, from this question of the third party's knowledge that the attorney is abusing his authority, to say that the apparent authority is the real authority is not to say that the third party must not be on his guard. If a person is acting ex mandato, those who have dealings with him must look to his authority and assure themselves of its genuineness, its legal form, and its limitations. The important point to remember is that on the one hand specific powers are construed with great strictness, and that on the other hand where, after the enumeration of specific powers, there is added (as is often the case) a general clause, the latter does not give 1 See also below, under the heading of fraud of the attorney. POWERS OF ATTORNEY 275 the attorney powers at large, but it confers on him the authority to do any unspecified acts which may become necessary for the proper fulfilment of the purposes for which the instrument was primarily granted. [A#fwood v. Munnings (1827), 7 B. & C. 278; Withington v. Herring (1829), 5 Bingh. 422; Harper v. Godsell (1870), L.R. 5 Q.B. 422; Hawksley v. Outram (1892), 3 Ch. 359; re Dowson and [Jenkins (1904), 2 Ch. 219; Bryant v. La Banque du Peuple (1893) A.C.170]. If the instrument contains recitals showing the general object for which the power is given, these must be regarded as controlling the operative part of the deed. Thus, in Danby v. Coutts & Co. (1885), 2 Ch. D. 500, there was a recital that the plaintiff was going abroad and was desirous of appointing an attorney to act in his absence; it was held that the recital limited the exercise of the powers to the plaintiff's absence from this country. Power to borrow must be found indisputably expressed in the instrument if a third party wishes to lend to the attorney without risk [ Jonmenjoy Coondoo v. Watson (1884), 0 A.C. 561; Bryant v. La Banque du Peuple (1893), A.C. 170; Jacobs v. Morris (1902), 1 Ch. 816]. ‘In every case where an Act requires a signature, it is a pure question of construction on the terms of the particular Act whether its words are satisfied by signature of an agent ......we ought not to restrict the common law rule, qui facit per alium facit per se, unless the Statute makes a personal signature indispensable’ [re Whitley Partners, Ltd. (1886) 32, C.D., 337]. This case decided that a company’s memorandum and articles may be signed on behalf of a subscriber by a duly authorised agent; and similarly, it has been held that a bill of sale may be executed by an attorney [Furnivall v Hudson (1893), 1 Ch. 335]. An attorney cannot delegate his powers to a substitute, ‘Delegatus unless there is an express provision to this effect; and, non Potest similarly, a power of substitution does not, in the absence Delegare. of a special provision, include a power of sub-delegation by the substitute. The rule, however, unless the power of attorney contains an express provision to the contrary, does not prevent the employment of brokers or agents such as are necessarily or customarily required for carrying out an particular transaction. External circumstances, such as a custom of trade, may be Custom. used for the interpretation of thie nowers granted + the principal, but a usage or custom . It was unknowu the principal—must be shown tc be reasonable [fIgy + CGoldsmidt (1804), T Taunt. - 7 Sor exampn!~. wien <¢ man. Power to sign pursuant to Statute. 276 SECRETARIAL PRACTICE Application of Local Laws. Alternative Interpretations. Attorney’s Signature. unaware of the usages of a market, engages a broker on that market, he authorises that broker to contract on the footing of such usages as are reasonable and do not alter the nature of the contract [Perry v. Barnett (1885), 15 Q.B.D. 388]. The general rule of law is that the authority of the agent, in the absence of evidence of a contrary intention, is to be determined according to the law of the country where the agency was created. But the Court will do its best to ascertain the intention of the grantor; for a power of attorney as was stated by Lord Lindley in Chatenay v. Brazilian Telegraph Company (1891), 1 Q.B. 79, is ‘a one-sided instrument, an instrument which expresses the meaning of the person who makes it, but is not in any sense a contract.’ The judgments in this case show that if a power of attorney is granted abroad, and even though it is written in a foreign language and drafted in a foreign form, then, when once it is ascertained from the evidence of competent translators and experts that it is the intention of the grantor that it should be acted upon in England, the extent of the authority, so far as transactions in England are concerned, must be determined by English law. Where a power admits of two different interpretations, the attorney is within his right to adopt consistently the interpretation which to him seems best; “if a principal gives anorder to an agent in such uncertain terms as to besusceptible of two different meanings, and the agent bona fide adopts one of them and acts upon it, it is not competent for the principal to repudiate the act as unauthorized because he meant the order to be read in the other sense of which it is equally capable’ [Ireland v. Livingstone (1872), 5 H.L. 395, at p. 416]. Where, however, there is a choice between a definite and an indefinite construction of the instrument, the attorney is bound to act upon the definite construction [Bertram Vv. Godfray (1830), T Knapp, 381]. The Law of Property Act 1925, s. 123, declares that ‘the donee of a power of attorney may, if he thinks fit, execute or do any assurance, instrument, or thing in and with his own name and signature and under his own seal, where sealing is required, by the authority of the donor of the power; and every assurance, instrument or thing so executed and done shall be as effectual in law, to all intents, as if it had been executed or done by the donee of the power in the name and with the signature and seal of the donor thereof.’ The words ‘by the authority of the donor of the power’ have led to the contention that the section can only apply to an instrument in which the principal has expressly stated POWERS OF ATTORNEY 277 that the donee may execute in his own name. The section is purely permissive, and, as there is still some doubt and no decision on the question, the attorney should sign all documents in the name of the principal, lest he may make himself a party to any covenant. The form of words is immaterial; it does not make any difference whether the name of the attorney appears before or after that of the principal, provided it is made clear that the attorney is acting solely as the agent of the principal. When property is to be conveyed under a power of attorney of which the grantor or grantee is a corporate body, a special mode of execution is provided for by s. 74 (sub-ss. 3 to 5. of the Act of 1925, which will be found in Appendix M. It has been held that ‘the power of attorney is the degd Custody of of the attorney to whom it was given, and he is to keep it the Power. and under it to show that he has authority for what he has done’ [Hibberd v. Knight (1848), 2 Exch. 11, per Baron Parke]. On revocation, however, the principal should always demand the return of the power, and if this is refused, should claim production for the purpose of endorsing a note of the revocation, or insist on its being filed at the Centra’ Office, and then himself file a deed of revocation. As regards filing, the Supreme Court of Judicature Filing. (Consolidation) Act 1925, s. 219, makes the following provisions: (1) An instrument creating a power of attorney, the execution of which has been verified by affidavit, statutory declaration, or other sufficient evidence, may, with the affidavit or declaration, if any, be deposited in the Central Office. A separate file of instruments so deposited shall be kept, and any person may search that file and inspect every instrument so deposited, and an office copy thereof shall be delivered out to him on request. A copy of an instrument so deposited may be presented at the office, and may be stamped or marked as, and when so stamped or marked shall become, an office copy. An office copy of an instrument so deposited shall, without further proof, be sufficient evidence of the contents! of the instrument and of the deposit thereof in the Central Office. 1].e. of the existence of the contents, not of the truth thereof or of the identity of the parties [O'Kane v. Mullan (1925) Northern Ireland L.R.I. at p. 5). 8 27 SECRETARIAL PRACTICE (5) Rules of Court may be made for the purposes of this section, regulating the practice! of the Central Office and prescribing, with the concurrence of the Treasury, the fees to be taken therein. Such filing, however, is optional except in the case of powers executed by trustees under s. 25 of the Trustee Act, 1925, and powers relating to the disposition of land, the latter of which are governed by the following provisions of s. 125 of the Law of Property Act, 1925:— (1) Where an instrument creating a power of attorney confers a power to dispose of or deal with any interest in or charge upon land, the instrument or a certified copy thereof or of such portions thereof as refer to or are necessary to the interpretation of such power shall be filed at the Central Office pursuant to the statutory enactment in that behalf, unless the instrument only relates to one transaction and is to be handed over on the completion of that transaction; Provided that if the instrument relates to land or a charge registered under the Land Registration Act, 1925, the instrument or a certified copy thereof or of such portions thereof as aforesaid shall be filed at the Land Registry, and it shall not be necessary to file it at the Central Office unless it also relates to land or a charge not so registered, in which case the instrument or a certified copy thereof or of such portions thereof as aforesaid shall be filed at the Central Office and an office copy shall he filed at the Land Registry. Notwithstanding any stipulation to the contrary a purchaser of any interest in or charge upon land mot being land or a charge registered as aforesaid) shall be entitled to have any instrument creating a power of attorney which affects his title, or a copy thereof or of the material portions thereof delivered to him free of expense. This section only applies to instruments executed after the commencement of this Act, and no right to rescind a contract shall arise by reason of the enforcement of the provisions of this section. In all other cases a third party has, therefore, no power to insist upon registration; and, while the law remains as it is, the only alternative would seem to be the possession 1 In practice, deeds of revocation may also be filed, if similarly verified, and the original power will then be marked ‘revoked.’ (3) POWERS OF ATTORNEY 279 by the third party of a copy of the power carefully collated by him. Such a copy, however. would not strictly be ad missible in evidence. Certain safeguards are, however, afforded by Statute. S. 124 of the Law of Property Act, 1925, provides as follows :— (1) Any person making any payment or doing any act, in good faith, in pursuance of a power of attorney, shall not be liable in respect of the payment or act by reason that before the payment or act the donor of the power had died or become subject to disability! or bankrupt,? or had revoked the power, if the fact of death, disability, bankruptcy, or revocation, was not at the time of the payment or act known to the person making or doing the same. A statutory declaration by an Attorney that he has not received any notice or viformation of the revocation of such power of attorney by death or otherwise, shall, if made immediately before or within three months after any such payment or act as aforesaid, be taken to be conclusive proof of such mon-revocation at the time when such payment or act was made or done. Where the donee of the power of attorney is a corporation aggregate, the officer appointed to act for the corporation in the execution of the power may make the statutory declaration in like manner as if that officer had been the donee of the power. Where probate or letters of administration have been granted to any person as attorney for some other person,? this section applies as if the payment made or acts done under the grant had been made or done under a power of attorney. This section shall not affect any right against the payee of any person interested in any money so paid; and that person shall have the like remedy against the payee as he would have had against the payer if the payment had not been made by him. 3) Statutory Protection. ! E.g. lunacy, unsoundness of mind. ? includes liquidation (s. 2035). 8 As to the appointment of this officer, see Appendix. ! Where administration is granted to the attorney of an executor or next of kin, the grant is made to the attorney for the use and benefit of his principal and determines on the latter's death. This clause protects third parties who have no notice of such death and deal in good faith with the attornev. 280 SECRETARIAL PRACTICE (4) This section applies to payments and acts made and done before or after the commencement of this Act, and in this section ‘power of attorney’ includes a power of attorney implied by statute. Express A power of attorney, even though executed under seal, Revocation. may be revoked by parol [R. v. Wait (1823) 1 Bingh. 121]. In practice, however, express revocation by the donor should be effected by deed. It is also open to the donee to effect revocation by giving notice to the donor that he renounces the power. Implied The common law was thus laid down by Lord Blackburn in Revocation. Debenham v. Mellon (1880), 6 A.C. at p. 36: ‘Where an agent is clothed with an authority and afterwards that authority is revoked, unless the revocation has been made known to those who have dealt with him, they would be entitled to say: “The principal is precluded from denying that the authority continued to exist, which he had led us to believe, as reasonable people, did formerly exist.””’ But there is left the problem which dwells in those words in Lord Blackburn’s judgment (above)—‘as reasonable people.” The expression suggests at once that there is such a thing as implied revocation, and that the third party may be deemed to have constructive, as distinct from actual, notice of revocation. There are many circumstances which would be held to amount to such an implication, e.g. the appointment by the principal of another attorney—especially if the second attorney were invested with powers, the exercise of which would clash with the authority of the first; a lapse of time since the creation of the power, such as would lead any ordinary man to doubt the probability of its continued currency; the intervention of the principal himself in the conduct of the business for which the power had been originally granted. Similarly, if a donor says that the attorney is to act only when he is himself prevented from acting, a third party may be at his wits’ end to know what to do. In all such cases the third party would be justified in requiring proof of the continuing validity of the power of attorney. The first paragraph of s. 124 (2), which is printed above in italics, enables the third party to obtain protection by requiring the attorney to make a statutory declaration as therein provided. Such a declaration, however, will not protect a third party who is in fact aware, of his own knowledge, that the power has been revoked [Mutual Provident Land Vv. Macmillan (1889), A.C. 596] POWERS OF ATTORNEY 28 Still greater security is afforded under the powers covered by ss. 126-127 (1) of the Law of Property Act, 1925, which provide as follows :— A. If a power of attorney is given for valuable consideration and is in the instrument creating the power expressed to be irrevocable Is 125], or If a power of attorney, whether given for valuable consideration or not, is in the instrument creating the power expressed to be irrevocable for a fixed period therein specified not exceedinr; one year from the date of the iustrument " then in favour of a purchaser! (i) The power shall not be revoked, at any time (or in case B during the fixed time) either by anything done by the donor of the power without the concurrence of the donee of the power, or by the death, disability, or bankruptcy of the donor of the power; and— Any act done at any time (or in case B within the fixed time) by the donee of the power, in pursuance of the power, shall be as valid as if anything done by the donor of the power without the concurrence of the donee of the power, or the death, disability, or bankruptcy of the donor of the power had not been done or happened; and— Neither the donee of the power, nor the purchaser, shall at any time be prejudicially affected by notice of anything done by the donor of the power without the concurrence of the donee of the power, or of the death, disability, or bankruptcy of the donor of the power at any time (or in case B within the fixed time). If a power has been made irrevocable under s. 127, then (unless the context otherwise requires) it does not lapse on the expiration of the fixed period, but continues to operate in the same way as if it had not been made irrevocable for any fixed period. > J Powers given for valuable consideration or made irrevocable for not exceeding one vear. ! ‘Purchaser’ means a purchaser in good faith for valuable consideration, and includes a lessee, mortgagee or other person who for valuable consideration acquires an interest in property, and where the context so requires includes an intending purchaser; ‘valuable consideration’ includes marriage, but does not include a nominal consideration in money; and ‘property’ includes any thing in action and any interest in real or personal property (s. 205). 285 SECRETARIAL PRACTICE Death of According to the common law, the death of the grantor of Principal or a power was a revocation of the authority, but it has been Attorney. pointed out how this principle has been modified by statute. The representatives of a dead principal, it is true, could ratify, at their discretion, a contract made by the attorney in the name of the principal after his death, but in the absence of ratification they were not bound by it [Foster v. Bates (1843), 12 M. & W. 226]. On the death of the attorney, the latter’s representatives have no authority to exercise the power, and the death of the attorney revokes the appointment of a substitute made by him under a power authorising delegation; for it is assumed in law that the attorney had been chosen by the principal because of his possessing some qualities of mind which fitted him peculiarly sither for the conduct or for the supervision of the principal's affairs. Joint For the same reason, where two attorneys are appointed Attorneys. to act jointly and one of them dies, the survivor cannot act alone. Joint Where there are two or more joint principals, the death Principals. of one of them will generally revoke the power as to the other or others [Gee v. Lane (1812), 15 East 592]. Although the Courts nowadays might not insist upon observing the old strictness as regards this rule, the third party would be well advised not to place faith in speculation, but to assume that the old rule was still valid. As has already been shown, if the principal was insane at the time when he executed the power, the instrument is absolutely void. If, however, he was sane at the time of execution, but subsequently becomes insane, the rule of common law is that the power is determined as between the principal and the attorney, but that the revocation is not operative as against a third party, who deals with the attorney in good faith and without knowledge of the insanity [Drew v. Nunn (1879), 4 Q.B.D. 661]. The sections of the Law of Property Act, 1925, set out in this Chapter, show how this principle of protecting third parties is recognized by statute. Insanity of Insanity of the attorney revokes his authority, since the Attorney. he loses the capacity to exercise the will of his principal; and third parties who deal with him are in a better position than the principal himself to ascertain the fact of his insanity. Bankruptcy In the case of bankruptcy of the principal, as in the case of the of his insanity, the position of third parties is protected by Principal. (he Taw of Property Act, 1925. According to the common law bankruptcy of the principal revokes the power, except in respect of a purely formal act necessary to complete a POWERS OF ATTORNEY 283 transaction already binding on the principal and not involving the passing of any interest vested in the trustee in bankruptcy [Markwick v. Hardingham (1880), 15 Ch. D. 339]; and this rule is also without prejudice to the rights conferred on third parties by ss. 40 to 47 of the Bankruptcy Act, 1914, in respect of transactions entered into bona fide and without notice of an act of bankruptcy. By s. 22 of the last-mentioned statute a bankrupt is bound to execute such powers of attorney as may be reasonably required by the Official Receiver or the trustee in bankruptcy, or as may be prescribed by the Bankruptcy Rules or directed by the Court, in order to effect the due administration of his estate; and by s. 55 (4) a trustee in bankruptcy may execute any power of attorney for the purpose of carrying into effect the provisions of the Act. Where a company has given a power of attorney, liquida- Liquidation tion has apparently at common law the same effect as the of Donor bankruptcy of an individual donor, i.e. it revokes the power Bompazy. [re Oriental Bank (1885), 28 C.D. 634; and as to dissolution of a company, see Salton v. New Beeston Cycle Co. (1900), 1 Ch. 43]. There is, however, the same statutory protection as in the case of bankruptcy; for bys. 205 of the Law of Property Act, 1925, the expression ‘bankruptcy’ in ss. 124, 126, and 127 includes liquidation. A liquidator has power to appoint an agent to do any business which he is unable to do himself [Companies Act, 1929, s. 191 (2)]. [t is probably still an open question whether bankruptcy of the attorney automatically revokes the power. There are dicta to this effect, as in the old case of Hudson v. Granger (1821), 5 B. & A. 27 relating to a factor. On the other hand, it was held in McCall v. Australian Meat Co. (1870), 19 W.R. 188, in relation to an agency contract, that it was a question of fact in each case whether the circumstances of the bankruptcy, having regard to the nature of the agent’s duties and the terms of his employment, were such as to render the agent unfit to carry out his agency. Possibly the only safe course for the principal to take on hearing of his attorney’s bankruptcy is to execute an express revocation of the power, without prejudice to any prior revoca tion which may have arisen by operation of law. Ratification of an unauthorized act may be given expressly Ratification. in writing or verbally, or may be implied either by some adoptive act or by silent acquiescence after knowledge of the irregularity. The effect of ratification is thrown back to the date of the act done, and the agent is put in the same position as if he had had authority to do the act at the time the act 284 SECRETARIAL PRACTICE was done by him. The act must, therefore, be one which at that date was both lawful in itself and within the capacity of the principal. It must also be an act which is done by the agent on behalf of his principal and not on his own behalf [Keighley Maxsted & Co v. Durant (1901) A.C. 24]. Powers Where the power, though not expressed to be irrevocable, is Coupled with coupled with an interest, it cannot be recalled until that Interest. interest has been satisfied or abandoned. But it must be clear that the interest—if it is to keep alive a power which would otherwise be revocable—must be in the subject matter of the power itself; the power and the interest must be united in the same person. The power must be given to secure some claims of the attorney [Frith v. Frith (1906), A.C. 254]; a power would not be irrevocable under this doctrine merely because the attorney happened to have some lien upon the estate in respect of which the power was granted [Taplin v. Florence (1851), 10 C.B. 744]. For example, a commission payable to an agent for collecting debts is not such an interest in the power as to make the appointment of the agent irrevocable [Doward Dickson & Co. v. Williams & Co. (1890), 6 T.L.R. 316]. On the other hand an underwriting letter given for valuable consideration and authorizing an application for shares to be made in the name of the signatory, is an authority coupled with an interest within the meaning of the rule [re Carmichael (1896), 2 Ch. 643 and re Olympic Reinsurance Co. (1920), 2 Ch. 341]. Should the authority be but partly exercised when revocation takes place, the position is that the revocation will be effective as to the part of the authority which has not been executed, but not as to the part already executed, if the authority permits such a distinction. Performance can, therefore, be enforced of a transaction in respect of which the attorney and the third party have entered into a binding contract before the death of the principal. But a third party must not allow an attorney, after notice of the donor’s death, to continue to carry out transactions of a nature similar to those already carried out under the power, on the plea that the transactions after the donor’s death are but part of a continuous series, constituting in reality the execution of but one uniform commission. Where, for instance, a stockbroker, having a continuation account with a client, instead of closing the account on the death of the client, enters at once on his own authority into a fresh continuation and ultimately makes a sale of the securities at a loss, he has been held liable for the loss incurred [re Overweg, Haas v. Durant (1900), 1 Ch. 209]. Powers Partly Exercised. POWERS OF ATTORNEY 285 Where an attorney acting within the scope of his authority Fraud. commits a fraud, the person who has been defrauded may hold the principal responsible, even in cases where the principal has not derived any benefit from the fraudulent activities of his attorney [Lloyd v. Grace Smith (1912), A.C. 716]. If, however, the third party is aware that the attorney is using his powers for his own benefit in fraud of the donor of the power, he will be accountable to the donor for any property so transferred to him by the attorney. For where the act of an attorney is on the face of it done for the private purposes of the attorney himself and not for the benefit of his principle, the third party cannot rely on the doctrine of ‘apparent authority’ or claim protection as an innocent party: knowledge—that is to say, actual or constructive notice— affects the whole position [Reckitt v. Barnett, Pembroke & Slater, Ltd. (1929), A.C., 176]. What may amount to notice is illustrated by the case of Reckitt v. Nunburnholme (1929) 45 T.L.R. 629. The plaintiff’s attorney, Lord Terrington, who was also the defendant’s solicitor, and collected her dividends and kept her pass book, drew a cheque on the plaintiff's banking account, payable to ‘life insurance or bearer’ and crossed ‘not negotiable,’ signing it ‘Sir Harold J. Reckitt by Terrington, his attorney,” and without informing the defendant paid it into her account at another bank. At his request the defendant then drew a cheque on her account, which would otherwise not have been in sufficient funds, in settlement of a transaction between her and the attorney, who was in reality defrauding both her and the plaintiff. The plaintiff successfully claimed the amount of the cheque from the defendant, on the ground that the latter, through the agency of her bank, had constructive notice that she had been credited with money belonging to the plaintiff, who was under no obligation to her (i.e. that the power of attorney was being used otherwise than for the purposes of the plaintiff's affairs) and that she was equitably bound to refund the amount b. which she had been thus enriched. Where a forged instrument induces contractual relations Forgery between parties ignorant of the forgery, and acting in an honest belief as to the genuineness of the document, it is the person that set the negotiations in motion by the introduction of the forged instrument who must bear the loss. Thus, where it became necessary to decide whether a bank or a stockbroker was to lose the value of stock improperly transferred through a forged power of attorney presented by the stockbroker, when both parties had acted in 236 SECRETARIAL PRACTICE Specially prescribed forms. Summary. ignorance of any defect in the instrument, it was held that the professed attorney, i.e. the stockbroker, was liable to indemnify the bank [Oliver v. Bank of England (1902), 18 T.L.R. 341; Starkey v. Bank of England (1903), A.C. 114; Sheffield Corporation v. Barclay (1905), A.C. 392, where Lord Davey said: ‘I dissent from the proposition that a person who brings a transfer to the registering authority and requests him to register it makes no representation that it is a genuine document ’]. The Forged Transfers Act 1891 provides that local authorities and companies (including companies incorporated by statute or by royal charter) may ‘impose such reasonable restrictions on the transfer of their shares, stock, or securities, or with respect to powers of attorney for the transfer thereof, as they may consider requisite for guarding against losses by forgery,’ and may make compensation out of their funds for any loss arising from a forged transfer or a transfer under a forged power of attorney. In the case of any stock to which the Colonial Stock Acts apply, the Government of the Colony issuing the stock may apply the Act to the stock so issued. Finally, it must be remembered that companies and other bodies or authorities (e.g. the Bank of England and the Pay Office) prescribe special forms for use in certain cases. Their right to do so cannot be questioned where it is made one of the terms on which the property to be dealt with is created or retained under their control, whether by virtue of a statute,! rules of the Supreme Court,? or articles of association; and as such forms are presumably prescribed as a reasonable measure of protection against forgery, it is open to doubt whether in any event the right to insist on their use could successfully be challenged [see Prosser v. Bank of England (1872), L.R. 13 Eq. 611]. The following, therefore, are some practical questions for consideration when a company is asked to act upon a power of attorney: — (1) Is there any reason to doubt the genuineness of the instrument? (2) Was the grant of the power within the capacity of the donor? (3) Is there satisfactory evidence of the identity and capacity of the donee? 1 E.g., s. 22 of the National Debt Act, 1870, and s. 17 of the Finance Act, 1911. 2 E.g., Supreme Court Funds Rules. Rule 48. POWERS OF ATTORNEY (4) Is the form of the instrument (e.g. as to stamp duty) correct? (5) (a) Is the intended act within the apparent scope of the power? (6) Has the company notice of anything indicating that the act is being done for the benefit of the donee or otherwise than on behalf of the donor? At the date of the act is the power irrevocable under s. 126 or s. 127 of the Law and Property Act, 19257 If not, is there any circumstance (e.g. the lapse of time since the date of the instrument) which renders it advisable to call for a statutory declar ation under s. 124? If the donor is a trustee and the circumstances are such that the company has to take notice of the trust, have the provisions of s. 25 of the Trustee Act, 1925, been complied with? CHAPTER XXII PRIVATE COMPANIES Definition. THE expression ‘private company,” until the Companies Act, 1go7, came into force, was commonly used amongst the business community to denote a limited liability company in which no capital was raised by appeals to the public and in which the shares were in a few hands. A private company generally resulted from the transformation of an existing business into a company, the shares being held by the former partners, with such other persons as they chose to admit. Such private companies as described above differ not at all in law from other incorporated companies; they must make all the returns required in the case of other companies, and otherwise comply with the provisions of the Companies Acts. But the Companies Act, 1907, which came into force on July 1, 1908, gave a new and technical meaning to the expression ‘private company.” That Act, in fact, created the private company, properly so called. No alteration was made in the law as to private companies by the Companies (Consolidation) Act, 1908, but, in consequence of the decision in Park v. Royalties Syndicate [(1912), 1 K.B. 330], to the effect that, provided the articles contain the three necessary provisions prescribed by s. 121 of the Act of 1908, the company does not cease to be a private company, although in fact the provisions are not complied with, the Companies Act, 1913, which was to be construed as one with the Act of 1908, was passed. The statute law on the subject is now to be ascertained from ss. 26 and 27 of the Act of 1929, and from the references to private companies contained elsewhere in that Act. By s. 26 of the Companies Act, 1929, a private company is defined as ‘a company which by its articles: ‘(a) restricts the right to transfer its shares; and '(b) limits the number of its members to fifty, not including persons who are in the employment of the company and persons who, having been formerly in the employment of the company, were while in that employment, and have continued after the determination of that employment to be, members of the company; and »RK PRIVATE COMPANIES 289 ‘(c) prohibits any invitation to the public to subscribe for any shares or debentures of the company.’ The provision as to excluding ex-employees from the computation of the permitted fifty members was added by the 1913 Act, but it does not appear that a company registered before the 1913 Act came into force which has failed to alter its articles so as to exclude ex-employees, as well as employees, from the fifty, has ceased in consequence to be a private company. The provisions as to the certificate mentioned below, required in certain cases by s. 111 of the 1929 Act, seem to support this view. On the registration of a private company the memorandum and the articles need only be subscribed by two persons [s. 1], although there is no objection to a larger number of signatories, subject, of course, to the limit of fifty members. A private company may register as a company limited by shares, or a company limited by guarantee with a share capital, or an unlimited company with a share capital. It would seem that it cannot register without a share capital, having regard to the restrictions (a) and (c) (above), which must appear in its articles. On registration, care must be taken to ensure that the articles contain the three necessary provisions set out above. Further, the articles should contain no power to issue share warrants to bearer, inasmuch as the Registrar not unnaturally takes the view that their issue is inconsistent with the status of a private company, since the transfer of the shares specified in warrants could not be restricted. As regards the restriction on transfers, the provision will be complied with by an article, or set of articles, giving to existing members the right of pre-emption. Such provisions were common in the articles of the old private companies. Or a provision will suffice and will be accepted at Somerset House, which gives to the directors the right at their absolute discretion to refuse to register any transfer of shares. To this, however, it is as well to add words requiring them to refuse any transfers, the registration of which would cause the number of members to exceed fifty. The Registrar requires the restrictions to apply to the transfer of all the shares of the company. As to the limit of members, the articles may contain words excluding employees or ex-employees of the company from the limit of fifty, or may limit the number of members to fifty, in which case, if employees or ex-employees hold shares they will count in the fifty. Joint holders rank as a single member [s. 26 \7 290 SECRETARIAL PRACTICE Privileges. As to persons who are in the employment of the company, the ordinary subordinates, e.g. clerks and workmen of all kinds, are clearly included, and it is equally clear that directors are not. As regards managing directors, it has been held that a managing director is not a clerk or servant within the meaning of s. I (I) of the Preferential Payments in Bankruptcy Act, 1888, now s. 264 of the Act of 1929 [Newspaper Proprietary Syndicate (1900), 2 Ch. 349]; but a secretary may be, although, if he does not give his whole time to the service of the company, but pays a clerk to do the bulk of his work, he is not [Cairney v. Back (1906), 2 K.B. 746]. And it has been held that neither directors nor managing directors are ‘persons in the employment of the company’ within the meaning of a clause in the memorandum empowering the company to provide for the welfare of such persons by granting them money or pensions [Normandy v. Ind, Coope & Co. (1908), 1 Ch. 84]. The provision prohibiting public issues, whether of shares or debentures, presents no difficulty. As to public issues. see p- 44-The privileges to which private companies are entitled under the Act are as follows: (1) They may register with a minimum of two members s. 1]. This also involves the right to trade with a minimum of two members. By s. 28 of the Act, if the number of members of a private company is reduced below two, or the numbers of members of any other company below seven, and it carries on business for more than six months while the number is so reduced, every person who is a member of the company during the time that it so carries on business after those six months, and is cognisant of the fact that it is so carrying on business, is severally liable for the payment of the whole debts of the company contracted during that time, and may be sued for the same. This leads to the curious result, in the case of a private company, that an individual may in effect carry on business for six. months with limited liability, although after that time his liability becomes anlimited. (2) They are not required to include in the annual return the copy of the last balance sheet, auditors’ reports and other documents mentioned in s. 110 (3). (3) They need not hold a statutory meeting or deliver to the Registrar or forward to their members a statutorv report fs. 113 (10)]. 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 application 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 meetings 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) 292 SECRETARIAL PRACTICE its existence and are therefore immaterial for this purpose. It would appear that the company is still entitled to the last two privileges, for the sub-section does not state that the company shall cease to be a private company, but that certain provisions shall apply to the company as if it were not a private company. Relief from the consequences of default may be granted by the Court upon grounds set out in the proviso to s. 27 (3) of the Act. By s. 111 of the Act a private company is required to send with the annual return:—(a) A certificate signed by a director or the secretary that the company has not, since the date of the last return, or in the case of a first return since the incorporation of the company, issued any invitation to the public to subscribe for shares or debentures of the company; and (b) if the list of members exceeds fifty, a similar certificate that the excess consists wholly of employees or ex-employees. The object of this provision is that the authorities may be satisfied that the company is still entitled to the privileges of a private company. The reduction of the number of members of a private company below two is a ground for the company being wound up by the Court [s. 168]. Commissions. It has been expressly decided that a private company, like any other company, may pay commissions for subscriptions, or procuring subscriptions for its capital, subject to the provisions of s. 43 of the Act [Dominion of Canada Trading” Syndicate v. Brigstocke (1911), 2 K.B. 648]. The conditions to be complied with are as follows : {1) The payment must be authorised by the articles; (2) The commission must not exceed ten per cent. of the price at which the shares are issued, or the amount or rate authorised by the articles, whichever is the less. (3) The amount or rate must be disclosed in a statement in the form prescribed (see Form 58 in Companies (Forms) Order, 1929), signed in the same manner as a statement in lieu of prospectus (z.e. by the directors, or their agents authorised in writing), and delivered to the Registrar for registration. (4) The amount or rate must be disclosed in any circular or notice, not being a prospectus, inviting subscriptions. (5) The number of shares which persons have agreed for a commission to subscribe absolutely must be disclosed in like manner PRIVATE COMPANIES 293 The secretary of a private company, apart from the Duties of matters specified above, will have the same duties to perform Secretary. as the secretary of any other company, for apart from these matters a private company may do whatever any other company may, and must do whatever any other company must. His work will obviously be lighter in many respects, e.g. in keeping the register posted, in making out the annual summary, and in the matter of transfers. There 1s nothing in the Act to prevent a company, which is not a private company, making in its articles such alterations as are necessary to constitute itself a private company, 1.6. by deleting inappropriate provisions, such as provisions relating to share warrants, provisions relating to public issues, and unsuitable provisions relating to transfers, and inserting the provisions required by s. 26, and thereafter claiming the privileges of a private company. The converse case of the transformation of a private company into a public company was expressly provided for by s. 121 (2) of the Act of 1908. That sub-section was repealed by the Act of 1928, and now by s. 27 (1) of the Act of 1929 (see above) a private company automatically becomes a public company if it alters its articles in such manner that they no longer contain the provisions necessary to a private company. Under the Act of 1908 the power of a private company to convert itself into a public company by altering its articles was expressed to be ‘subject to anything contained in the memorandum or articles.’ These words are not repeated in s. 27, but, semble, are implied: for if there is in the memorandum an express provision that the company shall always be a private company, that provision would be unalterable [s. 4]; while if there was such a provision in the Articles, it would bind the company until the articles had been amended by deleting the provision in accordance with s. 10. The procedure to enable a private company to become a public company, where the memorandum does not forbid 1s accordingly: {r) If the articles forbid the conversion into a public company, to pass ¢ special resolution deleting ITOvision; and, in any case, (2) to pass aud file a special resolution in accordance with 5. 27° (3) to file a statement in lieu of prospectus within fourteen days after the last-mentioned special resolution has been passed [.. ~7 and third Sched:ila] 204 SECRETARIAL PRACTICE The special resolution referred to in (1) and (2) above could be passed at the same meeting. Under the law in force before the commencement of the Act of 1929 the Registrar insisted that s. 72 of the Act of 1908 applied and required a contract signed by each director or his agent to take and pay for his qualification shares (if any). This was probably never the intention of the Legislature, and no such claim can now be made by the Registrar as the provisions of s. 140 do not apply to a company which was a private company before becoming a public company. [S. 140 (4).] CHAPTER XXIII STATUTORY COMPANIES THE name ‘Statutory Companies’ is frequently used to describe that large and important class of companies which are incorporated by special Acts of Parliament for certain specific purposes. The objects of these companies are to work undertakings of a public nature, such as are calculated to be of benefit to the public at large, or to a section of the public; and whilst there is also the intention to make profits for the shareholders in these undertakings, yet so largely are the public interested in the proper working of them, that the legislature has assumed the right to restrict and limit their powers and to impose upon them conditions intended to be for the general welfare of the community, to whom the proper working of these undertakings is a matter of grave concern. Among the companies of this class are railway companies, gas companies, water companies, dock and harbour companies and many others; in fact, it is not too much to assert that the companies in question are, from the public point of view, the most important in existence, and some of them are perhaps also the largest commercial undertakings in the country. As stated above, each of this class of companies owes its Special Act. existence to a special Act of Parliament whereby its powers are carefully defined. It is, as Bowen, L.J., has said, ‘a simple statutory creature,’ and in this respect it resembles a company incorporated under the Companies Acts. ‘It is made up of persons who can act within certain limits, but, in order to ascertain what are the limits, we must look to the statute. The corporation cannot go beyond the statute.’ In the case of a company incorporated under the Companies Acts, the memorandum of association, together with the Companies Act, 1929, must be looked at to ascertain its powers. In the case of a statutory company its special Act must alone be looked at. And whilst in the case of a company incorporated under the Companies Acts its articles of association must be examined in order to ascertain by what regulations it is governed, in the case of a statutory company its special Act expressly or by reference contains also its code of reculations. 206 SECRETARIAL PRACTICE Companies As long ago as 1845 the Companies Clauses Consolidation Clauses Act, Act (8 & 9 Vict. c. 16) was passed, the object of which is well 1845. expressed in its preamble (repealed by the Statute Law Revision Act, 1891): ‘Whereas it is expedient to comprise in one General Act sundry provisions relating to the constitution and management of Joint Stock Companies, usually introduced into Acts of Parliament authorising the execution of undertakings of a public nature by such companies, and that as well for the purpose of avoiding the necessity of repeating such provisions in each of the several Acts relating to such undertakings as for securing greater uniformity in the provisions themselves.’ The full title of the Act is, ‘An Act for consolidating in one Act certain Provisions usually inserted in Acts with respect to the Constitution of Companies incorporated for carrying on Undertakings of a Public Nature.” It has been added to in subsequent years, the principal addition being the Companies Clauses Act, 1863 (26 & 27 Vict. c. 118), but no substantial amendment has taken place in the original great piece of legislation relating to statutory companies. The Act of 1845 and Part III of the Act of 1863 apply to all statutory companies except so far as modified by the special Act. The remainder of the Act of 1863 only applies in so far as incorporated by the special Act. (See also the Companies Clauses Act 1869, and the Companies Clauses Consolidation Acts, of 1888 and 1889.) The advantages of these Acts, which are always incorporated in special Acts, occasionally with slight alterations, additions or omissions, are obvious. They secure practical uniformity in the internal management of statutory companies. The enormous differences in matters of detailed management, which constantly appear when the articles of association of companies incorporated under the Companies Acts are compared, are thus almost entirely eliminated. One important result of this uniformity is the diminution of litigation. Applications for special Acts, whether in the case of new companies, or in the case of existing companies seeking extended powers, involve many formalities. Besides the preliminary advertisements in the London Gazette and local newspapers, the deposit of the Bill in Parliament, the appearance by counsel with witnesses before Committees of both Houses of Parliament, to meet and deal with the opposition of local authorities and other more or less interested persons or bodies, there are numerous other matters to be dealt with. In the case of applications by existing companies as well as STATUTORY COMPANIES 297 new companies, close attention to the Standing Orders of Parliament relating to Private Bills is essential. These matters are generally attended to by Parliamentary Agents, but the secretary of an existing company is required to give notices calling a special meeting (sometimes called a Wharncliffe Meeting), when the shareholders consider the Bill deposited, and he will be required to prove by affidavit the due and proper summoning of the meeting and the result of the voting thereat. All applications for special Acts are most carefully scrutinised in committee. Involving, as they may do, the compulsory acquisition of land, and interference with existing rights of all kinds, they will not be granted without adequate examination and consideration, and without the insertion in the Bills of clauses of all kinds ensuring the due protection of the rights of others and adequate benefit to the public. Besides the Companies Clauses Acts, the Special Act usually incorporates the Lands Clauses Consolidation Acts, and the appropriate general Acts relating to particular undertakings, e.g. the Railways Clauses Acts, the Waterworks Clauses Act, the Gasworks Clauses Acts, etc. Furthermore, the clauses from time to time appearing in the Model Bills will in general be incorporated. Examples of the scope of the Model clauses is seen in the Railway section, dealing with payment of interest out of capital, additional capital, borrowing powers, etc.; in the Tramway section, as to fares, rates and charges; in the Gas section, as to capital and the sale of it by auction or tender, the limitation of profits, etc. The secretary of a statutory company will necessarily be fully acquainted with the provisions of his company’s special Act or Acts, and the incorporated Acts. The matters which are provided for in the Companies Clauses Acts for the most part cover the same ground as the articles of association of a company incorporated under the Companies Acts. They include detailed provisions for the general management of the company. STATUTORY COMPANIES (REDEEMABLE STOCK) ACT, IQIS5. The full title of this Act is ‘An Act to enable certain Statutory Companies to create and issue Preference Shares or Stock and Debentures or Debenture Stock, so as in each case to be redeemable.” It applies to ‘any railway company, canal company, dock company, water company or other company incorporated by special Act, who are for the time being authorised under such an Act to construct, work. Provisions of Companies Dlauses Acts. Redeemable Stock. 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 establishment 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 afterwards. 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 resemblance 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 STATUTORY COMPANIES 299 borrowed largely from the law already existing and applicable to statutory companies, yet in many other cases the divergence is equally strongly marked (see e.g. s. 18 of the Act of 1845, as to transmission, referred to on pp. 302, 303). For this reason very great care is necessary in seeking to apply to statutory companies decisions of the Courts given in regard to companies under the Companies Acts. They may or may not be applicable, according as the wording of one section, or of an article, sufficiently resembles or materially differs from the wording of another section. Very many of the decisions are in point and of value; others are irrelevant and useless, and misleading to the secretary of a statutory company. In considering in any particular case the provisions of the Companies Clauses Acts, the special Act must always be consulted, as the application of some of the clauses in the general Acts is often excluded or limited. In regard to the holding of general meetings, only such business shall be transacted at an ordinary meeting as the 1845 Act or the Company’s Special Act appoints, unless special notice has been given in the advertisement convening it. Every general meeting of shareholders, other than an ordinary meeting, is an extraordinary meeting (s. 68 of the 1845 Act). Fourteen clear days’ notice must be given of all meetings, and the quorum is, if not prescribed, an aggregate holding of not less than one-twentieth of the capital, and being in number not less than twenty members or one member for every £500 of such required proportion of capital, whichever be the smaller figure [s. 72]. When the shareholder is a body corporate a voting proxy may be any member of the body, though not personally a shareholder in the company [s. 2 of the Companies Clauses Consolidation Act, 1888 as amended by the Companies Clauses Consolidation Act, 1889]. It would appear that in the case of a statutory company, Proxies. having regard to para. 62 of the standing orders of Parliament, all blanks in the form of proxy for use at general meetings, or at any rate the name of the proxy, must be inserted by the shareholder, and that neither the company nor its secretary has implied authority to fill in any blanks. Statutory companies are not required to use the word Limited’ as part of their name, nor are they registered. A point of considerable interest to the secretary of a statutory company is that unless otherwise provided in the special Act, his remuneration is fixed by a general meeting of the company [s. g1 of the Act of 1845). General Meetings. 300 SECRETARIAL PRACTICE Duties of Secretary. Register of Shareholders. Shareholders’ Address Book. Consolidation. The duties of a secretary of a statutory company are necessarily of the same kind as fall to the lot of secretaries of other companies, and need not be repeated here. In the case of statutory undertakings, however, such matters as assessments, and the continuous growth of legislative enactments (e.g. those dealing with workmen’s compensation and national insurance) and departmental regulations, are probably in general more before his notice than in the case of many registered companies. There are numerous differences between a Statutory Company and a company under the Companies Acts, and the more important of these are noticed below. S. 9 of the Companies Clauses Consolidation Act, 1845, requires a statutory company to keep a register of shareholders. The section is as follows: — The Company shall keep a book to be called the ‘register of shareholders’; and in such book shall be fairly and distinctly entered, from time to time, the names of the several corporations, and the names and additions of the several persons entitled to shares in the company, together with the number of shares to which such shareholders shall be respectively entitled, distinguishing each share by its number, and the amount of the subscriptions paid on such shares, and the surnames or corporate names of the said shareholders shall be placed in alphabetical order; and such book shall be authenticated by the common seal of the company being affixed thereto; and such authentication shall take place at the first ordinary meeting, or at the next subsequent meeting of the company, and so from time to time at each ordinary meeting of the company. It will be noticed that there is no right of inspection given of the register of shareholders; there is, however, a right to require a copy [Mutter v. Eastern and Midlands Railway (1888), 38 Ch. D. 92]. In addition, by s. 10, a ‘shareholders’ address book’ is required to be kept. This must contain the names in alphabetical order, places of abode and descriptions of the shareholders, so far as known to the company, but particulars of their holdings are not required to be stated. It is open to the inspection of shareholders gratis, and copies may be required on payment. : Further, when shares have been consolidated into stock, pursuant to s. 61 of the Act, the company shall, by s. 63, ‘from time to time cause the names of the several parties who may be interested in any such stock as aforesaid, with STATUTORY COMPANIES 201 the amount of the interest therein possessed by them respectively to be entered in a book to be kept for the purpose, and to be called “ The Register of Holders of Consolidated Stock”; and such book shall be accessible at all reasonable times to the several holders of shares or stock in the undertaking.’ Trusts should not be recognised by a statutory company, whether by any entry in the register or in any other manner see s. 20]. As regards transfers, subject to any provision in the special Transfers. Act, shareholders have an absolute right of transfer [s. 14], subject to all calls due on the shares having been paid, and subject also to the restriction that, when a call has been made, the shares cannot be transferred until it has been paid fs. 16]. Transfers must be by deed; the deed must be duly stamped and the consideration truly stated [s. 14}. Although a statutory form of transfer is scheduled to the Act, the common form of transfer (Form No. 16) is generally used and invariably accepted. There is thus practical uniformity in the form of transfers, whether a company be a statutory company or not. As to debenture bonds, the Companies Clauses Act, 1845, authorises the borrowing of money on mortgage or bond [s. 38], and the succeeding clauses define the form of the bond and register and also define the form of transfer, which differs from the common form used for stocks and shares. I, AB. of in consideration of the sum of paid by G. H., of do hereby transfer to the said G. H. his executors administrators and assigns a certain bond number made by the Company to bearing date the dav of for securing the sum of and interest (or if such transfer be by endorsement ‘the within security’) and all my right estate and interest in and to the money thereby secured. In witness whereof I have hereunto set my hand and seal, etc., etc. The creation of debenture stock in place of the borrowing by mortgage or bond was allowed by the Companies Clauses Act, 1863 (Part III). A good many companies still exercise their borrowing powers by the issue of debenture bonds, and it should be particularly noted that the common form of transfer does not apply to these. Bonds. Transfers. 302 SECRETARIAL PRACTICE The duties of the secretary, upon a duly executed deed of transfer being delivered to him, are prescribed by s. 15, and are as follows: — I. He must keep the transfer; 2. He must enter a memorial thereof in a book to be called the ‘register of transfers’; 3. He must endorse such entry on the deed of transfer ; 4. He must, on demand, deliver a new certificate to the purchaser; 5. He may, for every such entry, together with the endorsement and certificate, demand a sum not exceeding the prescribed amount, or if no amount be prescribed [s.e. by the company’s special Act] a sum not exceeding 2s. 64. He must, if the purchaser requires it, instead of giving a new certificate, make and sign an endorsement of the transfer on the old certificate; the old certificate with the signed endorsement is equivalent to a new certificate. As regards the above, the duty of endorsing the deed of transfer seems hardly necessary in the days of certificates, and it has been suggested that it was inserted inadvertently in the Act of 1845. A private Act of 1801, authorising the construction of a railway from Wandsworth to Croydon ‘41 Geo. III. c. xxxiii.) required the endorsement on ‘deeds of conveyance’ of shares in the undertaking, which deed was to be kept by the purchaser ‘as his security,” certificates not having then been introduced. It is the modern practice to issue a new certificate and not to endorse the old certificate. The legal interest in the shares transferred passes to the purchaser upon the delivery of the transfer, duly executed, to the secretary. The duties of the secretary as regards certification, scrutiny of the transfer, and of any power of attorney lodged, will be substantially the same as in the case of a company under the Companies Acts. He must, in short, satisfy himself that the deed of transfer is ‘duly executed’ and in order in every detail. If he returns the transfer because of some failure to comply with the provisions of the Act, it is deemed not to have been delivered and therefore not to pass the legal interest [Nanney v. Morgan, 37 C.D. 346]. There are, however, some special points in which, owing to the provisions of the Companies Clauses Act, 1845, the secretary of a statutory company cannot follow the practice STATUTORY COMPANIES 303 of the secretary of a registered company. Thus, if a transfer be lodged for registration after the death of the transferor and after probate or letters of administration have been exhibited, it cannot be acted on, since (as appears below) the names of the personal representatives of the deceased transferor would already be on the register in their individual capacities, and they alone would be entitled to deal with the shares. And if the legal personal representatives of a deceased proprietor have been duly registered, a transfer by them should not be accepted if they are described as executors or administrators, although in the case of fully paid shares or of stock the fact that they are so described seems immaterial. It does not appear to be competent for a statutory company to make regulations as to such matters as allowing more than one account on the same transfer form, or limiting the number of holders in a joint account, or permitting more than one account in the same name or names, or allowing transfers of more than one class of stock on the same deed. None the less there seems to be no reason why a statutory company should not have its own practice in such respects, and adhere to it until forced in individual cases to abandon it, There is an important difference in the matter of trans- Transmission between statutory companies and companies under mission. the Companies Acts. By s. 18 of the Companies Clauses Consolidation Act it is the duty of a secretary upon proof of the transmission of interest of a proprietor, to enter the name of his representative on the register. Such representative therefore becomes a shareholder in his personal capacity, with all the consequent rights and liabilities. It appears that it is not necessary for the secretary to have the consent of his board before performing this statutory duty, but that he ought to perform it at once. There is thus a primd facie right in the company to register the representative in his personal capacity, upon the necessary formalities being complied with. But if the representative does not desire to have the shares registered in his name, he ought to be allowed a reasonable time to sell the shares, and to produce a purchaser who will take a transfer of them [Buchan’s Case (1879), 4 A.C. 549], and it is doubtful whether he will be compelled to become personally liable by becoming registered without any request express or implied by him. S. 18 provides for transmission ‘in consequence of the death or bankruptcy or insolvency of any shareholder, or by any other lawful means than by a transfer according to 304 SECRETARIAL PRACTICE the provisions of this or the special Act.” The transmission is to be authenticated by a declaration in writing of a formal character, ‘or in such other manner as the directors shall require.’ S. Ig requires the declaration, in the case of transmission by will or on intestacy to be produced to the secretary, together with probate or letters of administration, or an official extract therefrom. Upon the declaration being left with the secretary, he is to enter the name of the person entitled by transmission on the register of shareholders s. 18]. It is incorrect and contrary to the Act for any mention of a representative capacity to appear on the register of a statutory company, or for the company to recognise the representative capacity in any way. Upon production of probate or letters of administration, the secretary is to make an entry of the declaration in the register of transfers. In the absence of a declaration, it appears that a form of request by the executors or administrators to be entered on the register should be required [Buchan’s Case (1879), 4 A.C. 549; and see Form 25]. The declaration itself, if produced, is probably sufficient evidence of a request. The practical result of the words, ‘or in such other manner as the directors shall require,’ seems to be that the secretary of a statutory company in satisfying himself as to the right of a representative, shall require the same evidence as is required by the secretary of a company under the Companies Acts. If probate be granted to the attorney of an executor, he should be registered as the holder of the stock in his personal capacity, without any reference to his capacity as an attorney or executor. It follows from the fact that a person entitled by transmission is, upon proper evidence being furnished, entitled to be registered, that if an executor or administrator is also the beneficiary, he can be registered without a transfer being executed. Since executors, when entered upon the register, pursuant to s. 18, become joint shareholders in their individual capacities, a transfer by them must be executed by all the executors [Barton v. London & North Western Railway (1889), 24 Q.B.D. 77]. Should the register of a statutory company require to be altered in consequence of a change of name, whether by marriage, acquisition of title or otherwise, similar evidence should be required as in the case of an ordinary limited company. STATUTORY COMPANIES 305 The fee which a statutory company may demand upon transmission is, in the absence of any prescribed amount, a sum not exceeding 5s. [s. 18]. As already stated, a fee of 2s. 64. may be demanded on every transfer. Apart from these two fees, it does not appear that a statutory company has any power to charge any other fees in respect of matters connected with transfers and transmission; but it is usual for a similar fee to be charged on registration of probate or letters of administration, on proof of marriage or death, and on registration of powers of attorney; and until the right to demand these fees is challenged there seems no reason why the practice should not be continued. CHAPTER XXIV SCOTTISH COMPANIES Trusts. THE Companies Act, 1929, applies generally only to England and Scotland. Certain parts of the Act are expressly limited to companies registered in England, and s. 384 provides that nothing in the Act except the provisions thereof which relate expressly to companies registered or incorporated in Northern Ireland or outside Great Britain shall apply to or in relation to companies registered or incorporated in Northern Ireland, whilst in some cases provisions applicable only to companies registered in Scotland appear. It is proposed in this chapter to point out and consider the principal portions of the Acts relating to companies before liquidation which are limited to Scottish companies, and those from the operation of which Scottish companies are excluded, and to indicate the principal points of difference between Scottish and English business practice in connection with these statutory provisions. The most important differences appear in the matter of the recognition of trusts and the practice as to transfers, etc., and in the law as to debentures. S. ror of the Act of 1929 prohibits the recognition of trusts on the registers of companies registered in England. The existence of a trust is commonly recognised by Scottish companies, and persons may be registered in any representative capacity, e.g. as executors, or trustees, of a deceased person; ‘curator bonis for ... ; ‘factor loco tutoris to . . .”; ‘in trust for . . .’; for behoof of ...”; ‘for and on behalf of . . .’; or as office-bearers. But registration as trustees does not limit the holders’ liability for calls to the amount of the trust estate in their hands; they are as completely liable as if the trust were not disclosed. A majority of the accepting and acting trustees or executors usually form a quorum and can act so as to bind the estate under their charge, and a transfer signed by such quorum is therefore quite in order unless the deed of trust otherwise provides [see the Trusts (Scotland) Act, 1921, s. 3]. When changes take place in the personnel of the trustees or executors by death. resignation, or the 206 SCOTTISH COMPANIES 307 assumption of new trustees, effect is given in the register to such changes on production to the company of an extract from the Register of Deaths, the Minute of Resignation, or the Deed of Assumption, as the case may be. Where buyers are described in a transfer as office-bearers, e.g. president, secretary, and treasurer, it is usual to add the words ‘and their successors in office’ after the words ‘do hereby bargain, sell, assign, and transfer to the said transferees.” When that is done, all that is usually required, before substituting in the register the name of any new office-bearer for that of an office-bearer who may have died or demitted office, is the production of a certified extract from the minutes of meeting of the company, institution, or society at which such new appointment is made, in some cases supported by a statutory declaration by a responsible person conversant with the facts. Until a recent date married women were under certain legal disabilities which necessitated the consents of husbands being obtained to transfers and other deeds granted by them. This resulted mainly from what was known as the husband's ‘right of administration’ over the wife's property. The Married Women’s Property (Scotland) Act, 1920, which came into force on 23rd December, 1920, has brought about an important change in the law. It is now enacted that after that date the property of a married woman is not to be subject to the right of administration of her husband, which right is by the Act wholly abolished, and a married woman is, with regard to her estate, to have the same powers of disposal as if she were unmarried. It is also provided that any deed or writing executed by her with reference to her heritable estate in Scotland, or to her moveable (i.e. personal) estate, is to be as valid and effectual as if executed by her with consent of her husband according to the former law and practice. It is therefore now unnecessary for a husband to execute a transfer of shares or stock belonging to his wife, whether the wife’s name appears as transferor or as transferee. The Act also provides that a married woman shall be capable of entering into contracts, of incurring obligations and of suing and being sued, as if she were not married, and that her husband shall not be liable in respect of any contract she may enter into or obligation she may incur on her own behalf. This would cover the case of a wife granting a Letter of Indemnity to a company in respect of a lost share certificate and the issue of a new one in lieu thereof. Married Women. 308 SECRETARIAL PRACTICE Survivorship in Joint Accounts. Where it is intended to register shares or stock of a Scottish company in the names of two or more persons with a destination to the survivor, words to that effect must ordinarily be inserted in the transfer, as survivorship is not implied under Scots law. The words necessary are ‘and the Survivor of them,” or ‘and the Survivors or Survivor of them’ placed after the words ‘do hereby bargain, sell, assign, and transfer to the said A4.B.,” although some companies pass transfers with the words written immediately after the names and addresses of the buyers. Failing the inclusion in a transfer in favour of, say, 4. and B. of the clause referred to, and in the absence of any special provision to the contrary in the company’s articles of association, they would be held to have an equal and separate interest in the shares or stock, and, on the death of one of them, his confirmation or probate would require to be exhibited and his executors’ names would be noted in the register in respect of his share, and, in the event of a sale, the transfer would require to be executed by the survivor and by the executors of the deceased. Of course, where the survivorship clause is registered, and one of the holders dies, production of evidence of death is all that is necessary to enable a company to remove his name. In any subsequent transfer by the survivor he should be described as ‘Survivor in a joint account with deceased.” There is, however, a growing practice in the case of Scottish companies to make special provision in the articles of association that where shares are registered in joint names without qualification the survivors or survivor are alone to be recognised as holding the title following upon a death, thereby bringing the practice more into line with that prevailing in England. It may be mentioned here that shares or stock of Scottish companies may also be registered in joint names so that a quorum only of the holders require to sign. This method of registration has been adopted by the nominees of some of the banks in Scotland who are described in transfers as, say, ‘A.B., C.D., and E.F., all of the Bank, Limited, Glasgow, and the survivors or survivor of them, any two being a quorum.’ It should be noted that although under the law of Scotland partnerships may own property and may quite competently be registered as stock or share holders and act as transferors or transferees thereof, there are obvious objections to registering a firm as such, and the practice should be discouraged. Execution by The execution of a deed by a mark is not valid in Scotland. Mark. The deed must be executed for the person unable to write by a Justice of the Peace or Notary Public in the presence Partnerships. SCOTTISH COMPANIES 300 of two witnesses in the following terms, which must be actually written by the Justice of the Peace or Notary Public himself: By authority of the above-named and designed , who declares that he cannot write on account of y A, Notary Public (or, Justice of the Peace for the County of ) subscribe these presents for him, he having authorised me for that purpose and the same having been previously read over to him all in presence of the witnesses hereto subscribing who subscribe this docquet in testimony of their having heard and seen authority given to me as aforesaid and heard these presents read over to the said [Sioned Notary Public (or, Justice of the Peace). (Two witnesses, who should add their designations). Although the use of the common form of transfer (see Testing Form 16) is now practically universal in Scotland, it may Clause. prove interesting to secretaries to give the following clause (called the testing clause), whereby certain special forms of transfer require to be authenticated, if executed in Scotland: In witness whereof, these presents [consisting of this and the preceding pages written by on pages duly stamped] are subscribed by the said 4.B. (the party) at the day of One thousand nine hundred and year, in presence of these witnesses, C.D. and E.F. (designing them). 4.B. Signed) C.D., witness EF. witness Powers of attorney and other Scottish legal documents Registration may be registered in the Books of Council and Session in of Edinburgh, where the originals are preserved. The produc- Documents. tion of an ‘Extract Registered’ copy from the books mentioned of a power of attorney, a deed of assumption, or a minute of resignation, or other legal instrument, is equivales’ to the exhibition of the deed itself. The Scots law as to debentures requires special atten- Dabentures. tion in view of the great differences which exist between the laws of England and Scotland in this respect. 310 SECRETARIAL PRACTICE According to the common law of Scotland no security can be effectively created over moveables or personal property vetentd possesstone. This general rule has been to some extent modified by statute, but broadly speaking the law remains as stated. In order, therefore, to create an effective charge or security of such property, delivery, either express or constructive, must have been given to the creditor and retained by him. In the case of moveables, such as stockin-trade, etc., actual delivery or transfer to the creditor—an operation, however, which, consistently with the proper carrying on of business, is usually found to be more or less impracticable—leaves no room for doubt, but the same result may be achieved constructively, e.g. by the transfer of goods in store from the name of the owner and borrower into that of the lender. Similarly, if obligations are assigned, the assignment must be intimated to the obligant; e.g. the assignment of uncalled capital by intimation to the shareholders who are liable. One result of the rule referred to is to render the existence of the floating charge known to English law impossible in the case of a company registered in Scotland over Scottish assets [see Clark v. West Calder Oil Company (1882), 9 R. 1017; Ballachulish Slate Quarries v. Menzies (1908), 45 S.L.R. 667]. Accordingly, in Scotland, debentures issued under the Companies Acts are confined to three classes: (1) naked debentures, which are no more than a personal obligation by the company for repayment of money advanced on loan; (2) debentures secured over moveable or personal rights or property by actual or constructive delivery or transfer to the lenders or trustees for lenders; and (3) mortgage debentures secured over heritable or real property. Naked As to (1), naked debentures, the lender is, subject to the Debentures. variation in procedure in the matter of enforcing recovery, practically in the same position as a lender under a naked debenture of an English company. The rights of debentures of this class are now not infrequently regulated by the terms of a separate deed of trust, under which trustees are appointed, instead of being expressed in the debenture itself. =~ The advantages of such an arrangement in case of default lie chiefly in the convenience by which the claims of the debenture holders in case of liquidation are advanced and controlled by the trustees in the general interest in terms of the provisions of the trust deed. But the existence of such trusts, of which there are now many, does not carry the actual richts of the debenture holders as regards security Floating Charge. SCOTTISH COMPANIES ~ 17 any further than is the case with the holders of ordinary naked debentures. As to (2), debentures secured over moveable or personal Security over property, either by delivery or transfer to the actual lenders Moveable or trustees for their behoof, these are, if shipping property Property. be excepted, of comparatively rare occurrence. Many debentures are, however, effectively charged over ships by mortgage, or by transfer of the vessels themselves, or in some cases, of the shares of the limited companies owning them, to the lenders or trustees on their account. In the former case the mortgage or bill of sale must be recorded on the ship’s register, and in the latter a transfer of the shares must be registered by the company. In such cases the trust deed usually makes provision for the changing of the security according to the exigencies of business, but so that the value will always be maintained. There are other cases of debentures in which shares or stocks of ordinary limited companies are impledged in security, but as already indicated, these are of comparatively rare occurrence. As to (3), debentures secured over heritage, the system of Security over land registration in Scotland lends itself very readily to the Heritage. creation of effective securities over land and buildings by mortgage debentures, the registration of the necessary deed in the Register of Sasines, assuming its validity on other grounds, creating a preference in favour of the grantees. This security is usually created by an ex facie absolute conveyance to trustees for the debenture holders; on registration of which these trustees, subject to the provisions of the separate deed of trust, become vested in the property as if they were absolute owners. Under the deed of trust provision is made for the administration of the trust, the use by the company of the subjects conveyed so long as there is no default, the enforcement of the debenture holders’ rights in case of default, etc., and as a rule the trustees are entitled, though not bound, to satisfy themselves that the security subjects are being duly maintained and kept insured against loss by fire. The deed of trust, as a matter of fact, runs largely on the lines of similar deeds by English companies securing mortgage debentures over property there. (See Chapter XVIII.) It may be worth noticing that certain leases which, in the Long Leases. ordinary case, could not be effectively charged, may be made the subject of a good security. By the Registration § Long Leases Act of 1857 it was made lawful to record in the Register of Sasines any lease of heritage in Scotland for a period of thirty-one vears or upwards, and any assignations 312 SECRETARIAL PRACTICE of such leases, the effect of which was to make such leases and assignations during their subsistence as effective against singular successors as if they were ordinary feudal conveyances of land. Accordingly, it is not uncommon, particularly in the case of coal and mineral companies, to have leases answering the requirements of the Act as to duration, such leases then becoming susceptible to being charged or mortgaged by the company, if it desires to borrow, as security for debenture holders or other lenders, without the necessity of actual possession by the security holders. Registration = The question has been canvassed as to whether a floating of Mortgages. charge of a company registered in England would be effective aver moveables in Scotland, and, on the other hand, whether a floating charge purporting to be given by a company registered in Scotland over moveables in England would be valid. The question raises an interesting argument as to whether the law of the domicile of the company, or the law of the place where the moveables are situated, should prevail, but so far there does not appear to be any authoritative decision on the subject. In any event, the security will be void unless it is registered with the Registrar of Companies in England in view of s. go of the Companies Act, 1929. S. 93 of the Act of 1908 as to registration of charges, etc., with the Registrar of Companies did not apply at all to companies registered in Scotland, but the corresponding section of the Act of 1929 [s. 79] does affect companies registered in Scotland to the extent that if a Scottish company having an established place of business in England creates a charge on property in England or acquires property in England subject to a charge which would, if the charge were created or the property were acquired by an English company, required to be registered in England, such charge must be registered in England, notwithstanding that the company is a Scottish company [s. go]. [See also s. 9I.] Under the Act of 1908, particulars of charges given by companies registered in England over property situate in Scotland had to be duly filed with the Registrar of Companies in England and the deed containing the charge had to be delivered to him within twentyone days after the date of the creation of the charge. In actual practice, this led to difficulty since the registration in the Register of Sasines invariably took considerably more than the limit of twenty-one ‘days provided by the Act of 1908. This difficulty will not arise under the Act of 1929, for by s. 79 (3) where a charge comprises property situate in Scotland and registration in Scotland is necessary to make the charge valid or effectual according to the law of that country, SCOTTISH COMPANIES 3I3 it is sufficient to deliver to the Registrar in England a copy verified in the prescribed manner of the instrument creating or evidencing the charge together with a certificate in the prescribed form stating that the charge was presented for registration in Scotland on the date on which it was so presented. In order to prevent the possibility of misapprehension, it may be added that the provisions of s. 88 of the Act of 1929 as to the keeping by the company itself of a register of charges, in which are to be entered all charges specifically affecting property of the company, and all floating charges on the undertaking or any property of the company, are applicable to companies registered in Scotland as well as to those registered in England. Further, the annual summary which a company must file under ss. 108-110 of the Act of 1929 must include, in the case of companies registered in Scotland as well as those registered in England, a statement of the total amount due by the company in respect of ali mortgages and charges. It may be interesting to note that a question about which considerable doubt existed for some time, namely, the validity of debentures to bearer in Scotland, has been set at rest by s. 106 of the 1908 Act, re-enacted by s. 77 of the Act of 1929, which declares such debentures to be valid and binding according to their terms. The difficulty arose because of the provisions of an old Scottish Act making invalid all deeds issued blank as to the name of the creditor. Bond and debenture stock may also be issued under the Statutory Companies Clauses Acts of 1845 and 1863, which, along with Companies. certain other Acts, regulate the share and loan capital of railway companies and other similar public undertakings (see Chapter XXIII). The bonds contemplated by the first Act are naked debentures, though the word ‘debenture’ does not itself appear, but if a mortgage deed be also granted, the assignment of the company’s undertaking, &c., to the creditor in security of his debt, is declared to have the full effect of an assignation duly completed. This, it will be seen, is an exception to the common rule already mentioned, and its effect is to create a valid statutory security on the property assigned, very much in the nature of a floating charge in England. It must be noted, however, that this is inapplicable to companies operating under the Companies Act, 1929. In the same way debenture stock issued under the Companies Clauses Act, 1863, is a statutory charge in the nature of a perpetual annuity upon the undertaking preferable in character to all stocks or shares. and it mav in case of default 314 SECRETARIAL PRACTICE be enforced by application for the appointment of a Judicial Factor. Again, that is a provision peculiarly applicable to companies incorporated under these special Acts and not to ordinary limited liability companies. Other Points A few other points as to companies registered in Scotland Sadler 1920 may be noticed. By ss. 3 and g of the 1929 Act, it is expressly ct. provided that the attestation of the signatures to the memorandum and articles is sufficient in Scotland, as well as in England, if made by one witness. S. 29 (4) of the Act provides that any deed to which a company is a party shall be held to be validly executed in Scotland on behalf of the company if it is executed in terms of the provisions of the Act or is sealed with the common seal of the company and subscribed on behalf of the company by two of the directors and the secretary of the company, and such subscription on behalf of the company shall be equally binding whether attested or not. This section incorporates s. 56 of the Conveyancing (Scotland) Act, 1874. It is customary for the signatures of the directors and secretary to be attested by witnesses. S. 370 of the Act provides that where a company registered in Scotland carries on business in England, the process of any court in England may be served on the company by leaving it at or sending it by post to the principal place of business of the company in England addressed to the manager or other head officer in England of the company. The person issuing out the process must also send a copy thereof by post to the registered office of the company. CHAT TL. FOREIGN COMPAIl ForeiGN CoMPANIES (which expression in this chapter means Foreign companies incorporated outside Great Britain) may be Lipman ’ divided into two classes according to whether or not they basin oss Hi have established their place of business in Great Britain. Great Britain Part XI of the Act contains special provisions which apply [s. 343] to all companies having an established place of business within Great Britain whether such place of business was established before or after the 1st November, 1929. In this connection it must be remembered that under s. 352 a share transfer office or share registration office is a ‘place of business’ for the purposes of Part XI of the Act. By s. 344 (1) any foreign company establishing a place of business within Great Britain after the 31st October, 1929, must within one month from the establishment of the place of business deliver to the Registrar for registration the following documents: — I. A certified copy of the documents constituting or defining the constitution of the company and if such documents are not in the English language a certified translation thereof. A list of the directors of the company containing the same particulars as would be required in the case of directors of an English company. [See s. 144]. The names and addresses of some one or more persons resident in Great Britain authorised to accept on behalf of the company service of process and any notices required to be served on the company. As to the proper method of certification of the abovementioned documents, see rules 2 and 5 of the Companies (Forms) Order 1929. The forms prescribed by the Board of Trade for use under s. 344 are scheduled to this order. (See Forms 1 F. to 3 F.) In order to insure the completeness of the record as regards all companies within Part XI, the following companies if they have a place of business ii Great Britain on the 1st November 1929, must before the +st December 1029 2. 316 ~~ SECRETARIAL PRACTICE deliver for registration the same documents as a foreign company, establishing its place of business here after the 31st October 1929: — I. Any company incorporated outside Great Britain whose place of business was first established before the 1st April 1909. 2. Companies incorporated in Northern Ireland before the 1st January 1922. 3. Companies incorporated in the Irish Free State which established a place of business in Great Britain before the 27th March 1923 [s. 344 (2)]. Moreover any foreign company to which Part XI applies, other than foreign companies mentioned in s. 344 (1) and (2) (see above), will, if they have not already delivered to the Registrar all the documents and particulars specified in paragraphs (a) (b) and (c) of s. 274 (1) of the Act of 1908 as amended by the Companies (Particulars as to Directors) Act 1917, continue subject to the obligation to deliver such documents and particulars within one month after it established a place of business within Great Britain. [S. 344 (3)-] Particulars of any alteration in any of the documents, or particulars delivered for registration pursuant to s. 344, must be delivered to the Registrar for registration within twentyone days of the date of the alterations being made, or within twenty-one days after the date on which notice thereof could in due course of post have been received in Great Britain 's. 346 and Rule 3 of the Companies (Forms) Order, 1929). The return should be in the form set forth in Nos. 4F to 6F of the forms scheduled to this order. Every foreign company to which Part XI applies is under similar obligations as to making out a balance sheet containing such particulars, and including such documents as are imposed on an English company by ss. 123 to 129. It must deliver to the Registrar for registration a copy of such balance sheet (i.e. the balance sheet, including the above-mentioned particulars and documents) together with a certified translation if the balance sheet is not in the English language [s. 347]. The requirements of ss. 123 to 129 are considered on pp. 177 to 181 above. Particulars Every foreign company to which Part XI applies must bo he iictuiled (i) state the country in which the company is incorporated documents. in every prospectus issued by it which invites subscriptions for its shares or debentures in Great Britain; Balance Sheet. FOREIGN COMPANIES 31% (ii) conspicuously exhibit on every place where it carries on business in Great Britain the name of the company and the country in which it is incorporated; (iii) cause the name of the company and of the country in which it is incorporated to be stated in legible characters in all billheads and letter paper and in all notices, advertisements and other official publications: (iv) if the liability of the members of the company is limited cause notice of that fact to be stated in legible characters in every such prospectus as above-mentioned and in all billheads, letter paper, notices, advertisements, and other official publications of the company in Great Britain and to be affixed on every place where it carries on business. [S. 348]. Having regard to s. 145 all trade catalogues, trade circulars, show cards and business letters on or in which the name of any such foreign company appears, and which are issued or sent by the company to any person in any part of His Majesty's Dominions must also state in legible characters the particulars as to directors required by s. 145, unless the company established its business in Great Britain ‘before the 2 November 1916. (See above p. 149.) Any process or notice requiring to be served on a company to which Part XI of the Act applies will be sufficiently served if addressed to any person whose name has been filed with the Registrar under s. 344 and left at or sent by post to the address so filed. If the company has made default in filing the name and address of a person authorised to accept service on its behalf, or if all the persons whose names and addresses have been so filed are dead, or have ceased to reside at the addresses so filed, or refuse to accept service or for any reason cannot be served, service may be effected by leaving the process or notice at or sending it by post to any place of business established by the company in Great Britain [s. 349]. If a company incorporated in the Channel Islands or the Companies Isle of Man has a place of business in England or Scotland Incorporated it must comply with all provisions of the Act requiring Be documents to be forwarded to or filed with the Registrar rgjands and of Companies (other than provisions requiring the payment Isle of Man. of the fee in respect of the registration of a company) in the same manner as if it had been actually registered in England or Scotland as the case may be [s. 353]. If any foreign company within Part XI of the Act establishes a place of business in both England and Scotland the requisite 318 SECRETARIAL PRACTICE Holding Land. Registration of Charges. Prospectuses. documents and particulars must be filed at the Registration Office in both countries [s. 350(1)]. If any company to which Part XI applies ceases to have a place of business in either England or Scotland, it shall forthwith give notice of the fact to the Registrar of Companies for England or Scotland as the case may be and as from the date on which such notice is given the obligation of the company to file a document with such Registrar will cease I's. 350 (2)]. Companies incorporated in a British possession which have complied with s. 344 and any company registered in Northern Ireland have the same power of holding lands in the United Kingdom [s. 14] as a company incorporated under the Act [s. 345 and Government of Ireland (Companies, Societies etc.) Order 1922, para. 7 (f)]. Other foreign companies are subject to the provisions of the Mortmain Acts. Under ss. go and 91 particulars of certain charges on property in England created, or subsisting on property in England acquired, by a foreign company must be duly registered. The effect of these sections has been considered on PP. 199 ef seq. The provisions summarised above apply only to companies establishing a place of business in Great Britain. There are however several provisions of the Act which apply to all foreign companies whether or not they have established a place of business in Great Britain. Under s. 354 it is illegal to issue, circulate or distribute in Great Britain any prospectus offering for subscription shares or debentures of a foreign company incorporated or to be incorporated outside Great Britain (whether or not such company has or when formed will have a place of business in Great Britain) unless before the issue, circulation or distribution the following conditions have been complied with: — 1. A copy thereof certified by the chairman and two other directors of the company as having been approved by a resolution of the managing body of the company has been delivered to the Registrar for registration. The prospectus states on the face of it that the copy has been so delivered. 3. The prospectus is dated. 4. The prospectus otherwise conforms with Part XII of the Act. The first three conditions speak for themselves. To comply with the fourth condition the prospectus must contain the 2. FOREIGN COMPANIES 319 particulars and matters specified in sub-s. (1) of s. 355. The effect of this sub-section is substantially that the prospectus must contain all the information and statements which would be required in the case of the prospectus of an English company except the contents of the memorandum of association and in addition must contain the particulars specified in par. (a) of s. 355 (1). By analogy with s. 35 (5) it is provided by s. 354 (2) that the section shall not apply to the issue of a prospectus to existing members or debenture holders of the company; nor does it apply to an offer of shares or debentures for subscription to any person whose ordinary business or part of whose ordinary business it is to buy or sell shares or debentures, whether as principal or agent, for s. 354 (4) provides that such an offer shall not be deemed an offer to the public for the purpose of s. 354. By analogy with s. 35 (2) it is provided by s. 354 (x) that it is illegal to issue to any person in Great Britain a form of application for shares in or debentures of a foreign company or intended foreign company unless the form is issued with a prospectus which complies with Part XII of the Act. As in the case of an English company, this provision does not apply where the form of application is issued to existing members or debenture holders of the company or in connection with a bond fide invitation to a person to enter into an underwriting agreement with respect to the shares or debentures. In the case of an English company there is a further exception where the form of application is issued in relation to shares or debentures which are not offered to the public. This exception does not apply to foreign companies and accordingly in the case of foreign companies it is illegal to issue an application form for the purpose of getting capital privately subscribed unless it is accompanied by a prospectus. The provisions of s. 37 as to the liability of directors for statements contained in the prospectus is extended to prospectuses of foreign companies by s. 354 (5). Moreover any person knowingly responsible for contravention of the section, whether as regards the issue, circulation or distribution of a prospectus or the issue of an application form, is lial to a fine of £500 [s. 354 (6)]. By sub-s. (3) of s. 354 the provisions of s. 38 of the Act as to Shares for offers for sale where the shares or debentures have been allotted Sale. with a view to their being offered for sale to the public are extended to the like offers for sale of shares or debentures of a foreign company. (As to s. 38 see p. 58.) 320 SECRETARIAL PRACTICE S. 38 only applies where the original allotment or agreement to allot was made with a view to an offer for sale and does not apply where shares offered were not allotted or agreed to be allotted with a view to an offer for sale to the public. Offers for sale which are outside s. 38 are however, it is believed, covered by s. 356 under which house-to-house canvassing is prohibited and the making of an offer in writing to any member of the public (not being a person whose ordinary business or part of whose ordinary business it is to buy or sell shares, whether as principal or agent) of any shares or debentures is except in certain specified cases illegal unless the offer is accompanied either by such a statement in writing as is mentioned in the section or by a prospectus complying with Part XII of the Act. The effect of this section is considered on p. 59. Moreover apart from s. 350 it would appear that offers for sale of shares or debentures not originally allotted or agreed to be allotted with a view to such offer must, if an application form is sent with the offer, be issued with a prospectus complying with Part XII of the Act. (See s. 354 (1) (b) and observations on s. 35 (3) at p. 59 supra.) i Winding Up. Having regard to the definition of an unregistered company in s. 337 any foreign company can be wound up by the Court unless it was incorporated in Northern Ireland and had its principal place of business there and did not have a principal place of business in either England or Scotland [see ss. 337 and 338 (1)]. Moreover, under s. 338 (2), every foreign company which has been carrying on business in Great Britain but ceases to do so may be wound up as an unregistered company, notwithstanding that it has been dissolved or otherwise ceased to exist as a company under or by virture of the laws of the country under which it was incorporated. CHAPTER XXVI INCOME TAX IN ITS APPLICATION TO TRADING COMPANIES Tue law, administration, and practice of the Income Tax Acts are, despite the valuable Consolidation Act of 1918, of so extensive and complicated a character that it is only possible within the limits of this chapter to treat of a few of the general principles involved, the knowledge of which is absolutely essential to a secretary of a Joint Stock Company engaged in trading, in order that he may be enabled to draw up the necessary returns and put forward such claims for relief as either the Acts, the practice of Commissioners in their discretion, or recent decisions in the Courts, afford him the opportunity of pursuing. Accordingly this chapter deals with Income Tax Assessments under the following heads: (1) How profits and salaries are returnable for assessment; (2) The chief points upon which difficulties may arise in computing liability; The question of deduction of income tax from dividend. etc. While the statement on Form I. or IA. (corresponding to Procedure. the old Form 11 or 11a) is the return for assessment of profits under Schedule D required by statute, the real work in connection with the liability is done by correspondence and interviews with H.M. Inspectors upon the annual accounts, sometimes conducted by the company’s auditors, or by their own chief accountant, but also frequently by the secretary, according to the organisation of the company and the complexity of the matters involved. It is now almost the invariable practice for the annual report, profit and loss account and balance sheet to be submitted for this purpose, and the inspector's name and address should be carefully noted on the list of those to whom such accounts are sent, in order that they may reach him automatically, and save both sides the trouble of special applications. They should be accompanied or followed by statements showing how the amount proposed to be ‘returned’ as the liability is computed, and by any subsidiary accounts or statements which have been found necessary in past experience. In the alternative (3) Period of Accounts. Computation of Income Tax Profit. 322 SECRETARIAL PRACTICE the inspector, on receipt of the accounts, will send in a number of ‘queries’ and fuither requirements, and when these have been satisfactorily replied to he may forward a computation of liability and ask whether the company is in agreement. On agreement the secretary will be in a position to complete the formal return when Form I. or Form IA. is received. It is not much use completing this form until the figures are actually agreed, except in the case where the computation is being contested on appeal, when the liability as desired by the company should be shown on this form. The Revenue looks to the completion of this statutory return as the formal act of responsibility by the company, notwithstanding all the anterior or auxiliary correspondence that may have taken place. For computing liability in established businesses for any financial year beginning on the 6th April, the last completed accounts prior to that date (e.g. 31st March or 31st December) are taken. Until the year 1927-28, it was necessary to take sufficient earlier accounts to make up in all three years (except for mines where a five years’ basis, and railways, and other specified concerns where one year, was adopted). The liability was the average for one year of the adjusted profits of the whole period. By the Finance Act, 1926, mines were transferred to Schedule D and the liability under Schedule D was to be assessed on the profits or gains, or income of the year preceding the year of assessment instead of on the average for one year of the adjusted profits of the three years’ period. These provisions first became operative for the year 1927-28. If the business was commenced in the year preceding the year of assessment, the profits of one year from the commencement thereof are taken, and if it is commenced within the year of assessment a computation is made either on the full amount of the profits arising in that year or according to an average of such a period not being greater than one year as the case may require and the Commissioners direct. In computing liability it is convenient to commence with the net profit carried into the balance sheet, and to go through the expenditure and add back all sums not allowable, and then make deductions for items allowable but not already charged in the accounts in getting at the net profit adopted as the starting point. ADDITIONS TO TRADING PROFIT (1) All book-keeping ‘rents’ for premises occupied for the business and owned by the company, all ground rent, lease rents and other charges issuing out of such property. INCOME TAX 323 [The deductions include a special allowance, which is generally to the greater advantage of the company—uide Deductions (1).] (2) Rates, repairs and insurance of properties in the United Kingdom let to tenants of the company. (3) All royalties on patents, mortgage, debenture and other annual interest and annuities charged. The company has the right of deduction of tax therefrom, and in having this included in its liability is acting, so to speak, as the agent of the revenue. (But special considerations arise on Interest Accounts dealt with later on.) (4) All reserves for leasehold redemption, debenture redemption, preliminary expenses, and anything of the nature of the gradual amortisation of capital. (5) Provision for wear and tear of plant, etc. (specially dealt with as a deduction from the assessment itself, see below). Renewals of plant and machinery and capital assets (see Depreciation or Wear and Tear Allowance). (6) Income tax charged as an expense in the accounts. (7) All sums employed as capital, or capital withdrawn or lost. (8) Any sums expended in improvements of premises or written off as depreciation of land, buildings, or leases. (9) Any losses not connected with, or arising out of, the trade. These are discussed at greater length below. DEDUCTIONS FROM TRADING PROFIT (x) The net Schedule A assessment on all property owned and occupied for the purposes of the business (in lieu of No. 1 above) because duty has already been paid upon this sum. In the case of mills, factories, or similar premises, the deduction allowed is the gross and not the net assessment —so that the company gets, in addition to any actual repairs charged in the accounts, the one-sixth of the Schedule A (upon which no duty has been paid) to allow for depreciation and obsolescence. In the case of premises abroad no duty has been paid under Schedule A, and so no deduction is allowable for a Schedule A assessment, but for mills, factories, etc., a sum is deductible equivalent to one-sixth of the annual value arrived at as though a Schedule A assessment could be or had been made. (2) In the case of obsolete machinery which is disposed of and other machinery acquired in its place, a deduction may be made from the profits of the vear in which the replacement 324 SECRETARIAL PRACTICE is made, for the depreciation not yet allowed, 7.e. the difference between the written-down value and what is realised as the scrap value. In this way, by the time a given machine 1s disposed of, the whole of the capital invested in it will have been allowed for against profits. This allowance for obsolete machinery is not however to exceed the cost of the new machinery, less the scrap value of theold. (Special conditions relate to wear and tear of plant rented, to plant on hirepurchase agreements, to ships, etc., details of which would be out of place in a general work, but which can be found in technical taxation manuals.) (3) Interest received which has been subjected to United Kingdom income tax, including mortgage and debenture interest, and all dividends. The amount to be deducted is either the gross or the net sum, whichever has been brought to credit of the account. If the gross sum has been brought in as a receipt, and the tax thereon charged as an expense, the disallowance of both will give the same effect. Bank deposit interest and other untaxed interest are often deducted also, and separately charged under Case III. of Schedule D, but it is not uncommon to let them remain in the general liability of the business. If there is a general interest account it will require scrutiny. Theoretically, the balance of the account should be brought into the computation, to be deducted from profit if the receipts are greater than the payments of interest in the year, and vice versa if they are less. This assumes that all the interest is annual, and consequently paid or received under deduction of tax. As the account commonly consists in the main of non-annual interest (e.g. trade interest, interest to or from bankers, or on bills), which is paid in full, and is therefore assessable on the recipient, it is necessary to analyse the interest account to ascertain the true liability or claim to relief. The well-known case of Goslings and Sharpe v. Blake [ (1880), 23 Q.B.D. 324] sought to define ‘annual interest.’ In general it may be said that interest at varying rates and for periods less than a year is to be returned for tax by the banker, broker, or other lender, and not by the company, and that if evidence be produced to the inspector in support of the claim, allowance will generally be made. It follows that if any interest upon trade accounts, foreign investments, &c., has been received without deduction of United Kingdom tax, such part of the revenue must not be deducted in computing the assessable profits. (4) Depreciation or wear and tear allowance is not taken off the profits, but is an allowance from the assessment. It represents the diminished value during the vear of INCOME TAX 325 assessment itself; but the usual practice is to take the value of the machinery and plant as existing at the last balance sheet, and to calculate the allowance at the rate agreed for a year, as equivalent to the allowance for the exact year of assessment, without generally speaking, any addition or deduction for plant acquired or given up during the year of assessment. With most companies allowances are computed on the ‘written down’ value of the asset, all pure renewals, as distinct from repairs, being added to the capital value and not charged against revenue. If the assessment in a given year is not large enough to cover the whole allowance due, the balance can be carried forward into a future year. As a general rule, if renewals are allowed to be charged against revenue (vide 5 above), no wear and tear allowances are given in respect of that class of plant. There remain some further matters likely to cause dis cussion :— I. Profit on Realisation of Assets. Profits of a capital Other nature need not be brought into the liability, just as, in the Adjustments. same way, expenses of a capital nature are not allowed as an expense, but in the case of a company with wide articles of association there may be some difficulty in establishing that particular profits are of a capital nature, although as regards an occasional realisation of investments for an ordinary trading company the claim would be admitted without question. 2. Charities and Donations. While a large amount of money is often given in charity by the directors of a limited liability company (especially where the capital or, in particular, the ordinary shares are held privately) which it must be admitted is not a proper charge against the business, there are other donations and subscriptions to which the same considerations do not apply, as for example, subscriptions to a charity or hospital, to which the company’s employees are admitted if in ill-health. As a general rule any expenses which benefit the workpeople and may be regarded as a general addition to wages are allowed. 3. Trade subscriptions. Subscriptions to trade associations are now admitted if associations have entered into an arrangement to pay tax direct on any excess of their receipts over their admissible expenses. The net effect of this arrangement is that tax on that part of the subscriptions which represent expenditure not admissible is collected in one sum from each association instead of from the individual members. 4. Law Charges incurred otherwise than in the collection 326 SECRETARIAL PRACTICE of trade debts, are frequently challenged, and where they are actually incurred for the purpose of acquiring assets they are not allowed. The expense of issuing debentures is not allowable [Texas Land and Mortgage Co. v. Holtham (1894), 10, T.L.R. 337], and a bonus payable on a repayment of borrowed money is also not allowed [Arizona Copper Co. v. Smiles (1891), 29 Sc. L.R. 134]. Legal expenses incurred in defence of existing rights are admitted. 5. Losses on Closing Factories and removal expenses are not allowable according to High Court decisions, but as a matter of practice, where removal expenses are compulsory, no objection is usually raised to the cost of removal. In any case the expenses of removing trading stock are allowed. 6. Bad Debts in respect of cash advances which have not been made for trade purposes, are not allowed. It is obvious that the question of what are ‘trade purposes’ must be decided in each case. v7. Exhaustion of Nitrate Grounds. The exhaustion of natural assets like nitrate deposits. mineral seams and so on, is not recognised. 8. Foreign taxation is allowable as a deduction. In view, however, of the provisions for allowance of relief in respect of Dominion Income Tax, such taxes must be added back wholly or in part according as the law of the Dominion provides for reciprocal relief, see Finance Act, 1920, s. 27 (4). 9. Sums allocated to reserve funds generally are not allowed, whatever the object may be, for they are considered simply as an appropriation of profits. Generally speaking, the contingency provided against will be allowed as and when it arises if it comes within the provisions of the Acts. For example, amounts set to a bad debt reserve would not be allowed, but the actual sums charged to that account during the year would be allowed instead. There is a provision for allowing an estimate for specific doubtful debts, but in practice this is frequently not claimed. In the long run it makes no difference, as debts are fully allowed to the extent to which they become bad. Relief in 10. Relief from United Kingdom income tax can be claimed Respens of in respect of Dominion income tax. This relief was first Income Tax. granted under the provisions of s. 43 of the Finance Act, 1916. The whole position was, however, reviewed by the Royal Commission on the Income Tax; and, following a recommendation in the Commission’s Report, the Finance Act of 1920 [s. 27] made new and more complete provisions. INCOME TAX LT The Dominion rate of tax in respect of which relief is granted is, according to the Act, that paid for the Dominion Income Tax year corresponding with the British year in which the income is taxed. The rate of relief allowable is not a fixed rate, but is determined under the Act as follows: — (a) if the Dominion rate of tax does not exceed one-half of the appropriate rate of United Kingdom tax, as defined by part II (2) of the 5th schedule to Finance Act, 1927, the rate at which relief is to be given shall be the Dominion rate of tax. in any other case the rate at which relief is to be given shall be one-half of the appropriate rate of United Kingdom tax. In the case of a company chargeable to United Kingdom income tax on the whole of its profits, relief, calculated by reference to the standard rate of United Kingdom income tax, is allowable to the company in connexion with its schedule D assessment. The rate of United Kingdom income tax deductible from dividends by a company obtaining relief is the rate as reduced by the relief granted to the company. This applies equally to dividends on preference shares and ordinary shares (Sheldrick v. South African Breweries (1923), 1 K.B. 173; see also Gold Fields, etc., Co., v. Consolidated Gold Fields, etc., Ltd. (1926), 1 Ch. 338). In the case of tax-free dividends of British Companies the ‘gross’ amount of the dividend is arrived at by writing up the dividend by reference to the reduced rate of United Kingdom income tax applicable only. In the case of a company not chargeable to United Kingdom income tax on the whole of its profits, shareholders should in strictness claim relief by way of repayment; but, where such companies have paying agents in this country, the relief is usually granted to shareholders by deduction of United Kingdom income tax from their dividends at a rate less than the standard rate. In order to make this procedure possible, the Inspector of Foreign Dividends, York House, Kingsway, London, W.C.2, on application by the paying agent, authorises a rate of relief based on the full standard rate of United Kingdom income tax and issues a specimen form of counterfoil containing an explanatory memorandum. Where a company obtaining relief has paid Dominion income tax at a rate in excess of half the standard rate of United Kingdom income tax, and is not entitled to repayment under the 328 Dominion laws in respect of that excess, any shareholder whose ‘appropriate rate’ exceeds the standard rate of United Kingdom income tax may claim further relief, but on the other hand if the shareholder’s ‘appropriate rate’ is less than the standard rate, then he has received excessive relief and inspectors of taxes are acting within their powers in making the necessary adjustments in individual cases. In order to obtain authority for the deduction of United Kingdom income tax at a reduced rate from dividends it is necessary, before payment, to furnish the Revenue Authorities with full particulars regarding the Dominion income tax paid by the company and to produce Dominion revenue receipts as evidence of the payment of such taxes, together with a detailed statement reconciling the amount of the assessment with the figures in the printed accounts. The following is suggested as a suitable form in which to furnish the necessary particulars: — I. Amount of profits assessed. 2. Deductions allowed therefrom. Taxable amount actually charged. Date of end of Dominion year for which taxes charged Rate of Duty. Amount of duty charged. Details of Income exempted from Dominion taxation. Details of Income subjected to Dominion income tax before receipt. Evidence of payment. As it is often found impossible in practice for the revenue authorities to be furnished with particulars of the Dominion taxation in respect of the Dominion year corresponding to the British income tax year of assessment in time to pass on the relief to shareholders by means of a reduced deduction of United Kingdom income tax, the Board of Inland Revenue are usually willing to grant relief on the basis of the Dominion income tax paid for the year preceding the British income tax year of assessment. In the case of Foreign and Colonial Companies United Kingdom income tax is chargeable on the ‘gross’ amount of the dividend, .e. the declared amount of the dividend written up by an amount of Dominion income tax equal to the amount of relief granted, unless the Dominion concerned grants complementary relief from Dominion income tax in respect of the payment of United Kingdom income tax when the dividend is written up by reference to the full rate of the Dominion income tax, SECRETARIAL PRACTICE A. INCOME TAX 329 When adjustments are made in respect of relief granted to shareholders of Dominion companies by means of a reduced deduction of United Kingdom tax, the gross dividends are recalculated by reference to the actual rate of relief applicable to the shareholders’ dividends in question, and United Kingdom tax is charged at the correct rate on the new ‘gross.’ The British Revenue Authorities take the view that in the case of preference shareholders of a Dominion company, if the preference shares are entitled to a dividend at a fixed rate without further participation in profits and the dividends are paid at the full fixed rate without deduction of Dominion income tax, no relief is allowable in respect of any Dominion income tax paid by the company. Shareholders frequently ask officials of companies to explain the basis on which relief is granted, and they are especially puzzled when an Inspector of Taxes sets off against an amount of tax repayable an item termed ‘ Dominion relief over-allowed. Seeing that the individual's ‘appropriate rate’ of United Kingdom tax is the factor which in most cases determines the rate of relief allowable, the two following examples will serve to illustrate the manner in which this rate is arrived at: — Taxable Income. £33 [A ~ - p i -~ pe 7.8 % 5 Uw 426 4. (Appropriate rate say 3s. 7a.) B 1000 Taxable Incom £225 2000 5400d. 960004. I0I400d. Rate of Income Tax ( For the preceling vear ¢* to £87 10s. =.' + 7 Tax rate is th The appre, and 7d. Sur ] Sa == 45'57d. ) 3s. 10d. Assessment Sur Tax amounting « income of f3000. The Sur ar, Pram ~d. (3s. 10d. Income Tax 330 SECRETARIAL PRACTICE United King- Under agreement made between the British Government and dom Income the Government of the Irish Free State in respect of double pox and Jrish income tax (see s. 23 of Finance Act, 1926 and s. 21 of Finance Income Taz. Act, 1928), a person resident in the Irish Free State and not resident in Great Gritain or Northern Ireland is entitled to exemption from United Kingdom income tax in respect of income arising in Great Britain or Northern Ireland and a person resident in Great Britain or Northern Ireland, and not resident in the Irish Free State is entitled to exemption from Irish Free State income tax in respect of income arising in the Irish Free State. Special provision is made in the agreement for relief in cases of persons resident both in Great Britain or Northern Ireland and in the Irish Free State. Appeals. Reliefs. Salaries. Under Clause 4 of the agreement a company is deemed to be resident in the country in which its business is managed and controlled. If a liability has not been agreed with the inspector and a return has been made in accordance with the company’s views, it will generally be found that an assessment will be made on the larger figure in accordance with the inspector’s contention. Upon receipt of the Notice of Charge or notice of assessment the secretary should give in writing the necessary notice of appeal, stating the grounds of appeal quite generally, and whether the appeal is to the General or Special Commissioners. It is desirable to register this communication, which should be made within 21 days. As it has been assumed that all necessary documents are already before the Revenue nothing further remains to be done until the case is brought before the Commissioners. Where a business ceases, the liability for the broken period at the end is reduced to the actual profits for that period, less any debts [s. 31 of Finance Act, 1926], and provision is also made for repayment of any tax overpaid or the raising of an additional assessment as the case may require. Under Schedule E, the secretary has an important function to discharge—making a statutory return of salaries on the prescribed form [No. 46 or 46 (a)]. It should be noted that this Return should include the directors, all the staff whose whole-time remuneration brings them over the limit of liability, and also pensioners and any who receive fees of any kind, whatever the amount, for part-time work; as distinct from payment for specific tasks, e.g. solicitors’ and architects’ fees. Round sums paid annually for expenses, bonuses. etc.. should be specified. INCOME TAZ 331 The form of return (No. 46 or 46a) requires the amount of salary, &c., for the year of assessment and the amount of commission and other variable emoluments for the previous year to be stated. The statutory basis of liability is the amount of the total remuneration for the year of assessment, but it is a common and convenient practice to assess on the basis of the fixed salary of the year plus the variable emoluments of the preceding year. So far as concerns cases where income tax is paid by the company, the amount so paid is regarded as additional income and assessable to tax. The total sum to be charged is, therefore, a little difficult to calculate; the exact mathematical course is not followed, but in practice the following 1s approved: For the first year the assessment is upon a salary plus the tax thereon; for the second year, upon the salary plus the tax on the assessment of the previous year, and so on. So that for some years the taxpayer has a slight advantage, and where the salary is an increasing one this advantage is more marked. Generally speaking, the tax paid by the employer is the duty charged on the remuneration after allowance of any abatements or relief granted to the employee, and is not calculated at full rate on the salary paid. Such income tax paid on salaries and assessed under Schedule E should be claimed as a deduction under Schedule D, and does not come within the general rule as to disallowance of income tax. In completing the return under Schedule E it is well to compare the details with those sent in in the previous year, and wherever remuneration has increased, to give a note showing the rate of change, e.g. £300 to £350, and the date from which it operates. Similarly, in the case of new names for employees who were engaged during the preceding year, and since the former return was made, it is convenient to give the date of engagement and rate of salary, and, if possible, the address of previous employment from which the employee came. In the case of those who have disappeared from the list, the date when they went, and, if possible, where they have gone, should be entered. This may seem to involve a great deal of work that is not actually called for, but it will be generally found that it is less trouble to do it while the main question is under consideration, and that a good deal of miscellaneous correspondence between the Revenue and the secretary at odd 332 SECRETARIAL PRACTICE times during the year will be saved. The secretary should take care to see that the return is comprehensive, as the responsibility is upon him, and bonuses, overtime and fixed all-round figure payments for expenses should be included. In the ordinary course dividends are payable ‘out of profits or gains brought into charge,’ and in this case prior to 1927-28, the rate of tax deductible was the average rate in force over the period in respect of which the dividend was paid, but under s. 39 of Finance Act, 1927, the tax to be deducted is the standard rate for the year in which the amount payable becomes due. Where arrears of preference dividend are paid for previous years (prior to 1927-28), the rate of deduction is the average in force over the period during which the profits were made out of which the dividend is paid. Where payments of debenture interest are made that cannot be said to be out of profits or gains brought into charge, owing for instance, to a series of trading losses, and such interest is separately assessed [under Rule 21 (2) of the General Rules applicable to all Schedules, Income Tax Act, 1918], then the tax deducted should be at the rate in force at the time of payment. Explanation ~~ Every company within the meaning of the Companies of Tax Act, 192g—which means a company formed and registered Deduction to to ye be annexed under that Act or an ‘existing company (¢.e. formed and to Warrants. registered under the Joint Stock Companies Acts, the Companies Act, 1862 or the Companies (Consolidation) Act, 1908) —or a company constituted by letters patent or by or in pursuance of an Act of Parliament is required under s. 33 of the Finance Act, 1924, whenever it issues a ‘warrant or cheque or other order drawn or made, or purporting to be drawn or made after 30th November, 1924, in payment of any dividend or interest’ to annex thereto or to accompany it by a statement in writing showing the gross amount which, after deduction of the income tax appropriate thereto, corresponds to the net amount actually paid; and the rate and the amount of income tax appropriate to such gross amount; and (c) the net amount actually paid. Failure to comply makes the company liable to a penalty of £10 for each offence, but the aggregate amount of penalties under any one distribution of dividends or interest will not exceed £100. Deduction ol Tax from Dividends. CHAPTER XXVII AGENDA AND MINUTES ONE of the principal parts of a secretary’s duties is the preparation of agenda for board meetings, the attendance at such meetings, and the drafting of the minutes to record the decisions arrived at. [n the case of a company the necessity for keeping minutes is imposed by s. 120 of the Companies Act, 1929, which provides that every company shall cause minutes of all proceedings of general meetings and of its directors or managers to be entered in books kept for that purpose. The same section provides that minutes, when signed by the chairman of the meeting at which they were passed, or by the chairman of the next succeeding meeting, shall be evidence of the proceedings. The reading of the minutes of one meeting at the next meeting, when they are commonly signed, is not infrequently a matter which degenerates into a mere formality; and, accordingly, very great care should be taken to write them both accurately and with sufficient fulness. It is often found in legal proceedings that a company’s minute book contains no record of matters which individual directors know have occurred, and the difficulties of satisfying a Court in these circumstances sometimes prove insuperable. What the secretary is really doing when he prepares the minutes 1s to make a permanent record of the transactions of the board, or of the company, which may very possibly, in the future, be absolutely the only evidence of those transactions which it is possible to produce. It is quite impossible to forecast what will or what will not be required in future contingencies, and the only safe plan is to make the record both accurate and complete. In case, upon the reading of the minutes of one meeting at the succeeding meeting, inaccuracies are noticed and alterations made, the chairman upon signing the minutes should initial all the alterations. But no alterations should be made in the minutes except in these circumstances, and then only such alterations as are necessary to ensure an Minutes. Agenda Paper. 334 SECRETARIAL PRACTICE accurate record of the proceedings. Except as just mentioned, a secretary should never, whether acting under the express instructions of a director or directors, or on his own initiative, alter minutes of meetings, either by striking out anything or adding anything [Cawley & Co. (188g), 42 Ch. D., at p. 226]. Formerly it was customary to keep an agenda book, but that course has disadvantages, and it is preferable to have the agenda prepared on separate sheets of paper, with the various items for consideration appearing on the lefthand side, leaving a large right-hand margin upon which the chairman may write any notes he desires of the decisions arrived at. It is the secretary’s duty to prepare the agenda paper, and he will keep a file in which he will put all letters and other documents coming into his possession between meetings which require the attention of the board. In preparing an agenda the secretary should read through the minutes of the last meeting to see whether any matters which were then discussed were ordered to stand over until the next meeting. He should also read through the agenda paper of the last meeting to see whether any matter was mentioned thereon, but was not incorporated in the minutes. The order of business is often prescribed by rules, but in all cases (unless it is necessary to elect a chairman of the meeting) the first item on the agenda should be to read and sign the minutes of the previous meeting. It will generally be found advisable at a board meeting of a company to consider the cash position next subject to any prescribed order. The company’s cash book or a statement of the cash position should be produced together with the pass book, and a certificate should be obtained from the bankers, made up to the close of business on the preceding day, showing the balance on deposit and current accounts. Continuing with the board meeting example, the routine business, such as the passing of share transfers (unless authority to pass transfers has been delegated to a Committee), the consideration of departmental reports and other matters which are not likely to give rise to much discussion, should be taken a as a rule at the commencement of the proceedings. It is sometimes found expedient, with a view to saving time, to circulate the agenda paper among the directors a day or two before the meeting, with explanatory memoranda by the secretary on any matters which are not self-explanatory, together with copies of any important letters which require consideration. If any of the matters to be considered are of a AGENDA AND MINUTES 335 specially confidential nature, the authority of the chairman should be obtained before the agenda is circulated. In the case of municipal authorities and other public bodies the minutes are usually circulated among the members prior to the meeting, and are not therefore read at the following meeting. In the case of board meetings, the secretary should, on reading the minutes of the preceding meeting, hand the chairman the agenda of the preceding meeting, so that the latter may check the minutes as they are read by the secretary with his own notes on the agenda, and immediately the chairman has signed the minutes as a correct record, the agenda paper should be torn up. The objection to keeping it is that there then exist two records of the same transaction, one, the rough notes often made hurriedly and not always with exactness by the chairman on the agenda paper; and secondly, the more careful minutes written out in detail by the secretary and signed by the chairman with the approval of his colleagues. It is advisable only to have one record, and that record should, of course, be the minute signed by the chairman in the minute book. Assuming the minutes are correctly recorded by the secretary, the minute should read: ‘ The minutes of the board meeting held on the day of last were read and signed by the chairman.” The use of the word ‘confirmed’ should be avoided, as that may imply that the resolutions are not complete without ‘confirmation,’ whereas the resolution is binding directly it is passed, and the secretary or other official is justified in acting upon any resolution directly it is agreed to. The only reason for reading the minutes of the preceding meeting is to give all the directors an opportunity of seeing that the secretary has correctly recorded their proceedings. If it be found on reading the minutes that any alteration is required, such alteration should be made, not by erasure, but by striking out in ink the incorrect words, and writing in the correct ones, and the alteration should be initialled by the chairman. No alteration in a decision arrived at can be allowed on the reading of the minutes, the only permissible revisions being those which affect the correctness of the record of those decisions. Where the decision of a board meeting is not unanimous it is not usual to record the fact that the decision is only that of a majority; but if on the point being put to him by the secretary, the dissentient director or directors desire such dissent to be recorded, there is no objection to stating, after Minutes Read and signed. Minuting Dissent. 336 SECRETARIAL PRACTICE Specimen Minutes. Secretary to take Notes. recording the resolution: ‘Mr. A. B. and Mr. C. D. voting against the resolution,” or ‘Mr. A. B. and Mr. C. D. dissenting.’ If it be found on reading the minutes of a previous meeting that the dissent of a director who voted against a resolution has not been recorded, and such director desires his dissent to be inserted in the minutes, the words can be added, and the addition initialled by the chairman when signing the minutes. If the director did not actually vote against the resolution, but has, on reconsideration, decided against a particular resolution passed by the board, the minutes should not be altered, as they have been correctly recorded. The minutes recording the examination of the cash position should read as follows: —'Bank pass book and certificate were produced showing the following balances: — On Deposit Account £ On Current Account £ The latter was agreed with the cash book. Share transfers (where they form the subject of a resolution) should be referred to in the minutes by their consecutive numbers and the minute should be to the effect that: IT was RESOLVED that transfers Nos. 1 to 20 inclusive be passed and the common seal affixed to the necessary new certificates Nos. to inclusive. In large companies, committees are sometimes appointed by the board with power between board meetings to pass and sign cheques and to pass transfers. Their proceedings should be summarised in a report, or their minutes read and embodied in the minutes of each board meeting as reports ‘received and adopted.’ It is the secretary’s duty to take the official notes of the proceedings, and he should not therefore rely upon the chairman’s notes on the agenda paper. The secretary should take full and careful notes of all decisions arrived at, and it is wise to obtain the wording of any important resolution made out in the handwriting of the proposer, and, in any event, it should be initialled by the chairman unless it is in his handwriting on the agenda. In writing up his minutes, the secretary must take great care to see that the record is both accurate and complete. While brevity is desirable, care must be taken to see that the exact intention of the board is accurately and explicitly expressed. It is very inadvisable to give reasons in a minute for any resolution passed by the board. It is true that in the case of Cawley & Co. [(1889), 42 Ch. D., at page 226], Lord Esher said: . "Minutes of board meetings are kept in order AGENDA AND MINUTES 337 that the shareholders may know exactly what their directors have been doing, why it was done, and when it was done.’ Notwithstanding this expression of high legal opinion, it will be found in practice inadvisable to explain in the minute book why any particular resolution is passed. Indeed, this is sometimes impossible, as the reason for a particular decision which may operate in the mind of any one member may be quite different from that which influences his colleagues. Moreover, it is unusual and undesirable in the case of company board meetings for the minute book to be accessible to shareholders generally, and there appears to be no authority for the suggestion that they have a right of access to the directors’ minute book, and no secretary would be safe in assuming that shareholders have such a right. They have of course a statutory right of inspecting minutes of general meetings of the company, and on payment to a copy of such minutes and the book containing such minutes must be kept at the registered office of the company [s. 121]. An occasion might arise when refusal to inspect board minutes might be justified—without express instructions from the chairman—in the case of a director himself, if it appeared evident that he wished to utilise his privileged position for a purpose detrimental to the company and the board. A difficulty of this kind was the subject of judicial decision in R. v. Hampstead Borough Council, ex p. Woodward (The Secretary, 1917, p. 68), where the principle was affirmed that whilst a member of a public body acting solely in the public interest has a right to inspect the documents of that body, yet if the inspection is sought for any other purpose, and the interest of the public is not his sole aim, he is deprived of his primd facie right, and will not be permitted to utilise his privilege for personal or other ulterior objects. With regard to the minutes of general meetings of shareholders of public companies, these usually follow certain stereotyped lines. The first resolution submitted at the annual general meeting of shareholders is for the adoption of the report and accounts, and generally takes the following form:— That the directors’ report and statement of accounts as at General the 31st December last, and now submitted t~ this Meetings. meeting, be and the same are hereby received and adopted. Before, however, recording this resolution the record of the proceedings will state that the notice convening the meeting was read (or was taken as re> ), and that the auditor’s report was read to the meeting 's 71° Inspection of Minute Books. 338 SECRETARIAL PRACTICE If the report recommends the payment of a dividend, a second resolution may be submitted to the following effect, or these words may be added at the end of the first resolution, namely: —'That a dividend of per cent. for the year ended 31st December last be and the same is hereby declared on all the issued shares of the company payable less income tax to the shareholders appearing on the register as on the day of (the date on which the share register was closed). The wording must of course be altered to suit the circumstances, e.g. if there are two or more classes of shares the resolution must state exactly on which class of shares the dividend is payable. If an interim dividend has been paid it is desirable to add after the words ‘dividend of per cent.” words in brackets to the following effect ‘(making with the interim dividend declared on the last, a dividend of per cent.).’ The next resolution usually submitted is the resolution for the re-election of the retiring directors, and should be in the following words: — That Mr. ‘A. B.’ the director retiring by rotation, be and he is hereby re-elected a director of the company. The resolution appointing the auditors is usually proposed and seconded by some shareholder other than a director. While this is usual and desirable, it is by no means necessary, and it is quite competent for the resolution to be proposed and seconded by directors or other officials. The resolution should be in the following form: — That Messrs. ‘A. B. & Co.,’ chartered (or incorporated) accountants, be and they are hereby appointed auditors of the company for the ensuing year, at a remuneration of £ S. 132 of the Companies Act, 1929, provides that every company shall at each annual general meeting appoint an auditor, and sub-s. (6) of that section provides that the remuneration of the auditors shall be fixed by the company in general meeting. Presumably, however, it is in the power of the shareholders to delegate their functions to the directors if they so desire, and in the case of new companies it is not unusual for the shareholders to appoint the auditors, but instead of fixing their remuneration, to add at the end of the resolution, words to the following effect: ‘At a remuneration to be fixed by the board.’ Amend- - If any amendment is proposed to a resolution, such ments, amendment after being seconded, is put to the meeting before AGENDA AND MINUTES 339 the original resolution is submitted. If the amendment is lost, the chairman will then proceed to put the original resolution. If the amendment is carried, it then takes the place of the original resolution, and, notwithstanding that it has already been voted upon by the meeting, the chairman will again put it in the form of a substantive motion. In minuting a motion to which an amendment is proposed, it is desirable to give the name of the proposer and seconder of the original motion, and care must be taken to set out the exact words of the motion, then to record the name of the proposer and seconder of the amendment with the exact wording of the amendment, and the secretary should be careful to state in his minute the declaration of the chairman upon the voting, first of the amendment, and, if that amendment is carried, also of the substantive motion. If two amendments are proposed to the same motion, the first amendment (after being seconded) should be disposed of before the chairman accepts a second amendment. It is not usual to allow the same person to move more than one amendment to any particular motion. If an amendment is proposed and finds no seconder, it drops, and the chairman passes on to the main motion or other next business without putting the amendment to the meeting. In that case, there will not be minuted any record of the amendment that failed to find a seconder. [t is not necessary to record on the minutes, in the case of a vote taken by show of hands, the exact number voting for or against the resolution, though if the chairman announces those numbers there is no objection to recording them. If the chairman announces a resolution to be ‘carried unanimously,” that fact should be recorded, and where a majority of voters vote in favour of a resolution and a minority remain neutral, it may be recorded that the resolutions was carried nem. con. This expression, which is an abbreviation of the words ‘nemine contradicente,” is in ordinary acceptation, only a method of recording the fact that no one actually voted against the resolution. Strictly speaking, however, the expression ‘nem. con.’ is a parliamentary expression, and according to the Encyclopaedia of the Laws of England (Vol. 9, page 594) the words signify the unanimous consent of the House of Commons to a vote or resolution—a different expression being used to record a similar vote in the House of Lords. (See also article by Sir Ernest Clarke in The Secretary, Jan. 1917) When a resolution has to be carried by a given majority, 340 SECRETARIAL PRACTICE the minutes should record the fact that the chairman declared the resolution carried by the requisite majority. A form of resolution, happily not of frequent occurrence in shareholders’ meetings, is for a shareholder to move ‘the previous question.” This is sometimes done where a discussion upon a particular subject is carried to inordinate length, and the meeting desires to close such discussion. By far the better way, when a shareholder desires that a particular motion shall not be put to the vote, is for such shareholder to move ‘That the meeting do proceed to the next business.” These words convey the exact intention of the motion, and if seconded and carried, have the same effect as the moving of ‘the previous question.” It is customary for a motion of this character to be put to the vote without debate. The minute should read: ‘Mr. A. B. moved and Mr. C. D. seconded, that the meeting do proceed to the next business. This was put to the meeting and declared by the chairman to be carried. The meeting accordingly proceeded to the discussion of the next item on the agenda.’ Or: ‘Mr. A. B. moved and Mr. C. D. seconded, that the meeting do proceed to the next business. This was put to the meeting and declared by the chairman to be lost. The discussion of the subject under consideration was then continued.’ CHAPTER “"XVIIT FILING AN efficient system of filing is essential to the proper working of any office; without it, confusion, delay and needless labour— resulting possibly in financial loss—are caused. On the other hand, nothing is more conducive to expeditious working than a system which is at once comprehensive and simple. It may, indeed, be said that such a system is the keystone in the organisation of an office, and this is a fact which has been fully appreciated in recent years by the makers of office requisites. It does not fall within the scope of this chapter to recommend the productions of individual firms, but rather to suggest the general principles which, as the result of experience, are found to underlie methods of filing correspondence, agreements, title deeds and other documents, have proved satisfactory, and are readily adaptable to the requirements of large or small undertakings. The prospective purchaser will have no difficulty in obtaining the mechanical aids necessary for the completion of his office equipment from the numerous manufacturers of requisites. While, however, a judicious selection of such aids is of importance, it is at least equally important that care be given to the organisation of the staff of the filing office. It should be a primary rule that access to the files can only be gained through the filing clerk or clerks; unlimited access results (in an office of any magnitude) in missing files and documents replaced incorrectly; it is, therefore, essential that the rule be laid down and rigidly enforced that the required file or document is only to be obtained through the proper person, to whose custody it is to be returned without delay. No document should be issued by the filing office without a temporary receipt from the borrower. It is also essential that all new files should only be established in conjunction with the head of the filing office, so that overlapping may be avoided and a carefully arranged system of Iles may be developed and recorded. Filing Staff. 342 SECRETARIAL PRACTICE Central v. In the organisation of a large office, there should be either a Departmen- filing office connected with each department of the undertal Filing. taking, or a central filing office supplying the needs of all departments. Advocates of both methods are to be found: those who prefer the central office point to economy of labour and the advantages of centralisation. It is suggested, however, that the balance of advantage lies with the method first mentioned. It is quite easy, if the departmental filing staff is not fully occupied with the work of filing, to arrange supplementary duties, and so to avoid waste of labour, while the great advantage—since time is so frequently ‘of the essence of the contract’—in having a filing staff identified with each department, lies in the rapidity with which the desired file may be obtained. Centralisation may be theoretically sound but in practice there is much to be said for the departmental method; indeed, it may even be found that in distinct sections of a given department it is desirable to file the papers of such sections apart from those which are in the custody of the filing office. Such exceptions, however, should be well defined, for reasons too apparent to need enumeration. The point to be emphasised is, that methods of organisation should not be so rigidly enforced as to hamper speedy, efficient and simple working. Loose Copies. In many modern offices the press copying of the outwards mail is dispensed with, or, if retained, loose copies (carbon, if typed, or loose press copies, if hand written) of all letters are made in addition to the copies in the letter-book. The loose copy is an integral factor in the filing system, and its existence is assumed throughout this chapter, as no efficiently organised office can work at the speed demanded to-day, if reference has constantly to be made both to a letter-copying book and a file consisting only of inwards letters. In an office which is a head office, or one of a number of branches, two copies of each outwards letter should be made in all relative cases, one for filing on the branch or head office file, and the other for the subject file. A register dealing with inwards and outwards letters and containing, in one entry, the dates of receipt and reply, the correspondent’s name, the subject, and the reference to the file of correspondence, should be kept with unfailing promptitude. Such a register is invaluable for reference, and is needed to supplement the actual filing of correspondence. Each inwards letter should be stamped with the date of receipt, and endorsed with the file number if a numerical system of filing is employed, or caption, in the case of an alphabetical system. Register. FILING 343 It should also be a rule that each outward letter should have the subject to which it relates set out at the head. Each Jetter should only refer to one subject, but exceptions to this rule may be provided for by increasing the number of loose copies in accordance with the number of subjects dealt with in the letter. It will be seen from the preceding remarks that a proper system of referencing is a fundamental factor in any method of filing. Such references, by means of numbering,or alternatively, subject headings, are suggested below; but success, or otherwise, in the work of the filing office, largely depends on the way in which the referencing is carried out. Every subject should be separately indexed, but many, or perhaps most subjects, in a large department require sub-dividing for convenience in the work of the department; and here, more than in any other detail, care must be exercised. If, on the one hand, correspondence is insufficiently sub-divided, it is difficult to trace required correspondence, and time is wasted; while on the other, unnecessary division of any principal subject is wasteful in the use of filing material, and increases the risk of filing in the wrong sub-division. No hard and fast rule can be laid down regarding the question of references; each office has circumstances peculiar to its own business, and elasticity is essential. Briefly, it may be said that a conservative use of sub-divisions will probably be found convenient in working. Where the numerical reference system is employed, every subject of correspondence, as stated in the preceding paragraph, should bear a distinctive number, and every subdivision of the same subject a further number. These may conveniently be an integral number for the main subject and a decimal fraction for each sub-division. The following examples sufficiently indicate the suggested method: — Rates and Taxes .. . .. 6 's Income Tax .. 6-1 In a department or office dealing with the business of several companies, amplification of the system of reference numbers will be needed in order to establish the identity of documents and to guide the filing clerk. This may be done in a simple manner by prefixing a number to the reference suggested in 4 ~ foregoing paragraph, and is indicated as ollowe es re mn a Referencing. Numerical System. Calan Tnyectma+ 344 SECRETARIAL PRACTICE Alphabetical System. The even hundreds are readily remembered, and to them, as a convenient guide to inter-departmental correspondence, may be added tens, thus: — ‘A’ Company Secretary’s Department. . 110 ‘A’ Company Accountant’s » .. 120 ‘B’ Company Secretary's ’ ‘oe 210 ‘C’ Company Manager's ’ .. 330 'D’ Company Legal . 440 This method of numbering (which is easily variable to meet any particular circumstance) has the merit of being comprehensive and not unduly complex, and, used intelligently, should afford a ready indication to the files dealing with the correspondence upon any subject of the business of any company. It may also conveniently comprehend a subject relating to more than one company by the combination of the prefixes. Although the numerical system, with its indispensable adjunct, the index of files, works well in practice, the alphabetical system (which by constituting its own index, dispenses with the necessity of a separate record) has many adherents. It is simple in working, and a card or other index is unnecessary while instead of marking with numbers, which convey nothing in themselves, each letter and document can be marked with its subject reference. This can be done in the majority of cases by underlining one or more words with a coloured pencil. Correspondence which consists of a single letter and its reply can be filed under ‘ Miscellaneous,” ‘A,” ‘B,” ‘C,” etc. If further correspondence develops in such cases, the papers can be removed from the miscellaneous file, and filed alphabetically. At intervals in the filing cabinets, index sheets can, if desired, be inserted with suitable captions, e.g.: MAA—MAL. Mabson, W. A. Madison Avenue Office. Generally, the alphabetical system of filing seems more suitable where correspondence is mainly or entirely with individual customers or clients, as would be the case in a stockbroker’s office. Where correspondence is more varied, and a number of persons or firms may be involved in the same subject it will probably be more convenient to use the numerical method. It has already been stated that with the alphabetical system no index is needed, but it will doubtless be found useful, particularly in the case of large undertakings, to keep a complete list or inventory of files. y) FILING 345 An index of the main subjects and their sub-divisions 1s, of course, an indispensable part of a numerical system. Where the nature of the business permits, and the correspondence is of sufficient magnitude, a printed alphabetical index of files is to be recommended, particularly if a central filing room serving all departments forms a part of the office organisation. In other circumstances, the expense of a printed index would probably not be justified, and in this event, either a manuscript register or a card index register would meet the requirement of the office. If due regard is given to future needs, the card index will be found to give greater elasticity, as the index may easily be kept up-to-date by the addition of cards as required, and the labour of providing a new manuscript index from time to time is avoided. Further, as correspondence becomes obsolete and is destroyed (the question of a ‘time-limit’ for correspondence. is dealt with later) the superfluous cards may be removed from the drawer, thus always rendering the index a ‘live’ one. The difficulty of keeping a manuscript register free from entries which, through lapse of time, have become useless, is obvious. It may be well here to indicate, on broad lines, the equipment required for the filing office. The vertical filing cabinet (of which many patterns abound) large enough to accommodate papers of foolscap size, is undoubtedly the most satisfactory receptacle for general correspondence. The oldfashioned pigeon-hole cupboard harbours dust, and its contents are not accessible with sufficient ease; congestion is a fatal weakness. The vertical cabinet, not built up too high, is free from these faults; the contents of a drawer may be seen at a glance, and the desired papers obtained without delay, while a properly constructed cabinet is virtually dustproof. The card index drawers should be placed with the cabinet. Each main subject of correspondence with its sub-divisions should be kept in flexible cardboard folders, and each division separated by means of a ‘guide,’ i.e. a sheet of stout cardboard bearing the main number or letters in a metal frame. The main reference is thus easily visible, and affords facility in obtaining required files with a minimum of trouble. Where the business of several companies is dealt with in one office the folders should be of different colours, to allow of easy identification, the name of the company being printed or stencilled on the side of the folder so that it appears horizontally to the eye when the drawer is opened. The folder should bear the names and references of all the files which it Index of Files. Equipment. 346 SECRETARIAL PRACTICE contains, and entries should also be made of any transfers of files to other folders. The files should not be fastened to the folder, which should always be kept in the drawer. When a file is removed for use outside the filing office a slip of paper stating to whom it has been handed or the temporary receipt form should be substituted until its return. Each separate file of correspondence should be kept in a stout paper (preferably manila) cover, bearing, as an endorsement, the subject-matter and (if the numerical system be employed) the reference number. The cover should be folded twice, so that the right-hand side may be folded over the contents before the left-hand of the wrapper (bearing the endorsement). The slight extra cost of this form of cover is fully justified by the condition in which papers, thus housed, may be preserved. All the contents should be firmly fastened in the cover by a loose tag so that the contents can be readily opened out for reference. The contents of each drawer should be arranged numerically (or alphabetically, as the case may be) from front to back and a corresponding indication placed on the outside of the drawers. Transfer The filing cabinet must be supplemented by transfer cases, from Current to which files of correspondence will periodically be transferred Piles and f; permanent storage, or for a prescribed time before their estruction. d . estruction. Regarding thelatter, a timelimit (if such be at all practicable), must be fixed to accord with the nature of the undertaking. [n some offices it may not be possible to destroy any correspondence for very many years, or only selected files may be disposed of, and no inflexible rule can well be applied for universal guidance. It may, however, be said with confidence that in the majority of offices, far too many obsolete papers of all kinds are retained, with consequent congestion of valuable and (in many cases) limited space, and ever increasing difficulty in obtaining with ease and rapidity any document or file to which reference is desired. Certainly much correspondence which had merely a passing importance, and papers of a formal character, together with documents containing information in the form of rough drafts (which can consequently be obtained in a final form elsewhere) may be disposed of in a comparatively short space of time. A period of retention of, say, seven years, should perhaps be sufficient in the case of the bulk of the general correspondence of an office, while papers relating to the capital issues of a company, including all documents connected with statutory meetings and stock and share transfer deeds (indeed, most, if not all, FILING 347 of the correspondence and documents pertaining to the work of the Registration Department) should be retained permanently and be housed under such conditions as will ensure their good condition and easy access. Every secretary will have unhappy recollections of the important file which, suddenly required after a lapse of years, cannot be found without prolonged search. It is suggested, as a general rule, that files of correspondence should be removed from the filing cabinet, and placed in transfer cases at least every two years. Each ‘main’ folder (to which reference has already been made) must be endorsed with the number of the transfer case in which the file for the previous two years has been placed, as well as with the number of the case to which the file in question is now being transferred, thus ensuring continuity of reference and affording facilities for obtaining any required file. The transfer case should be large enough to accommodate foolscap size papers with comfort, and a convenient form is that of the box file, opening at the side and front. An endorsement bearing the number, in bold figures, and a brief statement of the contents on the back, will make the transfer case complete. Suitable reference must be made in the correspondence index. The foregoing suggestions apply, as has been indicated, principally to the general correspondence of an office, but there are many other classes of documents which have to be dealt with by the company secretary, and these call for special consideration. (a) AGREEMENTS AND CONTRACTS, ETC. These (in the form of originals) are of great importance, and as such should be preserved with all care. They can best be filed in separate envelopes, long enough to receive a foolscap document folded lengthways, and so endorsed with name, date and subject that these particulars are seen when the cabinet drawer is opened. Such a drawer should be narrow and high,and capable of holding the agreement or contract envelopes in a perpendicular position, whilst on the outside is indicated the name of the company making the agreements or contracts. Opinions differ as to the filing of spare copies of such documents; some secretaries prefer that these be kept apart from the originals. Wherever possible, original documents should be stored in a strong room or fire-proof safe, and it should be insisted that at the close of each day original agreements or contracts which may have been in use in the office are to be returned to the filing clerk for safe custody. Filing of Agreements, Contracts, Title Deeds, ete. 348 SECRETARIAL PRACTICE The alphabetical register in book form is recommended for recording agreements, as affording a more permanent index than the card system. A book of this kind is never out of date, and provides under each letter, and in order of time, an entire survey of the agreements which have been entered into. Sufficient information will be given by a register with the following headings: No., Date of Agreement, Parties, Subject, Remarks. (6) TitLE DEEDS. Documents relating to the sale and puchase, etc., of property, or, more exactly, the deeds which embody such transactions, never become obsolete, and must be dealt with accordingly. They should always be stored in the strong room (if such be provided), or in a fireproof safe. An excellent practice is to file each parcel of deeds relating to any one purchase or sale separately. Stout expanding envelopes of a uniform size suitable for this purpose, and provided with a deep flap and tapes for tying, are manufactured by various firms, and are really indispensable if these documents are so to be preserved as befits their importance. All the deeds comprised in one parcel may be usefully summarised on a type-written schedule (giving date, nature of and the parties to each deed) which should be affixed in a permanent manner to the inside of the deep flap of the envelope. On the front of the envelope should be an endorsement in bold characters, giving the number of the parcel, parish and name of the vendor or purchaser. This information is only needed in respect of the ‘principal’ deed as being the one of prime importance. Here again an alphabetical index in book form is to be preferred to the card index, and the following headings will meet all requirements: No., Date, Name of Vendor or Purchaser, Number of Deeds, Parish, Remarks. [t must be noted that the ‘principal’ deed only will appear in this index; all antecedent or subsidiary ones are included in the schedule recommended above. All the deeds in each parcel should bear an individual and a progressive number, thus: 280/1, 280/2, and so on; it will be observed that the index is furnished with a column which shows the number of deeds or documents in each parcel. (¢) REGISTRATION DEPARTMENT. The filing of all papers and documents connected with the work of this department calls for separate and different treatment, owing to its peculiar circumstances. FILING 349 With respect to the general correspondence, the large majority of letters are received from and sent to stockbrokers, bankers, and solicitors, only a small percentage being between the department and the company’s shareholders; if, therefore, the correspondence is filed under the names of the senders or addresses, it is, without cross-referencing, difficult to trace the particular account to which it refers. The simplest and most efficient method is to file all letters under the names of the stock or shareholders to whose accounts they relate. By this system all correspondence connected with an account (whether in the name of one proprietor or more) is readily available as it is kept together, and preserves its identity by a progressive number, which is retained until the account is closed. An enlargement of the principle of numbering is found in the practice of some secretaries, who progressively number each account in their registers, and this number is adopted for reference in all subsequent correspondence relating to the account. The methods of filing and storing need not be on such comprehensive lines as those suggested in the earlier part of this chapter dealing with general correspondence. A ‘backing’ sheet bearing the number, and (if desired) the name or names composing the account is all that is needed. All letters, inwards and outwards, are fastened thereto, and the files, thus formed, are kept in box files or cases, which bear an appropriate endorsement. It may be urged as an objection to this method that in an office dealing with large numbers of shareholders’ accounts an accumulation of correspondence will soon result in congestion of space, but this objection can be met by a periodical removal to permanent storage. Considerable experience shows that the needs of the registration department are met by retaining for reference one year’s correspondence in addition to that of the current year. Annually, the cases containing the earlier files are removed to storage after they have been numbered and indexed for subsequent reference. If such a system of filing as has been indicated is adopted it will naturally include such documents as notices of change of address, and orders for the payment of dividends. Failing this, these documents should be progressively numbered and filed in numerical order, proper reference being made in the appropriate registers of the company. Transfer Deeds may conveniently be numbered in progressive order, and at intervals bound into volumes containing twelve months’ (or a lesser or longer period according to 350 SECRETARIAL PRACTICE circumstances) deeds. Unless the quantity of transfers is very small, such volumes should only relate to one stock or class or shares. The method of pasting transfer deeds into guard books is clumsy and antiquated, and leads to a collection of books which are difficult to handle. Closely connected with the filing of transfer deeds is the disposal of surrendered stock and share certificates, and a satisfactory method is found in affixing them to the counterfoils of the books whence they were originally issued. A brief reference may be endorsed on the certificate, indicating the progressive number of the transfer deed to which it relates and such other particulars as may facilitate future reference. (d) INSURANCE PoriciEs. These form a distinct class, and where a large number of properties is concerned, it is desirable to file them apart from other documents. They are best stored in cabinets of such dimensions as will permit them to be filed in an upright position, and may well be indexed (bearing progressive numbers) by the card system, as in many cases their importance is only for a limited period. Obsolete policies should, as they lapse, be removed from the cabinet and the indices marked accordingly. As a supplement to filing, complete records should be furnished on cards relating to each property or block of properties; a card designed with the following heading will be found useful in keeping necessary details: Insurance of; Against; Insured by; Insured with; Office or Fund, Proportion; Policy Nos.; Sum Insured; Rates; Discounts; Premiums; Premiums paid; From, To; From, To; From, To (i.e. dates covered by premium payments). On the back of the record card spaces may be provided for particulars of any special obligations under the policies and of any claims arising thereunder. The latter being shown as under: Policy No., Reasons for Claim, Amount of Claim, Amount Paid. (¢) There are many papers and documents dealt with in the secretary’s office which do not come within the range of the foregoing sections. Periodical returns and statements, records of staff, analyses of sales and output, and the many unclassified items with which every secretary has to deal, have to be preserved—some temporarily, other permanently— and these must largely be dealt with as conditions may dictate. Generally speaking, such miscellaneous documents should bear a progressive number, and be recorded by means of a card or book index, any periodical transfer or destruction being recorded therein. FILING 351 Finally, as eventually files of correspondence and documents (or the majority of them) find their way to cellars or strong rooms, it is imperative that a simple yet complete and up-todate record of the contents of such storage places be kept. Simplicity has been urged throughout this chapter, and here again it is recommended. A progressive number, company’s name (if more than one company is dealt with by the office), and a brief indication of the contents of each parcel, added to which must be given the location of the parcel, z.e. the number of shelf or locker, if such be part of the equipment, will suffice, and should enable the filing staff to obtain any desired parcel with the minimum of delay. It should be a strict rule that the storage should be under the control of the filing staff, through whom alone any required document or parcel should be obtained. CHAPTER XXII: STAMP DUTIES IN considering the imposition of duties it is necessary to bear in mind that Acts of this character must be strictly construed according to the natural interpretation of the words used—in other words, effect must be given to the intention of the legislature, as that intention is to be gathered from the language employed, having regard to the context in connection with which it is employed. The subject, therefore, cannot be taxed without clear words for the purpose. [t rests upon the parties to an instrument and the persons concerned in the preparation of it, to take care that the law is not evaded, and s. 5 of the Stamp Act, 1891, imposes a penalty upon them if there is any neglect to set forth fully and truly in the instrument all the facts and circumstances affecting the liability thereof to duty, or the amount of duty with which it is chargeable. If an instrument is of such description as to fall under two or more heads of charge, and consequently may be liable to duty at different rates, it should be stamped with duty at the highest rate. The most recent decision on this subject was given in 1908 by the House of Lords in the case of Speyer Brothers v. The Commissioners of Inland Revenue (1908), A.C. 92. Impressed The Stamp Act, 1891, provides that, except where express and Adhesive provision is made to the contrary, stamp duties for the time Stamps. being chargeable by law upon any instrument are to be denoted by impressed stamps only, and accordingly adhesive stamps ate only applicable to a few descriptions of instruments. Where the use of adhesive stamps is allowed, the ordinary stamps for denoting postage and revenue may be used for an instrument charged with a duty not exceeding 2s. 6d., unless an appropriated stamp is provided, as in the case of foreign bills or notes. In all cases the adhesive stamp must be cancelled by writing upon it the name or initials of the person or firm and the date, or the stamp must be otherwise effectively cancelled, so as to render it incapable of further use. The Act also provides that an instrument containing or relating to several distinct matters z= STAMP DUTIES 353 is to be separately and distinctly charged as if it were a separate instrument with duty in respect of each of the matters. The effect of this provision may be illustrated by two of several cases decided thereon. In these two cases it was held (1) that an instrument containing an appointment of new trustees and also vesting the trust property in them was chargeable in respect both of the appointment and of the vesting [Hadgett v. Inland Revenue, L. R., 3 Ex. D. 46]; and (2) that a deed of separation between a husband and wife containing a covenant by the husband to pay an annuity to the wife was chargeable as a deed as well as in respect of the covenant [Lewis and Lewis v. Inland Revenue (1898), 2 Q.B. 290]. ‘Denoting’ stamps are provided to meet the case of in- ‘ Denoting struments where the amount of duty payable depends upon Stamps. the duty borne by some other instrument. These stamps are used for duplicates or counterparts of instruments generally, where the maximum duty of five shillings impressed thereon is less than the duty charged on the original instrument, and for other instruments executed as collateral or substituted instruments charged with a lower rate of duty by reason of their being collateral to or in substitution for instruments which bear a higher rate of duty, e.g. in the case of marketable securities charged with a reduced rate of duty by reason of their having been issued in substitution for an original marketable security which was duly stamped. Instruments stamped with a low rate of duty by reason of higher duty having been paid on some other instrument must bear a denoting stamp to make them available. These stamps are impressed without any payment upon production to the proper officer of Inland Revenue of all the instruments necessary to satisfy him that the full duty has been paid. Another stamp, termed an ‘adjudication’ stamp, is also provided for the case of executed instruments submitted to the Commissioners of Inland Revenue for the purpose of the stamp duty thereon being assessed by them, and where this stamp is impressed on an instrument no question is afterwards permitted as to the sufficiency of the duty paid thereon. The general rule with regard to stamping executed instruments not prohibited by law to be stamped after execution is that they are allowed to be stamped in the case of agreements under hand within fourteen days, and in the case of other instruments within thirty days after first execution without payment of a penalty. Afterwards a penalty is exigible except in the case of the majority of Adjudication Stamps. Stamping of Executed Instruments. 354 SECRETARIAL PRACTICE instruments first executed abroad which may be stamped without penalty at any time within thirty days after being first received in the United Kingdom. The rules on this subject are set forth in s. 15 of the Stamp Act, 1891, as amended by s. 15 of the Finance Act, 1895. As regards instruments not attracting ad valorem duty the waiver of a penalty in case the documents are not stamped within the periods above mentioned is at the discretion of the commissioners. Dealing with the subject of the charge of stamp duties with which secretaries of companies are more immediately concerned, it may be well considered that the first in importance of these duties as affecting secretaries of companies is that which must be paid on the registration of a company. These duties affect the memorandum and articles of association and the capital of the company. Memo- The Companies Act, 1929, provides in s. 3 that the memoanit aga randum of association, and in s. g that the articles of associa-Association tion, shall in each case bear the same stamp duty as if it were "a deed. This duty is 10s. Capital Duty. The duty on the capital of a company was first charged in 1888, and was confined to share capital. It was extended in 1899 to loan capital. The principal enactments now existing as respects share capital are contained in ss. 112 and 113 of the Stamp Act, 1891. Of these sections the first relates to the capital of companies registered with limited liability under the Companies Acts, and the second, as amended by s. 12 of the Finance Act, 1896, relates to the capital of every other corporation or company where the liability of the shareholders is limited. The liability to duty extends in both cases to any increase of the authorised capital, and the duty now payable is charged at the rate of £1 per cent. by s. 39 of the Finance Act, 1920. The duty is payable upon a statement of the amount of the nominal share capital. The expression ‘nominal share capital’ was held in 1893 {4.-G. v. Milford Docks Co., 69 L.T.R. 453] to mean the capital of the shareholders, whether divided into shares or stock, as distinguished from borrowed capital. The increase of registered capital means an increase of the maximum amount of capital which a company has power to issue, and if a resolution is passed for an increase to a particular sum the duty is payable immediately on this sum, although at the time of the passing of the resolution the issue of a portion of this increase is alone contemplated. The position in this matter is clearly defined in a case [A.-G. v. Anglo-Argentine Tramway Co. Share Capital. STAMP DUTIES 353 (1909), 1 K.B. 677] which related to a resolution passed on July 26, 1907, for an increase of capital to an amount not exceeding £5,000,000, and two resolutions subsequently passed for actual increases of £200,000 and £2,800,000 respectively, upon which two sums duty was tendered and refused, and it was held that duty was payable on the £5,000,000. Questions have arisen as to the liability to this duty in the case of a consolidation or a re-arrangement of the capital of a company. The leading case on this subject is the Midland Railway Company v. The Attorney-General [(1902), A.C. 171], which had reference to a Special Act of Parliament by which the Midland Railway Company was authorised to re-arrange and consolidate its several descriptions of capital, and the effect of the arrangement was that (1) certain stocks bearing interest at fixed rates were consolidated into one stock bearing a uniform rate of interest, whilst the nominal amount of the stock issued to some of the holders was increased and (2) the ordinary stock was cancelled and extinguished, and in lieu thereof two stocks each for the same amount were created as ‘preferred’ and ‘deferred’ ordinary stocks. It was held by the House of Lords that in each case the increase in the total nominal amount of the stock was an increase in respect of which the duty was payable. In the same way the taking over by one company of the business of another company, in consideration of shares issued by the absorbing company upon an authority by statute to increase its capital, was held to involve a liability to the payment of duty by this company [Great Northern Piccadilly and Brompton Ry. Co. v. A.-G. (1909), A.C. 1]. In the case of a registered company the statement is to be delivered to the Registrar of Companies, and the duty on the first capital is payable on registration, and on any increase is payable within fifteen days after the passing of the resolution by which the capital is increased. In the case of any other corporation or company the statement is to be delivered to the Commissioners of Inland Revenue within one month after the date of the formation of the corporation or company or of the increase being authorised. Since the coming into force of the Finance Act, 1927, it will, however, generally be possible to secure a substantial reduction of the duty payable on the statement of nominal share capital on a reconstruction or amalgamation [see s. 55 of the Finance Act, 1927, as amended by s. 31 of the Finance Act, 1928, and supra, p 210) 356 SECRETARIAL PRACTICE Loan Capital. The duty on loan capital is charged by s. 8 of the Finance Act, 1899, as amended by s. 10 of the Finance Act, 1907. It is payable by every local authority, corporation, company, or body of persons formed or established in the United Kingdom upon a statement to be delivered to the Commissioners of Inland Revenue before the issue of the loan, and the duty payable is charged at the rate of 2s. 64. per cent. Loan capital is defined as meaning any debenture stock, or any capital which is borrowed or has the character of borrowed money. It 1s, however, provided that the duty is not to be charged to the extent to which it is shown to the satisfaction of the Commissioners that the stamp duty payable in respect of a mortgage or marketable security has been paid on any trust deed or other document securing the loan capital proposed to be issued. In any such case a statement need not be rendered. Questions have’ arisen as to whether the conversion or consolidation of loan capital is an issue of loan capital. This is illustrated by the case of The Attorney-General v. The Regent's Canal and Dock Company (1904), 1 K.B. 263, which related to the issue of debenture stock at one rate of interest in extinction of existing loans secured by three different debenture stocks at varying rates of interest, the amount of the new stock issued to each holder being such an increased amount as would enable him to receive the same interest as he previously had. By this means the nominal amount of the new stock considerably exceeded the nominal aggregate amount of the three previous stocks, and it was held by the Court of Appeal that there had been an issue of loan capital in respect of which duty was payable under the section. The decision in this case was followed by the Court of Appeal, and was affirmed by the House of Lords in the case of The Attorney-General v. The London and India Docks Company (1909), A.C. 7, relating to an issue of debenture stock in two classes which became merged in a new statutory company where the operation did not involve the raising from the public of any additional capital. There is in this respect a marked difference between a consolidation of nominal share capital and a consolidation of loan capital, seeing that a consolidation of share capital without an increase does not attract duty. The law was accordingly amended by s. 10 of the Finance Act, 1907, which provided that where after August 9, 19o7, duty has been paid relating to loan capital, and there is afterwards a conversion or consolidation of the loan capital to which the statement relates. and a consequent delivery of a new statement STAMP DUTIES 357 of the converted and consolidated capital, duty on so much of the loan capital converted or consolidated as is shown to the satisfaction of the Commissioners of Inland Revenue to have been included in the first statement shall be repayable at 2s. per cent. The instruments next in importance to secretaries of companies are the instruments in use in connection with the business of the company. An agreement executed under the seal of a company, which is not otherwise charged with stamp duty, is chargeable in England with the fixed duty of 10s., but in Scotland is chargeable with the duty of 64., unless it contains a clause of registration. It is not, however, necessary that all agreements with a company should be under the seal of the company, as the Companies Act, 1929, provides in s. 29 (1) that ‘a contract which, if made between private persons would be by law required to be in writing signed by the parties to be charged therewith, may be made on behalf of the company in writing signed by any person acting under its authority, express or mplied’ and such a contract may in the same manner be varied or discharged [s. 29 (3)]. A contract by a company made as provided by this section, being merely an agreement under the hand of an officer of the company is charged with the stamp duty of 6d. only. This duty may be denoted by an adhesive stamp, and there are five exemptions from the duty of which the first three are important, and are (1) when the matter of the agreement is not of the value of £5; (2) when it is for the hire of a labourer, artificer, manufacturer, or menial servant; and (3) when it is for or relating to the sale of goods, wares, or merchandise. The duty on letters of allotment and letters of renunciation Letters of or any other document having the effect of a letter of allot- Allotment. ment of shares or loans is 1d. where the nominal amount allotted is less than £5, and 6d. in other cases. A separate duty is chargeable in respect of letters of allotment and letters of renunciation although contained in the same instrument. The duty on a letter of renunciation, whether charged with td. or 6d., may be denoted by an adhesive stamp; but impressed stamps are necessary in the case of any other of these documents, and the stamp must be impressed before signature. The duty on an affidavit or statutory declaration is 2s. 64. Affidavits There are six exemptions from this duty, but the only exemp- and tion which is important to secretaries of companies is the Staosiory Exemption No. 2, which, as amended bv s. 6 of the Finance ’ Transfers of Stocks, Shares, and Securities. Gifts inter vivos. SECRETARIAL PRACTICE fa 1907, includes any ‘affidavit or declaration required by aw. Until 1907 it was necessary for the purpose of this exemption that an affidavit or declaration required by law should be made before a justice of the peace, but this is not now necessary. The document must, however, be required by law, and the exemption is, therefore, not applicable to a statutory declaration required by a company to be made upon the death of the holder of stocks or shares merely to establish the identity of the deceased person with the person whose name appears on the register of stocks and shares. A statutory declaration relating to one transaction is not liable to more than one duty by reason of its being a joint declaration made as to the whole of it by one person, and as to part of it by another person [Reversionary Interest Society v. Inland Revenue, 22 T.L.R., 740]. One of the most important duties in the business of a sompany is the keeping of the register of stocks, shares and securities, and the entering of transfers of stocks and shares and securities on that register. The transfer of any description of registered shares, stocks or securities in a company is required to be evidenced by an instrument of transfer; no transfer can be registered unless a proper instrument of transfer is delivered to the company [s. 63 of the Companies Act, 1929], and the instrument, if the transfer is on sale, is charged by the Stamp Act, 1891, amended by the Finance Act, 1920, with duty according to the consideration passing from the purchaser to the vendor. For the rates of duty see Appendix A. A transfer operating as a voluntary disposition #nfer vivos is chargeable with the like stamp duty as a transfer on sale with the substitution of the value of the shares or stock transferred for the consideration, and applies equally to transfers of registered marketable securities. The Act provides in sub-s. (2) of s. 74 that no transfer operating as a voluntary disposition inter vivos shall be deemed to be duly stamped unless the Commissioners of Inland Revenue have expressed their opinion thereon, and a secretary of a company can therefore refuse to accept for registration any such transfer unless it bears an adjudication stamp. The charge of ad valorem duty does not apply in seven cases of transfer specified in the Inland Revenue Circular (see Appendix A), to which should be added two other cases, viz., the transfer of stock or shares by an executor or administrator to himself in his representative capacity and transfers to a dealer on a Stock Exchange (as defined by s. 42 of the Finance Act, 1020), or his nominee when the transaction to STAMP DUTIES 359 which the transfer relates has been carried out by the dealer in the ordinary course of his business (see also Appendix A). In all these cases the duty is 10s. A transfer of shares or stock which after being executed in the United Kingdom is sent unstamped to the Colonies or abroad for completion and return is allowed to be stamped without penalty if it is presented for stamping within thirty days after its return. This is a slight relaxation of the precise terms of s. 15 of the Act of 1891, which allows instruments first executed abroad and received in the United Kingdom for the first time after execution to be stamped within thirty days. The concession was made by the Commissioners of Inland Revenue in the year 1896 in view of the risk of the loss of a stamped document in transit, and of course only applies on due proof that the transfer is presented for stamping within the thirty days. There is a provision in s. 115 of the Act of 189r which enables a company to enter into an agreement with the Commissioners of Inland Revenue for the payment of a half-yearly composition in lieu of the duty on the transfers of the stock of the company. The entering into such an agreement is, however, subject to the absolute discretion of the Commissioners, and for some years past no such agreement has been entered into with a company. The stamp duty payable on a share warrant is a duty equal Share to three times the amount of ad valorem duty which would be Warrants chargeable on a deed transferring the share or shares or stock “© ©arer specified in the warrant if the consideration for the transfer were the nominal value of the share or shares or stock. The duty was extended in 189g to any instrument to bearer issued by a company formed or established in the United Kingdom and having the effect of a share warrant. Loan capital when not represented by debenture stock is Marketable usually secured by bonds or debentures. These may either Securities. be transferable on a register or may be bearer securities. The charge of duty was in 1862 made applicable to securities by or on behalf of any foreign state or government or foreign or colonial municipal body, corporation or company, bearing date or signed after June 3, 1862, if made or issued in the United Kingdom, or if the interest is payable in the United Kingdom and they are transferred or negotiated in the United Kingdom. The charge was extended in 1885 to securities of this character which, although originally issued abroad, are subsequently offered for subscription and delivered to a subscriber in the United Kingdom. This extension Composition of Duty. 360 SECRETARIAL PRACTICE Trust Deeds. Registered Bonds. Securities to Bearer. followed a decision in 1876 in the case of Grenfell v. The Commissioners of Inland Revenue [1 Ex. D. 242], in which it had been held that securities tendered for and purchased en bloc in New York and subsequently placed upon the British market and allotted and delivered by the purchasers to persons in the United Kingdom who offered to take them upon the terms of a prospectus issued to them by the purchasers, were made and issued in New York. It frequently happens that debentures or debenture stock are secured by trust deeds, and the practice with regard to stamping these deeds is as follows: If the trust deed is to secure debentures, it is stamped with the fixed duty of 10s. and the ad valorem duty is paid upon the debentures at the rate properly applicable to them. If, however, the trust deed is to secure debenture stock, the certificates for the stock are not chargeable with any duty, and the trust deed is accordingly stamped with the same ad valorem duty as a mortgage—namely, a duty at the rate of 2s. 6d. per cent. The stamp duty charged upon registered bonds or securities is at the rate of 2s. 6d. per cent. as in the case of a mortgage, or if issued in substitution for a like security which was duly stamped is at the rate of 64. per cent., but since August 4th, 1903, the maximum duty is 10s., as provided by s. 7 of the Revenue Act, 1903. The duty payable upon the transfer of such securities is the same as in the case of a transfer of shares or stock. These same rates of duty apply to all colonial government securities. Until the year 1910 the stamp duty charged upon bearer securities (except colonial government securities), bearing date or signed after August 6, 1885, was charged at the rate of 1s. for every £10 or fractional part of £10, or in the case of such a security issued in substitution for a like security duly stamped at the rate of 64. for every £20 or fractional part of £20. The stamp duty on securities bearing date before or on August 6th, 1885, was the same as upon registered securities. Before the year 189g three considerations had to be taken into account for the purpose of determining whether a foreign bearer security transferred or negotiated in the United Kingdom was chargeable with stamp duty— namely: (1) the date of the security; (2) whether the security was made or issued in the United Kingdom; and if not (3) whether the interest thereon was payable in the United Kingdom, but as from August 1st, in that year the charge of duty of 1s. for every £10 or fractions part of £10 was applied by s. 4 of the Finance Act, 1899, to foreign and colonial STAMP DUTIES 361 bearer securities of every description except colonial government securities, and accordingly none of these considerations are now material, and the same charge of duty was also applied to foreign share warrants and stock certificates to bearer issued by any company formed or established out of the United Kingdom and transferred or negotiated in the United Kingdom. It is immaterial whether the security is or is not a substituted security, as no provision is made for a differential rate of duty by reference to a security to which this section applies being substituted for a like security duly stamped. The Finance Act, 1899, also contains in s. 6 an important provision making these charges of duty applicable to all instruments used for the purpose of transferring or negotiating the right to any marketable security, share, or stock if delivery thereof is, by usage, treated as sufficient for the purpose of a sale on the market. The charges of duty on marketable securities to bearer other than colonial government securities or colonial municipal securities were doubled by s. 76 of the Finance (1909-10) Act, 1910, so that the charge of duty on all foreign marketable securities to bearer except colonial government securities and colonial municipal securities, was increased as from April 29th, 1910, from 1s. to 2s., and by the Finance Act, 1920, to 4s. for every £10 or fractional part of £10. The rate of charge applicable to foreign share warrants and foreign stock certificates which was also doubled by the same section is likewise 4s. per £10 nominal value, and is chargeable on first negotiation in the United Kingdom. The rate of duty on colonial municipal securities to bearer is now at 2s. for every £10 or fractional part of £10, and colonial government securities are chargeable at the rate of 5s. per £100 or fractional part thereof, whilst the rates for bearer securities of the United Kingdom, if issued on or before August 6th, 1885, were increased by the Finance (1909-10) Act, 1910 from 2s. 6d. to 5s. per cent., or in the case of substituted securities from bd. to 1s. per cent. with a maximum of £1 or if issued after that date from 1s. to 2s. for every £10 or fractional part of £10, or in the case of substituted securities from 6d. to 1s. for every £20 or fractional part of £20. These rates were increased by the Finance Act, 1920, to 4s. per £10 or fractional part thereof, or if given in substitution for a like security duly stamped, 2s. per £20 or part thereof. ~The duty was reduced by s. 13 of the Finance Act, 1911, where the amount secured is repayable within the period 362 SECRETARIAL PRACTICE of three years from the date when the duty becomes chargeable—that is to say, the first issue of the security, or, in the case of a security not issued in the United Kingdom, the first transfer, or negotiation in the United Kingdom— and the date is conspicuously stated on the face of the security. The reduced duty, which applies to all bearer securities not being colonial government securities, is for every £10, or fractional part, 6d., if the security will expire within a year, and 1s. if the security will expire after a year and within three years; and it 41s provided that if the security is not paid off within the stated period, and there is any subsequent dealing, the full rate of duty shall become payable, subject to an allowance of the duty already paid. The duty chargeable in respect of a substituted security Joes not apply where the reduced rate of duty is paid under “his section. Loans repay- The duty is charged on the amount secured, and accordible 5 a ingly, if a debenture is issued upon a loan of a sum repayable "unconditionally with a premium thereon, the aggregate amount of the loan and the premium is the amount secured upon which the duty is payable. This was decided in the case of Rowell v. The Commissioners of Inland Revenue [(1897), 2 Q.B. 194], but is was subsequently held that if the terms of the debenture are such that the premium mentioned therein is only payable if it is paid off upon a notice, so that the payment of the premium merely depends upon the will and pleasure of the company, who are under no obligation to give the notice, the premium is not to be taken into account in computing the duty [Knights Deep Limited v. Inland Revenue (1900), 1 Q.B. 217], and this principle is considered to be equally applicable to a premium which will become payable only in the case of the voluntary winding up of the company issuing the security. Questions have arisen as to the extent of the charge of duty on a debenture, and reference may be made to the case of The British India Steam Navigation Co. v. The Commissioners of Inland Revenue, 7 Q.B.D. 165, decided in 1881, which related to an instrument not under seal issued by an English company, with coupons for interest attached, and purporting on the face of it to be a debenture, and to the decision of the House of Lords in 1908 in the case of Speyer Bros. v. The Commissioners of Inland Revenue (1907), 1 K.B. 246, which related to a Treasury note issued by a foreign government with coupons for interest attached, although giving no security to the holder beyond the promise to pay the face amount of the note, in both of which cases it was held that the charge of duty applied. It was held in STAMP DUTIES 363 the latter case that an argument that a security of a kind that can be described as marketable involves hypothecation of property as security for the debt for which it is issued is not tenable. It has also been held that the deposit of an anregistered debenture sealed in blank without name or date to secure a temporary loan is an issue of the debenture [Lyons v. The Tramways Syndicate, Limited (1906), 2 Ch. 216]. Questions have also arisen as to what amounts to an issue in this country. The principal cases on this subject are the Chicago Railway Terminal Elevator Company v. The Commissioners of Inland Revenue, 75 L.T.R. 572, decided in 1896, and Brown v. The Commussioners of Inland Revenue, 84 L.T.R. 71, decided in 1900; but the decisions in both cases were upon the special facts and circumstances applicable thereto, and it is hardly necessary, therefore, to dwell upon them. In considering the charge of duty at the lower rate applicable to securities given in substitution for like securities, it is necessary to determine whether a reduced rate applies, and in that case all the circumstances should be taken into account: e.g. whether the security is exchanged for one given by a different person and probably secured on different property [Mount Lyell Mining and Railway Co., Limited, v. Inland Revenue (1905), 1 K.B. 161]; and obviously debentures issued by a company in exchange for debentures of another company are not within the lower rate of charge. Another point with reference to marketable securities which it is important to bear in mind is that a marketable security is defined by s. 122 of the Act of 1891 as meaning ‘a security of such a description as to be capable of being sold in any stock market in the United Kingdom.” This definition was considered in 1888 in a case arising in Scotland (Texas Land and Cattle Company v. Inland Revenue, 16, Rettie 6g], and Lord Shand, in the course of his judgment, said: ‘It seems to me that the true interpretation of the clause must be to include, as marketable securities, all securities of such a description as to be capable according to the use and practice of stock markets of being there bought or sold.’ This interpretation was adopted in 1895 by the Court of Appeal in England in the case of Brown, Shipley & Co v. The Commissioners of Inland Revenue (1895), 2 U EF 598, and accordingly it is not necessary that there shouid Lc anv quotation of the security in an official list. S. 75 of the Companies Act, 1929, enables a company to Debentures redeem and re-issue debentures of the company under certain redeemed circumstances; but it is expressly provided that the re-issue jssued. Definition of Marketable Security. 364 SECRETARIAL PRACTICE of a debenture so redeemed, or the issue of another debenture n its place shall be treated as the issue of a new debenture for the purposes of stamp duty. In considering the duties payable on bills of exchange and promissory notes, the rates of which are set out in Appendix A, it is important to bear in mind that there is a clear distinction between the provisions of the stamp law and the provisions of the Bills of Exchange Act, 1882. S. 32 of the Stamp Act defines a bill of exchange as any ‘draft, order, cheque, and letter of credit, and any document or writing (except a bank note) entitling or purporting to entitle any person, whether named therein or not, to payment by any other person of, or to draw upon any other person for, any sum of money.’ Bills payable A fixed duty of 2d. is payable on bills payable on demand or on Demand. at sight or on presentation, or within three days after date or sight. The expression ‘bill of exchange payable on demand’ is defined by s. 32 as including (2) an order for the payment of any sum of money by a bill of exchange or promissory note, or for the delivery of any bill of exchange or promissory note in satisfaction of any sum of money, or for the payment of any sum of money out of any particular fund which may or may not be available, or upon any condition or contingency which may or may not be performed or happen; and an order for the payment of any sum of money weekly, monthly, or at any other stated periods, and also an order for the payment by any person at any time after the date thereof of any sum of money, and sent or delivered by the person making the same to the person by whom the payment is to be made, and not to the person to whom the payment is to be made, or to any person on his behalf.’ Accordingly bills payable on demand, within the meaning of this section, include orders directing the regular payments of subscriptions, premiums on policies of insurance, &c., and care should be taken that they bear the twopenny stamp. An order relating to the payment of money out of a particular fund chargeable with the fixed duty of two pence may take the form of a letter delivered to the payee. There are several cases on this subject, and the two following letters may be cited as illustrations: — 1. Please to remit to Messrs. Howe Whittaker and Tatham £700 and charge it in the account with me in (b) STAMP DUTIES 365 settling for the present year’s tithes of the rectory of Llambister [Braybrooke (Lord) v. Meredith, 13 Sim. 271]. 2. Out of any balance which may be due to me after final arrangement of the account I will thank you to pay to George Parsons, Esq., £1077 (Parsons v. Middlefon, 6 Hare 261). [hese documents differ from those relating to the payment of a debt to a third party in which questions have been raised as to whether they are chargeable as assignments or bills of exchange. The cases on this subject [see e.g, Brice v. Bannister 3 Q.B.D. 569 and Buck v. Robson, ibid. 686] establish that an order from a creditor to his debtor to pay to a third person and sent to the payee is an assignment and not an order for the payment of money. Questions have also arisen with regard to post-dated cheques, and there have been several decisions. No objection can now be raised to such a cheque, which is declared to be admissible as evidence in an action brought after the date of the cheque ‘Royal Bank of Scotland v. Tottenham (1894), 2 Q.B. 715] and similarly no objection can be taken to an ante-dated cheque. S. 34 provides that the fixed duty of 2d. ‘may be denoted by an adhesive stamp, which, where the bill is drawn in the United Kingdom, is to be cancelled by the person by whom the bill is signed before he delivers it out of his hands, custody, or power’; and s. 38 (2) provides that if a bill charged with the fixed duty of 2d. is presented for payment unstamped, ‘the person to whom it is presented may affix thereto an adhesive stamp and cancel the same 1 I he had been the drawer ol the bill.’ The duties on foreign bills, if not previously paid, are required by s. 35 of the Act to be paid by the holder thereof before he presents for payment or endorses, transfers, or in any manner negotiates or pays the bill or note.” These duties are denoted by adhesive stamps which are required to be cancelled by the person affixing them; but if they are not so -ancelled they may afterwards be cancelled by any bona fide holder. Foreign Bills. The duty on a bill of exchange or promissory note drawn for money in any foreign or colonial currency is to be calculated according to the value on the day of the date of the instrument of the money in British currency. This is provided for by s. 6 of the Act of 1891, and the rate of exchange is determined in accordance with the provisions of 5. I2 of the Finance %c*:. *8ao 366 SECRETARIAL PRACTICE Inland and The distinction between an inland bill or note and a Foreign Bills. foreign bill or note is explained in s. 36 of the Act of 1897, which is as follows: — A bill of exchange or promissory note which purports to be drawn or made out of the United Kingdom is for the purpose of determining the mode in which the stamp duty thereon is to be denoted to be deemed to have been so drawn or made, although it may in fact have been drawn or made within the United Kingdom. There is not any similar provision with regard to a bill or note which is in fact drawn or made out of the United Kingdom, but purports to be drawn or made within the United Kingdom. The stamp duty on such a bill or note should be denoted by the adhesive stamp applicable to a foreign bill or note. Sir M. D. Chalmers, in his work on the Bills of Exchange Act, summarises the effect of the Stamp Act as follows: — ‘Bills payable on demand, whether inland or foreign, may be stamped with either adhesive or impressed stamps, though of course a foreign bill would not be likely to be on an impressed stamp; foreign notes of all kinds and foreign bills payable otherwise than on demand must be stamped with adhesive stamps; inland notes of all kinds and inland bills payable otherwise than on demand must be drawn on impressed stamps.’ Penalties for S. 38 (1) provides that ‘every person who issues, indorses, [ssuing transfers, negotiates, presents for payment, or pays, any bill Dnstamped of exchange or promissory note liable to duty and not being ’ duly stamped shall incur a fine of £10, and the person who takes or receives from any other person any such bill or note either in payment or as security, or by purchase or otherwise, shall not be entitled to recover thereon, or to make the same available for any purpose whatever.” The only qualification of this provision is that contained in s. 38 (2) already quoted relating to bills chargeable with the fixed duty of 24. Exemptions There are eleven exemptions from the charge of duty trom Duty on ypon bills of exchange and promissory notes. The most Lin A important of them relate to the business of banking and to the business of public departments. These latter include an exemption in favour of a ‘bill drawn in the United Kingdom for the sole purpose of remitting money to be placed to any account of public revenue.” This exemption was the subject of a decision [Committee of London Clearing Bankers Vv. Inland Revenue (1806), 1 O.B. 222] in which it was STAMP DUTIES 367 held that the exemption only applied to bills drawn for the sole purpose of remitting and placing to its proper account money which is already public money and was not therefore applicable to a transfer order on the Bank of England issued by the bank to a customer desiring to pay taxes by this means. The principal exemption in which secretaries of companies are interested is that in favour of coupons. This exemption was originally limited to coupons attached to and issued with any security. It was extended in 1889 to coupons issued with an agreement or memorandum for the renewal or extension of time for payment of a security, and in 1894, to any coupon being one of a set of coupons whether issued with the security or subsequently issued in a sheet. The last extension followed a decision [Rothschild v. Inland Revenue 1894), 2 Q.B. 142] that a coupon issued upon the exhaustion of the coupons attached to a perpetual security was not exempt. The duty payable upon a protest by a notary public de- Protest by pends upon the amount for which the bill or note was given. Notary. [f the amount does not exceed £100, so that the duty on the bill or note does not exceed 1s., the duty on the protest is the same as that paid upon the bill or note. In any other case, the duty on the protest is 1s. This duty may be denoted by an adhesive stamp. For the purpose of stamp duty, a policy of insurance is defined by s. 91 of the Act of 1891 as including ‘every writing whereby any contract of insurance is made or agreed to be made or is evidenced,” and the charges of duty vary according as the policy is for:— Sea Insurance; Life Insurance; or any other form of insurance. A contract chargeable as a policy of sea insurance applies to the insurance of a ship, or the machinery, tackle, or furniture of a ship or any goods on board or of the freight or any other interest which may lawfully be insured in or relating to any ship, and may cover in the case of goods not only a sea risk but also other risks incidental to the transit of the goods from the commencement of the transit to the ultimate destination covered by the insurance. Such a contract is not valid unless it is expressed in a policy. In considering the stamp duty payable on policies of sea insurance it is important to bear in mind that it is provided in s. 91 of the Marine Insurance Act, 1906, by which Act the ~rdinary law relating to marine insurance is codified that Exemption in favour of Coupons. Policies of Insurance. Policies of Sea Insurance. 368 SECRETARIAL PRACTICE ‘nothing in this Act or in any repeal effected thereby shall affect the provisions of the Stamp Act, 1891, or any enactment for the time being in force relating to the revenue.’ The stamp duties on policies of sea insurance vary according to circumstances. Where the premium for the insurance does not exceed the rate of 2s. 6d. per cent. of the sum insured the duty is 1d., and it is provided by s. 8 of the Finance Act, 1912, that this duty shall be payable where the premium is expressed to be a sum not exceeding the rate of 2s. 64. per cent. of the sum insured, although this premium is subject to an increase (whether defined or not in the policy) in the event of the occurrence .of a specified contingency. The section also provides that if, owing to the occurrence of the contingency, the premium is increased, so as to exceed the rate of 2s. 6d. per cent., the policy or a new policy may be stamped with the proper additional duty within thirty days after the date on which the increased duty is ascertained. In any other case the duty depends upon the sum insured, and the duties payable are as follows: — (a) In the case of a policy for a voyage the duty is at the rate of 3d. for every £250 or fractional part of £250 up to £1000, and thereafter 64. for every £500 of the sum insured ; In the case of a policy for time the duty is three times the amount payable on a voyage policy if the insurance be made for any time not exceeding six months, or six times that of a voyage policy if the time exceeds six months and does not exceed twelve months, but there is a provision for an additional duty of 64. if the policy contains a continuation clause. It is not necessary that a policy for time should be confined to one ship [Great Britain Steamship Premium Association v. White, 19 Rettie, 109]. It is necessary to specify in the policy :— (a) The particular risk or adventure; {b) The names of the subscribers or underwriters; and (¢) The sum or sums insured. The provision requiring the names of the subscribers or underwriters to be inserted is a reproduction of the old law contained in an Act of 1795, when it was not competent for any body of persons except the Corporation of the London Assurance and the Royal Exchange Assurance to become assurers: and so long ago as the vear 1849 it was held in two ‘gy STAMP DUTIES 369 cases [Reid v. Allan, 19 Law Journ. Exch. 39 and Dowdall v. Allan, 19 Law Journ., Q.B. 41] that where policies are effected by a corporation or company it is a sufficient compliance with this provision if the name of the company or corporation is specified. In the case of a policy issued by a mutual insurance association it was held in 1880 [Marine Mutual Insurance Association Lid. v. Young, 43 L.T.R. 441] that the affixing of the seal of the association authenticated by the signature of the manager is sufficient. The policy may be either for a voyage or for time; but if for time the duration may not (except as provided by s. 11 of the Finance Act, 1901) exceed twelve months. It has been established by a number of judicial decisions that a slip which is the first memorandum in an ordinary insurance is a contract of insurance, and not being a policy is not an instrument upon which an action can be maintained, but it can be looked at for collateral purposes wherever it is material. The omission to issue a policy cannot be waived by agreement between parties in order to obtain a decision upon questions arising upon a contract of insurance [Nixon v. Albion Marine Insurance Co., 2 Exch. 338]. A decision of much importance was given in 1900 in a proceeding in the Commercial Court [Charlesworth v. Faber, 5 Com. Cas. 408] relating to a time policy for twelve months, which included a clause as follows: — Should the vessel be at sea or abroad on the expiration of this policy it is agreed to hold her covered until arrival at her port of final destination in the United Kingdom or on the continent of Europe at a pro rata daily premium to the within. Bigham J. (Lord Mersey) held that this policy was void at law as being a contract of sea insurance made for a longer period than twelve months, and his decision was followed and affirmed by the Court of Appeal in another case [Royal Exchange Assurance v. Sjoforsakrings Aktiebolaget Vega (1901), 2 K.B. 567], and led to an amendment of the law by s. 11 of the Finance Act, 1901, which allowed the insertion of a continuation clause as defined in the section and charged on any policy containing such a clause an additional duty of bd. The section provided also for the payment, either upon that policy or upon a new policy, of the duty applicable to the new risk covered by the clause if it attaches. This additional duty is payable within thirty days after the risk has attached and is the duty applicable to a policy for a voyage. Continuation Clause. 370 SECRETARIAL PRACTICE There is a special provision in s. 8 of the Finance Act, 1903, which relates to ships under construction that a policy to cover this risk is to be charged as a policy for a voyage, and if made to cover a period of time is not to be deemed a time policy. Such a policy may accordingly cover a period of time exceeding twelve months. It is provided in s. 95 of the Act of 1891 that a policy of sea insurance may not be stamped after it is signed or underwritten except in two cases, of which the first relates to policies of mutual insurance and allows a duly stamped policy to be stamped with further duty to cover a proposed extension of the sum for which it was originally underwritten, and the second relates to policies executed out of but enforceable within the United Kingdom, and allows them to be stamped within ten days after their first being received in the United Kingdom. To these two exceptions must be added the stamping of a policy to cover a risk under a continuation clause or an increase of the premium as provided for by the Acts of Igor and 1912. There is a special provision in s. g6 of the Act of 1891 permitting alterations in a policy under certain circumstances. These alterations must be made before notice of the determination of the risk insured. In an old case [Sawtell v. Loudon, 5 Taunt 358] decided in 1814, it was held that a mistake by a broker in making out a policy as upon the ship instead of upon goods in the ship could be rectified by a memorandum signed by the underwriter. In like manner a mistake in the name of the ship insured can be rectified, and similarly other alterations of the same character which do not affect the stamp duty may be made, but it was held in 180%, in the case of Hill v. Patton [8 East 373], that a policy on a ship and outfit for a voyage cannot be altered after the ship has sailed and the risk has attached so as to make it available for the ship and goods, seeing that the outfit of a ship is an entirely different subiect of insurance from the goods on board. Although a policy of sea insurance cannot, except as above mentioned, be stamped after it is signed or underwritten, it may, under sub-s. (2) of s. 95 of the Act of 1891, be received in evidence as provided by s. 14 of the same Act upon payment of the duty charged thereon and a penalty of £100 as the penalty payable on stamping. Policies of A policy of life insurance is defined by s. 98 of the Stamp Life Act, 1891, as meaning ‘a policy of insurance upon any life or Insurance. {ives or upon any event or contingency relating to or depending STAMP DUTIES upon any life or lives except a policy of insurance against accident.” - The stamp duty payable on a policy of life insurance varies according to the amount insured. Where the amount insured does not exceed £10 the duty is 1d.: Exceeds £10 and does not exceed £25, 3d.: Exceeds £25 and does not exceed £500, 64. for every £50; Exceeds £500 and does not exceed £1000, Is. for every £100; Exceeds £1000, 10s. for every £1000. The same liability attaches to fractional parts of £50 and £100 and £1000 respectively. A contract of life assurance must be followed by the issue of a stamped policy within one month after receiving or taking credit for the premium. The duty applies to an endowment policy being a policy for a sum to be paid at a specified age with or without a condition that in the event of the death of the insured under that age a smaller sum shall be paid to his executors [Prudential Insurance Co. v. Inland Revenue (1904), 2 K.B. 658]. A policy effected under the Married Women’s Property Act, 1882, may be chargeable also with duty as a settlement. The duty does not apply to policies on the lives of cattle "A.-G. v. Cleobury, 4 Exch. R. 65]. Other policies relate to insurances against accident as defined by s. 98 of the Act, 1891, and payments to be made during sickness or incapacity from personal injury. The definition was extended by s. 11 of the Finance Act, 1899, as amended by s. 8 of the Finance Act, 1907, to employers’ liability policies where the annual premium does not exceed £2. They also relate to policies by way of indemnity against loss or damage of or to any property. All these policies are chargeable with the stamp duty of 6d., which may be denoted by an adhesive stamp, and as in the case of life insurance a stamped policy must be issued within one month after receiving or taking credit for the premium. An employer’s liability policy, where the annual premium Employer’s is £2 or upwards, is chargeable with the duty of 10s. or of 44., Liability. according as the policy is under seal or under hand. it is important to bear in mind that agreements in the form of policies for the purpose of guaranteeing payments, e.g. principal or interest on a mortgage, are not chargeable under this head, but are chargeable as agreements [Mortgage Insurance Corporation. Limited, v. Inland Revenue, 57 L.J.R. 371 Risks Insured Without Issue of Policy. Receipts. 372 0Q.B., 630; and Mortgage Insurance Corporation, Limited, v Inland Revenue, 21 Q.B.D. 352]. The Inland Revenue authorities have, however, claimed that a guarantee under seal must be stamped as a bond with ad valorem duty on the amount guaranteed. It is therefore suggested that with a view to preventing such a claim being made such guarantees should instead of being given under seal be executed by some officer on behalf of the company. To enable this course to be adopted it is essential that a resolution should be passed expressly authorising the officer in question to execute the document. The definition of a policy of insurance against accident extends to a notice or advertisement in a newspaper or other publication which purports to insure the payment of money to the holder thereof in circumstances in which a policy, if issued, would be a policy chargeable with the fixed duty of 1d., and it is provided by s. 116 of the Act of 1891 as extended by s. 13 of the Finance Act, 1896, and s. 8 of the Finance Act, 1907, that the penny duty payable on a policy for the like purpose may be compounded for under an agreement entered into with the Commissioners of Inland Revenue for the delivery to them of quarterly accounts of all sums received by way of premium and the payment of a duty equal to 5 per cent. on the aggregate amount of these sums. This composition corresponds with a composition allowed since 1849 by the private Acts of the Railway Passengers’ Assurance Company and the Ocean Accident and Guarantee Corporation, Ltd., in respect of risks insured without the issue of a formal policy. A receipt is defined by s. 101 of the Act of 1891 as including ‘any note, memorandum, or writing whereby any money amounting to £2 or upwards or any bill of exchange or promissory note for money amounting to fz or upwards is acknowledged or expressed to have been received or deposited or paid or whereby any debt or demand or any part of a debt or demand of the amount of £2 or upwards is acknowledged to have been settled, satisfied, or discharged, or which signifies or imports any such acknowledgment, and whether the same is or is not signed with the name of any person.’ The section provides that the duty may be denoted by an adhesive stamp ‘which is to be cancelled by the person by whom the receipt is given before he delivers it out of his hands’; and s. 103 provides that ‘if any person (I) gives a receipt liable to duty and not duly stamped, or (2) in any case where a receipt would be liable to duty refuses to give a receipt duly stamped, or (3) upon a payment to the amount of SECRETARIAL PRACTICE STAMP DUTIES 373 £2 or upwards gives a receipt not amounting to £2 or separates or divides the amount paid with intent to evade the duty, he shall incur a fine of £10.’ It will be observed that no particular form of words is now necessary to render a writing given for or upon the payment of money chargeable as a receipt, and that it is not necessary that the writing should be signed. There are numerous decisions upon the definition of a receipt. The use of the word ‘settled’ or of any form of writing, even a mere signature in a book in columns by which payment is acknowledged, is sufficient, and in the case of The Attorney-General v. The Carlton Bank, Limited (1899), 2 Q.B. 158, it was held that the initials by the secretary or cashier of a bank written in a book containing entries of sums collected or recovered by the salaried solicitor of the bank as an acknowledgment that moneys amounting to a total sum of £2 or upwards had been paid over by him to the bank rendered the duty payable. It has also been held in two other cases [General Council of the Bar v. Inland Revenue (1907), 1 K.B. 462], that the placing of his initials by a King’s Council or of his signature by a barrister against the fees marked on his brief as an acknowledgement of the payment of fees, amounting to £2 or upwards, is a receipt within the definition. The charge extends to every document signed as a receipt, and it is not material that the sum for which the receipt is given was included with other sums for which another receipt was given. Thus, in the case of The Attorney-General v. Ross (1909), 2 Ir. R. 246, it was held by the Court of Appeal in Ireland that a receipt given for rent amounting to £2 was chargeable with the duty, although the payment was included in a composite account for rent and goods for which another receipt, duly stamped, had been given, and the separate receipt for rent was stated to have been given for book-keeping purposes only. A receipt for a donation or subscription to a charity (payment of which could not generally be enforced at law) is in practice allowed exemption from duty. A receipt for a payment by cheque is a receipt for a bill of exchange within the definition, and when a payment amounting to £2 or upwards is made, it is not material whether it is a payment in full or on account. In the case of contra accounts, where a settlement 1s effected between the parties by payment of a balance and -e sum paid is less than £2, a receipt stamp is not necesbut it must be clear that the receipt was not in the form receint for the debt itself—it must show precisely what 374 SECRETARIAL PRACTICE —e.g. ‘Settled in contra.’ If a receipt for the debt is given it must be stamped. There are several exemptions from the duty on receipts; of these the most important are the receipts ‘given for money deposited in any bank or with any banker, to be accounted for and expressed to be received of the person to whom the same is to be accounted for,” receipts by bankers in the ordinary course of business upon a bill of exchange or promissory note duly stamped, receipts given upon duly stamped documents for the consideration expressed therein to be payable, receipts ‘given for or on account of any salary, pay or wages, or for or on account of any other like payment made to or for the account or benefit of any person, being the holder of an office or an employee, in respect of his office or employment, or for or on account of money paid in respect of any pension, superannuation allowance, compassionate allowance or other like allowance’ [Finance Act, 1924], and the receipts given for taxes or duties or in connection with Government business. There was formerly an exemption in favour of a receipt written upon a bill of exchange or promissory note, but this exemption was repealed in 1895 by s. 9 of the Finance Act of that year in consequence of a practice which had become established of including on one sheet of paper a cheque followed by a formal receipt in discharge of an account paid by the cheque for which a separate receipt would otherwise have been required. This practice was stated to be convenient for matters of account, but was a distinct loss to the revenue. Upon the repeal of the exemption it was provided that the name of the payee written upon a draft or order, if payable to order, shall not constitute 1 receipt chargeable with stamp duty. Duties and The greatest care is required by secretaries of companies Liabilities of jn dealing with instruments chargeable with stamp duty. Secretaries. g 14 of the Act of 1891 prescribes the terms upon which instruments not duly stamped may be received in evidence, and provides that such an instrument shall not be received in evidence unless it can be legally stamped after execution, and then only upon payment of the unpaid duty and certain penalties. The section proceeds in sub-s. (4) as follows: — Save as aforesaid, an instrument executed in any part of the United Kingdom or relating wheresoever executed to any property situate or to any matter or thing done or to be done in any part of the United Kingdom shall not, except in criminal proceedings, be given in evidence or be available for any purpose whatever unless it is duly stamped in accordance with the law in force at the time when it was first executed. STAMP DUTIES 375 Accordingly, when an instrument chargeable with duty is produced to the secretary of a company for any purpose it becomes his duty to ascertain that it is duly stamped before he can regard it as available for the purpose, and if any doubt arises it will rest upon the person producing it to satisfy him that it is duly stamped. In ordinary circumstances it is not, however, necessary to do more than to see that the instrument when produced appears to be sufficiently stamped, and in the case of a document bearing a proper adhesive stamp the presumption is that the stamp was affixed at the proper time unless the contrary is shown. In any case of doubt the person producing the instrument should be directed to apply to the commissioners of Inland Revenue for the duty to be determined as provided by s. 12 of the Act. The importance of the sub-section to secretaries of companies becomes apparent on a reference to s. 17 of the Act, which is as follows: — If any person whose office it is to enrol, register, or enter in or upon any rolls, books, or records, any instrument chargeable with duty enrols, registers, or enters any such instrument not being duly stamped, he shall incur a fine of £10. The responsibility of a secretary or registering officer of a company in this matter is similar to that of the Registrar of Companies, and it was established in 1888 in the case of R. v. The Registrar of Joint Stock Companies [21 Q.B.D. 131], relating to the refusal of the Registrar to file a contract on the ground that it was insufficiently stamped, that the proper mode of questioning the legality of his refusal was to present the contract for the adjudication of the Commissioners under s. 12 of the Act, and an application for a mandamus against the Registrar was accordingly refused. In the case of a transfer of shares or stock or marketable securities where a sum less than the market value is shown as the consideration for the transfer, or in the opinion of the secretary or registering officer there is any doubt as to the sufficiency of the stamp thereon, it is desirable that he should require the opinion of the Commissioners of Inland Revenue to be obtained, seeing that if the transfer is made (1) on a sale, (2) in satisfaction in the whole or in part of a pecuniary legacy which is chargeable as on a sale for the amount of the legacy discharged thereby, (3) in liquidation of a debt, or (4) in exchange for other securities, ad valorem duty is in each case payable on the value or agreed value of the 376 SECRETARIAL PRACTICE Adjudication Stamp. consideration, whilst if the transfer is made by way of gift inter vivos the ad valorem duty is payable on the value of the property transferred. In the case of Maynard v. The Consolidated Kent Collieries Corporation, Lid. [(1903), 2 K.B. 121, it was held that for the purpose of determining whether a transfer on a sale of shares presented to a company for registration was duly stamped the directors were entitled to go behind that which appeared on the face of the document so as to ascertain whether the consideration stated therein, and in respect of which the transfer was duly stamped, was less than the actual consideration which had been given, and that unless they were satisfied as to the sufficiency of the duty paid the directors were entitled to refuse registration. A similar refusal on the same grounds was upheld in a previous case [Flessig v. Harmony Proprietary Company, Lid.], which came before Mr. Justice Kekewich on January 18, 1899. It is provided by sub-s. (2) of s. 74 of the Finance (1909-10) Act, 1910, that no transfer made by way of gift inter vivos shall be deemed to be duly stamped unless an adjudication stamp has been obtained, and accordingly the secretary or registering officer of a company is in a position to refuse to register such a transfer unless it bears an adjudication stamp; but if the transfer is stamped with ad valorem duty upon the market value of the shares or stock or securities transferred, there will be practically no risk in accepting the transfer for registration without the adjudication stamp being impressed thereon, and the Commissioners of Inland Revenue have by notice definitely stated that they will not object if registering officers think fit to register transfers of stock or marketable securities which admittedly operate as voluntary dispositions -¢nfer vivos and are stamped with ad valorem duty upon the market value of the stock or securities at the date of the instrument without insisting upon adjudication. It will be open to the registering officer to obtain the adjudication stamp subsequently if any necessity for this course should arise; but such a necessity could hardly arise unless the production of the transfer were required as evidence before a Court in some civil proceeding. It is by no means easy for a registering officer to determine the particular circumstances under which a transfer is made; but where a transfer is made for a nominal consideration, he should require information to be given to him as to the facts relating to the transaction, and if the information is not furnished, or is not sufficient to enable him to satisfy himself as to the proper stamp duty, he should refuse to STAMP DUTIES 377 register the transfer until it bears the adjudication stamp, or an indication showing that the Commissioners of Inland Revenue have been satisfied is produced by the words Transfer passed for 10s.,’” with the signature of an officer of the Commissioners, and the stamp of his office, appearing upon a written explanation furnished to that officer which should be retained. If the information is furnished to the registering officer and is to the effect that the transfer was made by way of security for a loan, or on a re-transfer on repayment of a loan, or to mere nominees of the transferor where no beneficial interest passed, he should ask for a certificate setting forth the facts, and signed by the parties, or by the agent of one or both, being a solicitor or a member of a stock exchange, or a banker. In the case of a transfer to or by a bank, or its official nominee, a certificate signed by the proper representative of the bank to the effect that ‘the transfer is excepted from 5. 74 of the Finance (19og-10) Act, 1910, and is duly stamped’ may be regarded as sufficient. Although there is not any provision affecting the secretary of a company, it is considered that the fact that the stamp on a transfer is 10s. only is not to be regarded as necessarily implying notice of a trust, and reference may be made to s. 112 of the Law of Property Act, 1925, relating to the position of a purchaser in this matter. This section provides that where on a transfer of a mortgage the stamp duty if payable according to the amount of the debt transferred would exceed the sum of 10s., a purchaser shall not by reason only of the transfer bearing a 10s. stamp be deemed to have or have had any notice of a trust. I'he secretary of a company carrying on the business of life insurance should take care that no payment is made to the assignee of a life policy unless the assignment is duly stamped, as if such a payment is made, the duty not paid, together with the penalty payable on stamping, becomes under s. 118 of the Act of 1891 a debt due from the company to the Crown. 5. 42 of the Companies Act, 1929, requires that the company shall deliver to the Registrar of Companies for registration in the case of shares allotted as fully or partly paid up otherwise than in cash, a contract in writing constituting the title of the allottee to the allotment, together with any contract of sale or for services or other consideration in respect of which that allotment was made, such contract being duly stamped, or if the contract is not reduced to writing, the particulars of the contract stamped with the Shares Credited as Fully or Partly Paid. 378 SECRETARIAL PRACTICE same stamp duty as would have been payable if the contract had been reduced to writing. In the case of a contract reduced to writing it was held on June 22, 1906, in the case of Rex v. Registrar of Joint Stock Companies, ex parte Platt (K.B.D. not reported), that the Registrar was entitled to refuse to file a contract relating to the allotment of shares which does not show the true consideration for which the shares have been allotted, and it is provided in sub-s. (2) of s. 42 of the Act of 1929 that in the case of a contract not reduced to writing the Registrar may as a condition of filing the particulars (which are deemed an instrument within the meaning of the Stamp Act, 1891) require that the duty payable thereon shall be adjudicated. Where a contract for sale is in consideration of a sum of money and this sum is satisfied by a bill of exchange, the allotment of fully paid shares in exchange for the bill of exchange is not an allotment for a consideration other than cash [R. v. Registrar of Joint Stock Companies, ex parte Platt, not reported]. Liquidator in A liquidator in the voluntary winding-up of a company is Voluntary an officer of the company within the meaning of the section, Winding UP. aq it is his duty to pay out of the assets of the company the stamp duty in respect of any unfiled contract constituting the title of an allottee of shares allotted as fully or partly paid up otherwise than in cash and to file the contract [In re X Company, Limited, (1907), 2 Ch. 92]. By s. 281 of the Companies Act, 1929, certain documents relating to the property of a company are exempt from stamp duty in the case of a winding up by the Court and a creditors’ voluntary winding up. The only other section in the stamp laws which it is necessary to refer to in connection with the duties and liabilities of secretaries of companies is s. 21 of the Stamp Duties Management Act, 1891, which is as follows: — Any person who practises or is concerned in any fraudulent act, contrivance, or device not specially provided for by law with intent to defraud Her Majesty of any duty shall incur a fine of £50. This penalty has been enforced more than once against the secretary of a company who had been foolish enough to act ander pressure or to study the interests of persons concerned with the company rather than those of the revenue, with the result that stamp duty had been evaded. APPENDIX TABLE OF STAMP DUTIES AND FEES. i. ON REGISTRATION BY A COMPANY HAVING A SHARE CAPITAL. See Tenth Schedule of Companies Act, 1929. Nominal Share Capital. 100 500 ,000 (,500 2,000 3,000 1,000 5,000 6,000 7,000 3,000 9,000 [0,000 [1,000 [2,000 [3,000 [4,000 [5,000 16,000 [7,000 (8,000 [9,000 20,000 25.000 id valorem duty mn Statement of Capital. {£1 per cent.) J J J 9 oO o oO Oo oO oO Oo oO Oo oO oO oO J ig I; 20 30 40 50 60 70 80 90 [oo [10 [20 (30 [40 (50 i600 “ < oO oO J 0] oO oO [0] Cc y pm a | — pe i - Fee Stamps on Memorandum of Association. o 0 o o o oO oO oO oO o oO > 5 © 5 10 © 5 15 © 6 o o 6 5 o 6 10 o 515 o 7 O © 7 5 © 7 In - Total, including 10s. deed stamp on memorandum, 15s. deed and fee stamps on articles, and ss. each on the ‘ollowing :— ‘1) Declaration of compliance. (2) List of persons who have consented to be Directors (b). '3) Directors’ consent to act (b). '4) Contract to qualify, if there is any qualification (a), (0), (c). 2., 0 35 + © 46 5 o 57 5 © 67 10 © 77 15 © B8 o o 98 5 oO 108 10 © 118 15 oO 129 0 O I3 5 © 149 I0 © 15 I_ © 170 ¢ © 180 19C 2¢C 2U. a), (b), {c)—See footnote to next page. SECRETARIAL PRACTICE Nominal Share Capital. 30,000 35,000 40,000 45,000 50,000 60,000 70,000 80,000 00,000 100,000 [25,000 [50,000 [75,000 200,000 250,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1.000.000 Ad valorem duty on Statement of Capital. £1 per cent.) 4 Ss. d. 300 0 © 350 0 O 400 0 © 450 O © 500 0 © 6oo 0 oO 700 O © Boo 0 o goo 0 © 1,000 O © {,250 0 O©O ,j00 0 © 1,750 O © 2,000 O O 2,500 O O©O 3,000 0 © 1,000 O © 5,000 O O 5,000 0 © 7,000 ©O C 8,000 0 9,000 C [0 000 O Fee Stamps on Vlemorandum of Association. 4 Ss. a. II 5 O I2 10 © I3 I5 © I5 0 O 16 5 o 18 15 © 2 5 O 23 15 © 26 5 o 28 15 oO 30 0 © 31 5 O 32 10 © 33 I5 © 36 5 o 8 15 © 13 15 © ‘8 1: © 30 OO 5 C O ~~ 0 30 OO Total, including 10s. deed stamp on memorandum, 15s. deed and fee stamps on articles, and 5s. each on the following :— (1) Declaration of compliance. (2) List of persons who have consented to be Directors (b). f3) Directors’ consent to act (b). (4) Contract to qualify, if there is any qualification (a), (b), (c). i S. a. 313 I0 © 364 15 © 416 0 o 467 5 © 518 10 © 621 o oO 723 I0 © 826 o o 928 10 © 1,03 0 © 1,282 5 o 1,533 10 © 1,784 15 © 2,036 0 '©o 2,538 10 © 3,041 O © 4,046 0 oO 5051 O © 5052 5 O 7,052 5 O 8,052 - o 9,052 : © I0.0R2 & O And so on at the rate of one pound further capital duty on every £100 or fraction of £100. In addition to the documents mentioned in the last column, the following, if not filed on registration, must be filed prior to commencing business: Copy Register of Directors, notice of registered office, and prospectus or statement in lieu (b). 5s. each. Before a company which files a prospectus or statement in lieu (i.e. not a private company) can commence business, it must comply with s. 94 by filing the declaration therein mentioned and obtain the Registrar’s certificate. (a) (v (c) Required only when not signed for in memorandum. Not required in the case of a private company. Stamp dutv of 64. on cach contract if aualification is £5 or upwards in value. APPENDIX A 381 Companies’ Capital Duty is not payable by a company having y share capital if the liability of the members is unlimited. Fees for registration of any increase of share capital made after the first registration of the company, are the same per £1,000, or part of a £1,000, as would have been payable if the increased share capital had formed part of the original share capital at the time of registration. Provided that no company shall be liable to pay in respect of nominal share capital, on registration or afterwards, any greater amount of fees than £50. II. ON REGISTRATION BY A COMPANY LIMITED BY GUARANTEE AND NOT HAVING A SHARE CAPITAL. See Tenth Schedule of Companies Act, 1929 No. of Members not exceeding fee Stamps on memo. Total, including 10s. deed stamp on memorandum, :5s. deed and fee stamps on irticles, and 5s. each on the ‘ollowing:— 1) Declaration of compliance. (2) List of persons who have consented to be Directors. /3) Directors’ consent to act. 25 .. -y ve .o Exceeding 25 but not exceeding 50 “s . Exceeding 50 but not _-ceeding 75 ve <xceeding 75 bul ceeding 100 Every 50 adait! TInlimited In addition to the documents mentioned the following, if not filed on registration, must be filed prior to commencing business; Copy register of Directors, notice of registered office, and prospectus or statement in lieu. Fee 35s. each. Before a company which files a prospectus or statement in lieu \l.6. not a private company) can commence business, it must comply with s. 94 by filing the declaration therein mentioned and obtain the Registrar's certificate. Increase of membership after registration for every fifty additional members, 5s., provided that no greater fee than £20 shall be payable in respect of number of members, taking into account the fee paid on registration. Jo2 111. SECRETARIAL PRACTICE OTHER FEES. Registering a document required to be registered other than the Memorandum of Association or the abstract required to be filed by a Receiver or Manager or the Statement to be rendered by a Liquidator in a Winding up in England or Making a record of any fact by the Act required or authorised to be recorded by the Registrar. IV. TRANSFERS ON SALE OF STOCKS AND SHARES AND OF REGISTERED BONDS AND DEBENTURES (being marketable securities). Except stock of the Bank of England—on the transfer of which the duty is 15s. 64. Consideration. Duty. da. Not exceeding o £5 to fio 0 (10 ,, C5 o {15 ,, . 0 o £20 ,, £25 . © (25 .. {50 15 © £50 ,, 475 I; 0 £75. £100 oo {100 ,, £125 5 0 £125 ,, £150 £ 10 ©O £150 ,, £175 I I5 O £175 ,, £200 2 0 Oo {£200 ,, f225 2 5 O £225 ,, £250 2 I0 ©O £250 ,, £275 2 15 © £275 ,, £300 .. ue - .. 3 0 o And for every additional £50 or part of £50, 10s. As to transfers for nominal consideration, see Inland Revenue circular, p. 390I. Pi: V. REGISTERED MORTGAGES, BONDS, AND DEBENTURES (except a marketable security otherwise specially charged with duty). (a) Principal or only security. Amount Secured. Duty. sd. 3 8 3 6 so 9 LJ EO £200 0 v 3 £250 ,, £300 .. .. ‘i . 7 6 ror everv additional £100 or fractional part of £100. 2s. 64. Not exceeding (10 fio to ‘~5 +25 a. Tor APPENDIL. ®) Collateral security (other than an equitable mortgag. Amount Secured. —~ Every £100 or part thereof V vTT REGISTERING A MORTGAGE OR CHARGE. Not exceeding fz2o00. Fee 10s. Exceeding £200. Fee 20s. SEARER SECURITIES. -* Debentures, 4s. for each £10 or fractional part of £10 secured. If given in substitution for a like security duly stamped, 2s. per £20 or part thereof. [Reduced rates when amount secured is to be paid off within three years (Finance Act, 1911).] Share Warrants. Three times the amount of ad valorem duty which would be chargeable on a transfer deed if consideration were the nominal value of such share or shares or stock. Where the share warrant or stock certificate relates to a company formed or established out of the United Kingdom, stamp duty is 4s. per £Io nominal value, chargeable on first negotiation in United Kingdom. Substituted securities to bearer given for a like security duly stamped. For every £20 or part thereof, 2s. Scrip to bearer, 2a. VIII. Loan CapitaL Duty (s. 8 of Finance Act, 1899). On issue of loan capital not secured by an instrument bearing the mortgage or marketable security duty, ad valorem duty of 2s. 6d. per cent. (X. BiLLs oF EXCHANCE X. CoNTRACT NoT: Exceedint For every XI. LETTER OF . [ftot *— 2,500 u it QI GL wad -cyy 1 “dinr CL oy XII. Scrip CERTIFICATE 3% SECRETARIAL PRACTICE XIII. Proxy oR POWER OF ATTORNEY. ] For one meeting or an adjournment thereof .. For receipt of dividend or interest on stock— One payment only .. hp “ .. [n any other case .. “s .. vs For receipt of money or bill of exchange or promissory note not exceeding £20, or any periodical payment not exceeding annual sum of £10 (not already charged) .. For sale, transfer, or acceptance of Government or Parliamentary stocks or funds where the nominal value of the stocks or funds does not exceed £100 .. us x “uw ..2s. 6d. Any other kind whatsoever .. .. .. 10S. 55. Exemption in the case of a winding up by the Court of a company registered in England, or of a creditors’ voluntary winding up thereof, a power of attorney relating solely to the property of such company or to any proceeding under such winding up [added by the Companies Act, 1929, s. 281]. XIV. RECEIPT. For sums amounting to £2 and upwards .. 2d. Notes. 1. Colonial and Foreign Companies.—All transfers of shares executed in the United Kingdom are liable to Stamp Duty [Wright v. Commissioners of Inland Revenue, 11 Exch. Rep. 48]. 2. Stamping after Execution.—The instrument, unless it is written upon duly stamped material, is to be duly stamped with the proper ad valorem duty before the expiration of thirty days after it is first executed, or after it has been first received in the United Kingdom, in case it is first executed at any place out of the United Kingdom. In view of the risk of loss in transit of a stamped document, the Board of Inland Revenue allow transfers and other documents first executed in this country, and then sent to the Colonies or abroad for completion and return, to be stamped on due proof to the satisfaction of the Board’s Officer that they are presented for stamping within thirty davs of their return to the United Kingdom . 3. Renewal of Bonds, &c.—Where Bonds, Debentures, or other similar Securities maturing at a fixed date are renewed during the currency thereof, the Memorandum or instrument of renewal is chargeable, if under hand only, with the duty of sixpence, or if under seal, with the duty of ten shillings, or with the duty of sixpence for every f1oo of the amount secured. if such duty would not amount to so much as ten shillings. APPENDIX A 383 “ INLAND REVENUE CIRCULARS RELATING TO STAMP DUTIES [NLAND REVENUE, SoMERSET HOUSE, LoNDoN, W.C.2. January, 1927. The Board of Inland Revenue furnish the following information regarding the Stamp Duties with which Secretaries, Registrars and other Officers of Companies are most usually concerned. Secretaries of Companies and others whose office it is to register or enter any instrument chargeable with Stamp Duty are required to see that such instrument is properly stamped before registration or entry. In any case of doubt the Commissioners of Inland Revenue may be asked to adjudicate upon and assess the Duty under the provisions contained in s. 12 of the Stamp Act, 1891, and officers responsible for registering instruments should suggest that applicants have recourse to this step when ever it appears to be in any way desirable. Any person, being the proper officer to enrol, register, or enter in or upon any rolls, books, or records any instrument chargeable with any Duty, who enrols, registers, or enters any such instrument not being duly stamped, is liable to a fine of £10. Persons executing instruments in which all the facts and circumstances affecting their liability to Duty, or the amount of such Duty, are not fully stated, or who, being employed or concerned in the preparation of any instrument, neglect to set forth such facts and circumstances, are liable to a fine of £10. The duties are required to be denoted bv impressed stamps, except in the following cases: — Foreign Bills Agreements under hand (6: Bill of Exchange on demar. Charter Party (6d.) . Fire, Accident, &c., Insuran-Letters of Renunciation (1d Protest of Bill of Exchan— Proxies (1d.) . Receipts (2d.) Adhesive ‘Bill’ stamps must be affixed and cancelled before payment, endorsement or negotiation. ihesive postage stamps may be used. Such stamps must Ye effectively cancelled by the person Airst executing the instrument. Stamps of other countries are not recognised except the stamps of Northern Ireland and the Irish Free State. Instruments executed and stamped in either of these countries are deemed to pe duly stamped in this country provided the amount of the stamp is not less than the amount chargeable on the instrument in this country. *36 SECRETARIAL PRACTICE AcCIDENT INSURANCE PoLicy .. . .e AFFIDAVIT AND STATUTORY DECLARATION .. .. AGREEMENT not otherwise charged with Duty, under hand only or without clause of registration "ve AGREEMENT not otherwise charged with Duty, under Company's seal or with clause of registration .. BirLL oF EXCHANGE (CHEQUE), payable on demand or at sight or on presentation or within three days after date or sight “® "oe “e .s Birr oF ExcHANGE and Promissory NOTE, drawn or expressed to be payable in Great Britain and Northern Ireland— Not exceeding £10 “w ‘e ou ve Exceeding £10 but not exceeding £25 .. ‘a 5 ’s ys £50 -. .. ~o LR ’ £75 ’ a 75 " - 4100 .. . £100, for every f1oo or part oy BiLL oF ExcHANGE, drawn and expressed to be payable out of Great Britain and Northern Ireland and actually paid, endorsed or negotiated in Great Britain and Northern Ireland— Not exceeding £10 » : ® - ‘ou Exceeding £10 but not exceeding £25 .. ‘a £25 ys . £100 .. .. £100, for every £100 or part ' 5 Protest of any Bill of Exchange or Promissory Note— Same Duty as on Bill or Note if not exceeding 1s., in other cases ' a oe . BLL oF LADING of, or for, any goods or merchandise, or effects to be exported or carried coastwise .. o0 o 6 BonDs, DEBENTURES, MORTGAGES AND OTHER SECURITIES. [.—Registered and transferable only by instrument of transfer— Where the amount secured does not exceed £10 .. Exceeds £10 and does not exceed £25 . . {25 {30 .. .. 30 mo. . )0 “0 ‘.s 2 el .s 1250 . .. ;0 vs ,, £300 .. .. 2300, for every £100, and also for any fractional part of £100 of such amount {f given in substitution for a duly stamped security, whether registered or to bearer, for every {100, Or part .. .n a (Maximum duty .. .. £ ss. d. o o 6 Oo 2 6 0 oOo 6 OO I0 OO oO 0 2 oO Oo 3 0 0 6 0 0 9 0 I o 0 T 0 oO 0 2 0 0 3 0 o 6 D oOo 6 IR} n 2° 6 APPENDIX A [I.—Transferable by delivery (Bearer Securities) :— (a) Repayable within not more than one year, for every £10, or part, of amount secured .. (b) Repayable within not more than three years, for every £10, or part, of amount secured. . (c) Repayable at a time exceeding three years, for every £10, or part, of amount secured. . (d) If given in substitution for one duly stamped ander (¢), for every £20, or part .. .s A bearer security given in substitution for a registered security requires the full duty of four shillings for every (10, or part. The term “amount secured’ includes in certain circumstances any bonus or premium convenanted to be paid when the bonds or debentures are redeemed. For instance, a bond for £100 which secures the payment of the £100 with a premium of £5 must be stamped for £105, unless such premium is payable only in consequence of some voluntary act of the Company. This rule applies alike to original and substituted securities. Where Debentures are re-issued under the provisions of 5. 104 of the Companies (Consolidation) Act, 1908,* either by the re-issue of the same Debentures or by the issue of other Debentures in their place, such re-issued Debentures fall to be treated as new Debentures for the purposes of Stamp Duty, and the full ad valorem Duty is payable thereon. Similarly, if Debenture Stock is re-issued, further duty is payable either on the trust deed or by way of Loan Capital Duty. In the case of substituted Securities of any description chargeable with a reduced rate of Duty, the Duty can only be impressed thereon upon presentation at Somerset House, or at the Inland Revenue Office, Edinburgh, of both the original and substituted Securities at a date prior to the expiration of the original Securities. When registered Securities have changed hands, the transfers must be produced for inspection. CAPITAL (SHARE), per £100 or part of £100 nominal .. £1 A stamped statement of the amount which is to form the nominal share capital of any Company to be registered with limited liability under the Companies Acts, 1908-(917,1 is to be delivered to the Registrar of Joint Stock Companies before the Company is registered. In the case of any increase of nominal share capital a statement must be delivered, duly stamped, within 15 days of the resolution of the Company authorising the increase Now - of the Companies Act, 1929. tNow Companies Act, 1929 TR J) SECRETARIAL PRACTICE In the case of other Companies formed or established in Great Britain with limited liability, a statement must be delivered, duly stamped, to the Commissioners of Inland Revenue within one month after the date of the Act, Letters Patent, Order, or other authority constituting the Company. In the case of an authority to increase the nominal share capital, a statement must be delivered, duly stamped, within the like period. CHARTER PARTY .. ‘i Fire INSURANCE PoLicy LETTER OF ALLOTMENT LETTER OF RENUNCIATION (f the nominal amount allotted or renounced is under £3 £ ss. d. oO o 6 oO 0 6 oO o 6 0D O00 I Loan CAPITAL, per £100 or part of £100 “oe .. 0 2 6 (Subject to deduction of 2s. for.each complete £100 which is applied in conversion or a of existing Loan Capital.) A statement of the amount of any Loan Capital proposed to be issued by a Company formed or established in Great Britain is required to be delivered to the Commissioners of Inland Revenue, but duty will not be charged to the extent to which mortgage or marketable security duty has been paid on any trust deed or other instrument securing the loan. Loan Capital includes any funded debt and any capital having the character of borrowed money in whatever form it is issued, but not a bank overdraft or other loan raised for a merely temporary purpose for a period not exceeding 12 months. MARINE INSURANCE Policy. I[.—Where the premium or consideration does not exceed the rate of 2s. 6d. per centum of the sum £ s. d. insured .. a. . .. O0 0 I Where the premium or consideration is expressed to be a sum not exceeding the rate of half-a-crown per cent., and is subject to an increase (whether defined or not in the policy) in the event of the occurrence of a specified contingency, it shall be treated as one not exceeding the rate of half-a-crown per cent. But if, owing to the occurrence of the contingency, the premium or consideration is increased so as to exceed the rate of half-a-crown per cent., the policy or a new policy to be thereupon issued shall be stamped with the additional duty payable and may be so stamped without penalty at any time not exceeding thirty days after the date on which the increased premium or consideration becomes ascertained. APPENDIX A 0. [I.—In any other case:-(@) For or upon any voyage:— Where the sum insured does not exceed £250 .s .e . - ‘ve Where the sum exceeds £250 but does not exceed [500 .. .. ve se Where the sum exceeds £500 but does no’ exceed [750 .s ws .s Where the sum exceeds £750 but does - exceed £1,000 .. .. .. Where the sum exceeds £1,000, for - {500 or fractional part of £500 For time: — Where the insurance is made for any time not exceeding six months a duty equivalent to three times the above amounts. Where the insurance is made for any time exceeding six months but not exceeding twelve months a duty equivalent to six times the above amounts. POWER OF ATTORNEY, PROXY, or other instrument in the nature thereof: — For the sole purpose of appointing or authorising a proxy to vote at any one meeting (including an adjournment thereof) at which votes may be given by proxy, whether the number of persons named in such instrument be one or more - For the receipt of the Dividends or Interest of any Stock: — Where made for the receipt of one payment only In any other case connected with the receipt of Dividends or Interest .. General “a .. .. 'e ‘se “sn An order, request, or direction under hand only from the proprietor of any stocks or shares to any Company or to any officer of any Company or to any banker to pay the dividends or interest arising therefrom to any person therein named is not chargeable with duty. RECEIPT given for or upon payment of £2 or more SCRIP CERTIFICATE, SCRIP, or other similar docume SHARE WARRANT AND STOCK CERTIFICATE TO BE. [ssued under the provisions of the Companies: —three times the ad valorem Duty char: on a Transfer for a consideration equal *. aominal value of the Shares or Stock. issued by colonial and foreign companies, p STATUTORY DECLARATIG™ 390 TRANSFER on sale or operating as a Voluntary Disposition inter vivos of Stock, Shares or Marketable Securities where the amount or value of the consideration for the sale (or, in the case of Voluntary Disposition inter vivos, the value of the property) Ls. d. does not exceed £5 .. a. . .s .. OO I oO Exceeds £5 and does not exceed fI10 .. .. ©0 2 oO “10 £15 .. .. ©0 3 oO 3 ‘20 .. 0 4 O 0 25 oO 5 O 5 £50 .. o 10 © £50 £75 -- 015 0 £75 £100 .. I 0 © £100 £125 .. I 5 O £125 f150 .. I I0 O £150 175 .. I 15 O £175" £200 .. . 2 0 Oo £200 {225 .. .. 2 5 oO £225 [250 .. .. 210 O £250 .. £275 .. eo 2 3 o £275 Wy )s £300 .. .. 3 0 £300, for every £50, and also for any fractional part of £50 of such amount of value o 10 © ‘Marketable Security’ includes the registered Bonds and Debentures, generally, of Companies, Corporations and Public Bodies. SECRETARIAL PRACTICE A transfer of any Stock, Shares or Marketable Security operating as a Voluntary Disposition inter vivos, is chargeable with ad valorem stamp duty at the above rates on the value of the property transferred. No such transfer is duly stamped unless it bears the Adjudication Stamp of the Commissioners of Inland Revenue. Registering Officers should therefore decline to register any transfers inter vivos by way of gift, unless they bear the Adjudication Stamp. An exception may, however, be made where the transfers are stamped with ad valorem duty upon the market value of the Stock or Securities at the date of the instrument, it being open to the Registering Officer to obtain the Adjudication Stamp at any time subsequently, should necessity arise. By s. 42 of the Finance Act, 1920, special provision is made for the case of transfers to a dealer on a Stock Exchange, as therein defined, or his nominee, when the transaction to which the transfer relates has been carried out by the dealer in the ordinary course of his business. Such transfers are sufficiently stamped with Ios. if, in addition to that duty, they bear the special supplementary stamp under the terms of the Section, and should in no sircumstances be registered unless they bear this stamp. APPENDIX A 301 A transfer made in liquidation of a debt or in exchange for other Securities attracts ad valorem Duty. Transfers executed under seal, by way of Mortgage, of any Stock, Shares or Marketable Security, are chargeable, (f the loan be disclosed in the Instrument of Transfer, according to the scale set forth under the head ‘Bonds and Debentures.” If the loan be not disclosed in the Transfer, and the transaction is disclosed by a further instrument, the further instrument, if under hand only, is chargeable with the duty of 6d. or if under seal is chargeable according to the said scale, and in either case the Transfer is chargeable with a duty of 10s. £ s. d. TRANSFER of any other kind .. .. fixedduty o 10 o© Included under this head are: — a) Transfers vesting the property in trustees on the apg property p pointment of a new trustee of a pre-existing trust, or on the retirement of a trustee. b) Transfers for a nominal consideration to a mere nominee of the transferor where no beneficial interest in the property passes. Transfers by way of security for a loan or re-transfe: the original transferor on repayment of a loan. Transfer to a residuary legatee of stock, &c., formipart of the residue divisible under a will. I'ransfers to a beneficiary under a will of a specific lega - of stock, &c. Transfers of stock, &c., forming part of an intestate estate, to the person entitled to it. Transfers to a beneficiary under a settlement, on distribution of the trust funds, of stock, &c., forming the share or part of the share of those funds to which the beneficiary is entitled in accordance with the terms of the settlement. < d) e) f) "oy &; Transfers by executors in discharge, or partial discharge, of a pecuniary legacy are chargeable with ad valorem duty on the amount of the legacy so discharged. In every case of a transfer for a nominal consideration, it will be necessary for the Registering Officer to be furnished with information as to the facts of the transaction. In the case of a transfer falling within category (b) or (c) above, a certificate should be required, setting forth the facts of the transaction, signed by (1) both transferor and transferee, or (2) a member of a Stock Exchange or a solicitor acting 392 SECRETARIAL PRACTICE for one or other of the parties, or (3) an accredited representative of a bank. In the last case, when the bank or its official nominee is a party to the transfer, the certificate may be to the effect that ‘the transfer is excepted from s. 74 of the Finance (1909-10) Act, 1910. Transfers to or from trustees other than those clearly falling within the above categories (a), (d), (¢), (f) and (g) should be required to be adjudicated, unless either they are stamped with ad valorem duty (but with a minimum of 10s.) on the market value of the stock, &c., or they have been certified by a Marking Officer under the arrangement described below. In a large number of cases transfers for a nominal consideration are presented to one of the Board’s Deed Marking Officers before being produced to the Registering Officer for registration. In such cases, if a written explanation of the facts is produced to the Marking Officer and accepted as justifying him in passing the transfer for stamping with 10s., he will mark the explanation with the words ‘Transfer passed for 10s.,” his signature and his office stamp, and return it to the person presenting the transfer in order that it may be available for production to the Registering Officer. The explanation will be required to contain sufficient particulars to identify it with the transfer to which it relates. An official form (No. 19) is provided for use in such cases when desired. Where a transfer for nominal consideration stamped with ros. is produced to a Registering Officer accompanied by a written explanation thus certified by one of their Marking Officers the Board will not hold the Registering Officer liable to any penalty under s. 17 of the Stamp Act, 1891, if he accepts the transfer for registration without questioning the sufficiency of the stamp. The explanation should be retained by the Registering Officer. The explanation and the Marking Officer’s certificate may sometimes be endorsed on the transfer itself, or (exceptionally) the certificate may be given on the transfer without a written explanation, the Marking Officer having been satisfied by other evidence produced to him. In either of these cases the Board will not hold the Registering Officer responsible if he registers the transfer stamped with ros. It should be understood that this certification by a Marking Officer is not equivalent to adjudication, and that it is possible that cases may arise in which the Registering Officer, in consequence of special information in his possession, or for some other good reason, may feel it incumbent upon him to require that the transfer be formally presented for adjudication in accordance with the provisions of s. 12 of the Stamp Act, 1801. APPENDIX A 11 INLAND REVENUE, SOMERSET HOUSE, Lonpon, W.C.2. January, 1950 ADJUDICATION OF STAMP Duty—STAMP ACT, 1891, S. I2. 1. Executed instruments, the adjudication of which is desired, may be presented personally either at the office of the Controller of Stamps (Room 16, New Wing, Somerset House) or at the Stamp Office, Telegraph Street, E.C.2., or at any of the following Provincial Stamping Centres:—Birmingham, 47, Paradise Street; Bradford, 29, Manor Row; Bristol, 26, Baldwin Street; Cardiff, Government Buildings, Westgate Street; Hull, Post Office Buildings; Leeds, 36, Park Row; Liverpool, Government Buildings, Victoria Street; Manchester, 184, Deansgate; Newcastle-on-Tyne, 63, Westgate Road; Nottingham, Queen Street; and Sheffield, 13, East Parade. They may also be forwarded by post, vddressed to: — T CONTROLLER OF STAMPS “udication Brea NLAND REVENUE, Somerset House, London, W.C.< If documents are transmitted through the registered post, postage and registration fees are required to be paid by the applicant. In all cases a plain copy or an accurate and complete abstract in usual conveyancing form must accompany the original instrument. Where a number of transfers of stocks, shares or marketable securities between the same parties are presented for adjudication, it will be sufficient to furnish a copy of one transfer and a list of the others, showing for each the consideration and the number and description of the shares or securities or the amount and description of the stock. 2. Instruments presented for adjudication will be kept with due care but the Commissioners give notice that they do not assume any responsibility with reference to any loss or damage which may be occasioned, either in transit or during detention. Original instruments will be returned after the adjudication has heen completed. Copies and abstracts will not be returned. 3904 SECRETARIAL PRACTICE 3. With a view to the avoidance of the delay which must be caused by requisitions for further information, full and sufficient information to enable an assessment to be made should be furnished in the first instance, when the instrument is presented for adjudication. The nature of the information usually necessary in the case of certain specified classes of instruments is indicated at the end of this Notice. It must, however, be understood that, in requesting this information, no ruling is intended as to how a particular case will be adjudicated. [f there is a particular matter in doubt upon which the opinion of the Commissioners is desired, and which is not apparent on the face of the instrument, special attention should be drawn to it when the instrument is presented for adjudication. 4. When the duty has been assessed, a notice of provisional assessment will be sent to the applicant, who if he agrees the amount should pay the duty in the manner directed by the Notice. The instrument will then be stamped with the duty assessed and with the Adjudication Stamp, and will be returned to the applicant, either personally, at Somerset House in the case of deeds presented there, at the Stamp Office, Telegraph Street, or the appropriate Provincial Office in the case of deeds presented through these Offices, or through the post, as may be arranged. It should be added that, if a remittance is by uncertified cheque, the usual period of clearance must elapse before the instrument zan be stamped. If the Commissioners consider that the instrument is already duly stamped, or is not liable to any duty, they will cause the adjudication stamp to be impressed and will return the instrument to the applicant. 5. If the applicant dissents from the proposed assessment he should submit a statement of his reasons for dissenting, and his view of the basis upon which the instrument should be stamped. He may, if he so desires, have an interview with the Adjudicating Officer by appointment. If dissatisfied with the final assessment, the applicant may, within twenty-one days after the date of the assessment and on payment of duty in conformity therewith appeal against the assessment to the High Court and may for that purpose require the Commissioners to state and sign a case. By Order of the Board, F. A. BARRETT. Secretary. APPENDIX A MWS —-AGREEMENT FOR SALE. Where it is claimed that any part of the subject matter of the Agreement is exempt from ad valorem duty as falling within one or other of the exceptions contained in s. 59 f the Stamp Act, 1891 (i.e. as being a legal estate or interest in lands, tenements, hereditaments or heritages, or as being property locally situate out of the United Kingdom, or goods, wares or merchandise, or stock, or marketable securities, or any ship or vessel, or part interest, share, or property of or in any ship or vessel). Where the purchaser takes over or indemnifies the Vendor against debts and liabilities. Furnish an apportionment of the consideration, giving separate values of the property soming within each of the heads n respect of which exemption s claimed. Where a Balance Sheet or Valuation is in exis--ence, which shows the value of he several items or any of ‘hem to be as stated, this should accompany the Abstract. The amount of these should be stated, and included in the apportionment. NoTE.—The value of all fixed plant and tenant's or trade fixtures should be separately stated from those articles which were. at the date of sale, in an actual state of severance. [J - CONVEYANCE ON SALE Where the property is so: subject to a mortgage. State the amount owing for principal (and interest, if any, if the purchaser undertakes payment thereof) at the date >f the Conveyance. State the amount thereof. Generally, if property is sola subject to, or in consideration of, the taking over or release of anv debt or necuniarv lak" [II.— CONVEYANCE OR TRANSFER (INCLUDING SZ. LEMENT, DF “LARATION « TRUST, &C.} OPERATING AS A 1ISPOSITION inter vivos JOLUI TAK Where the subject matte. and. Furnish a full description of the property. The question of value will be referred to the Valuation Office. 390 SECRETARIAL PRACTICE Where the subject matter is stocks, shares or marketable securities. Furnish a valuation as indicated below under the heading ‘Settlement.” With a voluntary settlement, produce duly stamped transfers of any securities transferable by deed subject to stamp duty executed by the settlor in favour of the trustees. Where the securities have been vested in the trustees otherwise than by lirect transfer from the settlor particulars should be given. Furnish details and reasonable evidence of value, and give the ages of the parties concerned where the subject matter is a reversion or a life interest. - Where the subject matter is property of any other description, e.g. reversions, life policies, furniture. IV.—CoONVEYANCE OR TRANSFER ON ANY OCCASION EXCEPT SALE, MORTGAGE OR VOLUNTARY DISPOSITION If the Conveyance or Trans- Produce the Deed of Apfer is made on the occasion of pointment. the appointment of a New Trustee of an existing Trust. If the Conveyance or Transfer is made for effectuating a settlement. V.—INSTRUMENT OF DISSOLUTION OF PARTNERSHIP, WHETHER AGREEMENT OR CONVEYANCE In all cases. Produce a copy of the Balance Sheet or statement of account between the partners. showing— (a) The amount of the liabilities (separating mortgages from current trade liabilities) ; The liquid assets (stockin-trade, cash and book debts); and (If the fact is not disclosed by the instrument) the share of the outgoing partner in the partnership assets. 2) APPENDIX A - VI.—MORTGAGE, &cC. NoTE.—A security for advances without limit cannot be adjudicated. Where a Trust Deed secures Produce the Debentures expayment of Debentures. ecuted and duly stamped. Where it is claimed that col- Produce the principal or lateral, auxiliary, additional or primary security, or other evisubstituted security duty only dence that it is stamped with is payable. full duty. VII.—TRANSFER OF MORTGAGE If the transfer is made on the Produce the Deed of Ap occasion of the appointment of pointment. a New Trustee of an existing Trust. Tn all casc.. State the amount of interest in arrear (if any) at the date of transfer. VIII.—SETTLEMENT JI NOT WITHIN HEADING III) Where Stocks 2nd Securities are settled, whether ‘n possession or reversion, and whether the interest settled ic con Hingent or vested. Furnish particulars of the Stocks and Securities if not specified in the Settlement and in any case produce a statement of the value of each of the several items as at date of Settlement— a) From prices quoted in any authorised Stock anc Share List: or Where there is no quotation, based on the average of the latest private transactions, which can generally be obtained from the Secretary of the Company. In addition to the above particulars of the investments of the fund at the date of Settlement, state the settlor’s interest therein. Where a share only in a reversionary interest in a Trust fund is settled 308 SECRETARIAL PRACTICE Where a Settlor covenants to settle other property which he may then have, but which is not specifically mentioned. State whether the settlor was at the date of the Settlement entitled in possession or reversion, or in default of the axercise of a power of appointment, to any money, stocks or shares not specified in the deed, and give as above particulars and value of such property. Where the settled fund comprises a policy of life insurance (a) If the Settlement (or any other instrument) contains provision for keeping the policy on foot. If there is no such provision. (a) State the amount of any bonuses added. Produce a certificate of the surrender value from the Insurance Company. Note.—Particulars of the value of unsold landed property brought into Settlement, whether subject to a trust for sale or not. need not be furnished. SPECIAL EXEMPTIONS J Where it is claimed that an instrument is not chargeable with duty by reason of an exemption not arising under any Revenue Act. State the section of the Act conferring the exemption, and give an explanation of the grounds for claiming that the instrument falls within it. PPENDIX B DOCUMENTS TO BE DELIVERED TO THE REGISTRAR OF COMPANIES NDER THE COMPANIES ACT, 1929. Section. Nature of Return. When to be filed. 5& 22 Office copy of Order of the Within 15 days from Court confirming an al- date of order. teration of memorandum of association. Articles of Association, if Company is limited by guarantee or unlimitec Particulars of increase ox members or of share capital. \lemorandum tion. ’rospectus or statement in lieu of prospectus where company by alteration of Articles ceases to be a Private Company. copy of prospectus signed). Statement in lieu of prospectus in certain cases. Return as to allotments and contract when shares allotted for consideration other than cash. Particulars of consolidation of share capital, conversion of shares into stock, reconversion of stock into shares, subdivision of shares, redemption of preference shares or cancellation of shares. _opy of Order of Court and of minute as to reduction of capital. “opy of Order of Court as to Within 15 days after variation of special rights. making of Order On application for registration. Within 14 days after alteration. Wil 100 SECRETARIAL PRACTICE Section. Nature of Return. When to be filed. 79-83 Registration of mortgages Within 21 days after and charges. creation or acquisition. Registration of enforcement Within 7 days from of security. date of order or appointment. Ceasing to act as receiver or On so ceasing. manager. Situation and changes of Within 28 days of registered office. incorporation or of change. Statutory declaration as to Prior to commencing shares held for cash and business or exerdirectors’ holdings. cising borrowing powers. Statement in lieu of pros- Ditto. pectus (duly signed). Situation, change of situa- Within 14 days of tion or discontinuance of opening of office dominion register. or change or discontinuance. Within 28 days after the first or only general meeting in the year. Presumably within 28 days after the first or only general meeting in the year. Certificate as to invitations With the annual reto public if a private com- turn. pany. Copy of statutory report. 7 days before meeting. Copy of special or extraordi- Within 15 days. nary resolution, etc. Consent and undertaking by Before appointment. director. List of persons who have consented to be directors. Names, addresses, nationality and occupations of directors or managers and anv changes therein. 1c8 & 110 Annual return of members and summary (including certified copy of balance sheet, &c.). Annual return as to directors if no share capital and statement of indebtedness in respect of mortgages. APPENDIX B 40] Section. Nature of Return. When to be filed. Copy of Order of Court sanc- Before compromise tioning compromise with can take effect. creditors and members. Ditto relating to amalgamations, &c. Copy of winding-up order. Notification of appointment of liquidators (other than the Official Receiver) by the Court. Notification of Order for dissolution. Declaration of solvency in members’ voluntary winding-un 154 Within 7 days after making of Order. Forthwith. Before he can act. 176 (86 Within 14 days of date of Order. Before date on which notices of meeting to pass windingup resolution are sent out. 236 & 245 As to holding final meeting. Within one week after meeting. 236 & 245 Copy of Order of Court de- Within 7 days after ferring date of dissolution. making of Order. Notice by liquidator of his Within 21 days. appointment. Statement by liquidator of proceedings in and position of liquidation. Copy of Order of Court declaring dissolution void. Accounts of receivers and managers. Within 7 days after making of Order. Half - yearly and within one month after ceasing to act. Before registration. 323 & 324 List of members or directors, copy of instrument constituting and statement when company not formed under the Act is registered under the Act. Companies incorporated outside Great Britain to deliver copy of charter, &c. Jitto alteration in charter, Within 1 month from establishment of place - business. Witl "prescribed mn ceelalic -_ _u balance sheet. . > ceasing to have place of business in Great Britain Section. 39 10 4 43 Wi | 1 16 APPENDIX C PENALTIES UNDER THE COMPANIES ACT, 1929 Failure to deliver to Registrar copy of Order £10 a day. The company, of Court as to alteration of memorandum. Failure to notify increase of members to £5 a day. Registrar where company has no share capital. Failure to change name containing words ‘Chamber of Commerce’ on revocation of licence. Failure to supply on request, and on payment (if any), copy of memorandum and of articles (if any) and of any Act altering memorandum. Failure to revise copies of memorandum after alteration. Failure to deliver to Registrar prospectus or statement in lieu of prospectus where company by alteration of articles ceases to be a private company. Zarrying on business for more than six months with less than statutory number of members. Failure to deliver prospectus to Registrar before issue. The company and officers. The company. The company and officers. The company and officers. The company and officers. Every member cognisant of the facts. {5 a day until delivered. The company and persons knowingly party to issue of prospectus. Any person. [ssuing application form without proper £500. Drosnectus. Offence. \llotment before minimum subscription received. Maximum Penalty. epayment of application money with interest. 100. Persons Liable. The directors. Allotment before delivery of statement in lieu of prospectus in certain cases. Allotment in contravention of s. 3g or s. 40. The company and directors. "iability to compen sate the company and allottee of allot ment avoided with in one month. £50 a dav. The directors. Failure to deliver return of allotments, etc. Directors, managers, secretary and other officers. The company and officers. Failure to deliver statement in prescribed form as to commissions. . Failure to state commissions and discounts in balance sheet. Providing financial assistance for purchase of the company’s shares. Failure to include in balance sheet statement as to redeemable preference shares. Failure to state particulars of discount allowed on issue of shares in prospectus and balance sheet. Failure to give notice of consolidation, division, conversion, redemption or cancellation of shares, or of re-conversion of stock. fre, {race The company and officers. The company and officers £100. £IcH, £5 a dav The company and officers. The company and officers. £5 a day. The company and officers. 0 o ® = T J av , Section. 32 34 30 A 2a Section. 81 83 R6 38 39 4 4 Ln) Offence. Maximum Penalty. Failure to notify increase of capital to £5 a day. Registrar. Failure to show in accounts particulars as to £50. payment of interest out of capital. Soncealing name of a creditor or misrepre- Prosecution for missenting his interests or aiding or abetting demeanor. any such concealment or misrepresentation. vailure to forward Order of Court as to £5 a day. variation of special rights. Failure to send to transferee notice of refusal £5 a day. to register transfer of shares, &c. ~ailure to issue certificates for shares, &c., £5 a day. within 2 months after registration of allotment or transfer. Personation of shareholder, &c. Penal servitude for 3 years—life. in Scotland forging or altering or uttering, Penal servitude for &c., share warrant. 3 years—life. As to engraving document purporting to be Penal servitude for share warrant, &c., in Scotland. 3~—14 years. Refusing inspection and copies of debenture £5 and £2 a day. register and trust deed. Failure to register mortgages and charges £50 a day. created. Persons Liable. 2 The company and officers. ® The companv and officers. Directors, managers, secretary nr officers. The company and officers. i The company, directors, managers, secretary and officers. The company, directors, managers, secretary and officers. Any person. Any person. The company and officers. The company, directors, managers, secretary and any person. Offence. Maximum Penalty. Failure to register mortgages and charges £50 a day. existing on property acquired. Delivery of debenture not endorsed with {1o00. certificate of registration. Persons Liable. The company and officers. Any person knowingly and wilfully authorising or permitting. Anv person in default Failure to register appointment of receiver £5 a day. or manager, or to give Registrar notice on ceasing to act as receiver or manager. “ailure to make entry in register of mort- £50. Directors, managers and gages. officers. Refusing inspection of register of mortgages £s5and £2 adav Any officer refusing inspection, and copies of instruments. directors and managers. a These offences in England are dealt with by the Forgery Act, 1913. Failure to notify to Registrar situation and [5 a day. The company and officers. change of registered office. ‘ailure to paint or affix name or to keep £5 and £5 a day The company and officers. name painted or affixed. respectively. sing seal or issuing documents without £50 and liability to The company, directors, mananame of company. holders. gers, officers and any person. -ommencing business or exercising borrow- {£50 a day. Every person responsible for ing powers without obtaining minimum contravention. subscription, and failure to file statutory declaration as to shares held for cash and lirectors’ holdings, and statement in lieu of prospectus. Failure to make statutory entries in register of members. The company and officers. 5 Section. 96 a8 Offence. Failure to keep proper index of members. Refusal to allow inspection or give copy of register of members. Failure to notify Registrar of situation, change in situation or discontinuance of dominion register. Failure to transmit to registered office copy of entries in dominion register and to keep duplicate of dominion register. Failure to make annual return of members and summary or, if no share capital, annual return as to directors, etc. Failure to hold annual general meeting. [02 {O04 108110 112 [T° Failure to hold statutory meeting and to circulate and deliver to Registrar statutory report. Failure to convene meeting on requisition. Failure to send copy of special or extraordinary resolution, &c., to Registrar. failure to embody special resolution, &c., in articles and to supply to members when required Offence. Failure to allow inspection or give copies of minutes of general meetings to members. Failure to keep proper books of account or otherwise to comply with section. Failure to lay before annual general meeting profit and loss account and balance sheet and directors’ report. issuing balance sheet not properly signed or not having auditor’s report attached. Failure to circulate balance sheet. Failure to furnish on demand balance sheet to members. failure to furnish within 7 days of request balance sheet: to members of private company. Banking and insurance cos., and deposit, provident and benefit societies failure to make statement (7th Schedule) before commencing business and half-yearly, or refusal to furnish same to members. 133, 278 Body corporate acting as auditor, liquidator & 306 or receiver under appointment made after 2nd August, 1928. :35 & 137 Failure to produce books and documents and answer questions in investigation. Fr 20) Maximum Penalty [5a day. (2 and £2 a day Persons Liable. The company and officers. The company and officers. c 3 £5 a day. The company and officers. £5 adav The company and officers. n 4 £5 a dav The company and officers. + The company, directors and managers. Directors. Directors. Liability to reimburse requisitionists costs of convening meeting. Le a ury. a copv I. C - The company and officers (including the liquidator) Ditto. Maximum Penalty. Persons Liable. {2 and {2 a dav The companv and officers Imprisonment for 6 Directors. months or £200. Imprisonment for 6 months or £200 £50. The company, directors, managers, secretary and officers. The company and officers. The company, directors, managers, secretary and officers. The company and officers. £20. £5 a day £5 a dav. p— [5 a dav [he company, directors and TMANa3ICcers £100 The bodv corporate Punishment as for contempt of court. Officers and agents. a J Section. Offence. 140 Delivering false list of consents to act as director. 41 Acting as director after failure to obtain qualification within 2 months or shorter time if specified or after ceasing to hold qualification. Undischarged bankrupt acting as director, Imprisonment for 2 &c., without leave of Court. years or for 6 months and/or £500. Failure to keep register of directors and send £5 a day. copy or notify changes to Registrar. tailure to state particulars as to directors in £5. trade catalogues, &c. = oh Failure to add to director’s proposal a state- £100 and damages (if ment that his liability is unlimited. any). Failure to notify the fact of his unlimited £100 and damages (if Liability to any director or manager ap- any). pointed on that condition. Failure after demand to furnish to members £50. statement as to remuneration of directors. Failure by director to disclose interest in £100 contracts, Failure to include in notice of offer made for shares particulars of compensation to directors for loss of office. railure to annex to memorandum copy of Order of Court sanctioning compromise with creditors and members Section. Offence. 154 Failure todeliver copy of Order of Court relating to amalgamations, &c., to Registrar. 81 Failure after winding-up order to submit statement of affairs and affidavit to Official Receiver. 181 & 284 Untruthfully stating oneself to be a creditor or contributory. 104 Liquidator retaining sum in excess of amount authorised. Maximum Penalty. {5 a day. [10 a day. : Punishment for contempt of court. nterest at zo 9, per annum on excess and expenses, dis: allowance of remu neration, remova from office. Fraudulent person without leave of Court mprisonment for 2 acting as director. years and/or £500. 221, 236 Failure to report dissolution to Registrar. £5 a day. & 245 226 Failure to advertise in Gazette resolution for £5 a day. voluntary winding-up. 235 & 244 Failure in voluntary winding-up to call fio. annual general meeting. 136 & 245 Failure to deliver copy of Order of Court [5a dav. deferring date of dissolution. Failure in creditors’ voluntary winding-up to advertise and hold meeting of creditors, or to lay statement, &c., before meeting or to appoint chairman or (when so appointed) to attend and preside thereat. ailure to deliver notice of appointment as £5 a day. liquidator. Peysons Liable. The applicant for registration. I Ba Any person. Any person. The company and officers. Directors of the company and, if director is a corporation, then directors, secretary and officers of the corporation. Directors, managers and proposers. Promoters, directors, managers and secretary. Directors. Directors. 3 ; yp - Directors and any person required to include the particulars, [he company and officers. Persons Liable. The company and officers. Anv person in default. Any person. [iguidator. I=Any person. Liquidator. The company and officers (including liquidator). Liquidator. The person on whose application Order was made. The company, directors and officera Liquidator. Section. 171 Offence. Various offences relating to the property of a company in liquidation, Maximum Penalty. Persons Liable. Penal servitude for 5 Any past or present director years. (as defined by the section), J manager or officer. Penal servitude for 7 Any person. years. Knowingly taking in pawn or pledge or receiving property of a company in liquidation obtained on credit. falsification of books. ro Imprisonment for 2 Directors, managers, officers, years with hard contributories, labour. ‘nprisonment for 2 Directors, managers and years. officers. ‘mprisonment for 1 Directors, managers and year. officers. Liability for debts Directors (as defined by the and imprisonment section). for 1 year, and disqualification as director for 5 years. {mprisonment for 2 years. {20., n 273 Frauds by officers of company in liquidation. Failure to have kept proper books of account. Fraudulent trading. 274 275 Acting as a director after disqualification under the section. 280 & 308 Failure to state on invoices, &c., that company being wound up or receiver or manager appointed. The company, directors, managers, secretary, officers, liquidators, and receiver or manager. Any person. Liquidator § Contravening rules of Board of Trade relat- £100. ing to books of dissolved company. Failure to send to Registrar statement of {50a c--proceedings in liquidation at prescribed intervals. “ailure to allow inspection, &c. £50 a dav. Liquidator. Section. 294 Offence. Failure to deliver copy of order of Court declaring dissolution void. Failure to deliver accounts with Registrar. Failure by company incorporated outside Great Britain to comply with any provision of Part XI of the Act. Unlawfully offering shares of foreign com- £500. panies for sale, &c. Offering shares from house to house. Imprisonment for 6 months and/or £2zo¢ (2nd offence 12 months and /or £500). Ditto. Maximum Penalty £5 a day. Persons Liable. The person on whose application Order was made. Receiver or manager. The company, officers. and agents. 310 351 354 Any person. 356 Any person. fd < T Offering shares unaccompanied by specified particulars. 362 (@) Making false statements in returns, &c. Ditto. = x, — In England or Scotland imprisonment for 4 months with hard labour and/ or £100 (in Scotland imprisonment for 2 years with hard labour). 364 Improper use of the word ‘Limited.’ £5 a dav. (a) In England this penalty can be enforced under the Perjury Act, 1911. Any person. Any person APPENDIX D 3. That the non-forfeiture of dividends is secured; 4. That the common form of transfer shall be used; 5. That all forms of Certificate for Shares, Stock, Debenture Stock, or representing any other form of security (other than Letters of Allotment or Scrip Certificates) shall be issued under the Common Seal of the Company, and shall bear the autographic signatures of one or more Directors and the Secretary; 5. That fully-paid Shares shall be free from all lien; 7. That a Director shall not vote on any contract in which he is interested and if he do so vote, his vote shall not be counted: That the Directors shall have power at any time and from time to time to appoint any other person as a Director either to fill a casual vacancy or as an addition to the Board, but so that the total number of Directors shall not at any time exceed the maximum number fixed; but that any Director so appointed shall hold office only until the next following Ordinary General Meeting of the Company, and shall then be eligible for re-election; That the Company in General Meeting shall have power by Extraordinary Resolution to remove anv Director before the expiration of his period of office; That a printed copy of the Report, accompanied by the Balance Sheet (including every document required by law to be annexed thereto) and Profit and Loss Account or [Income and Expenditure Account, shall, at least seven days previous to the General Meeting, be delivered or sent by post to the registered address of every member, and that three copies of each of these documents shall at the same time be forwarded to the Secretary of the Share and Loan Department, The Stock Exchange, London; 11. That any amount paid up in advance of calls on any share shall carry interest only and shall not be entitled to any portion of a dividend subsequently declared; That where a Company takes power to refuse to register more than three holders of.a share such power shall not apply to the Executors or Trustees of a deceased holder; 13. That the charge for a new Share Certificate issued to replace one that has been worn out, lost or destroyed shall not exceed one shilling. NoTe.—Although not included in the official list of requirements, the Articles should also contain the follow*~~ ~~:-"isions. Power to increase the capital musi oe vestil To in General Meeting; If Articles give Directors power to refuse transfers tne power must be limited to partly-paid shares SECRETARIAL PRACTICE Trust Deeds Trust Deeds should contain the following provisions: 1. Where provision is made that the security shall be repayable at a premium, either at a fixed date or at any time upon notice having been given, the Trust Deed must further provide that should the Company go into voluntary liquidation for the purpose of amalgamation or reconstruction the security shall not be repayable at a lower price. The following clause should be inserted in all Deeds: ‘The statutory power of appointing new Trustees hereof shall be vested in the Company, but a Trustee so appointed must in the first place be approved of by a Resolution of the Debenture (or Debenture Stock) holders passed in the manner specified in the Schedule hereto. A Corporation or Company may be appointed a Trustee of these presents.’ 3 In the clause regulating the convening of meetings of the Debenture (or Debenture Stock) holders, the following words should be inserted: ‘and the Trustee or Trustees shall do so upon a requisition in writing signed by holders of at least one-tenth of the nominal amount of Debentures ‘or Debenture Stock) for the time being outstanding.’ The clause defining an ‘Extraordinary Resolution’ must provide that ‘the expression ‘‘ Extraordinary Resolution” means a resolution passed at a meeting of the Debenture (or Debenture Stock) holders duly convened, and held at which a clear majority in value of the whole of the Debenture (or Debenture Stock) holders is present in person or by proxy and carried by a majority consisting of not less than three-fourths of the persons voting thereat upon a show of hands, and if a poll is demanded then by a majority consisting of not less than three-fourths in value of the votes given on such poll.” (See Note II below.) Should Debentures or Debenture Stock be entitled ‘First Mortgage,” provision must be made for the creation of a specific first mortgage in favour of the Debenture or Debenture Stockholders. . 4. 5 Note I.—Although not included in the official list of requirements, the Trust Deed should also contain the following provisions: The charge for a Stock Certificate issued to replace one worn out, &c., must not exceed Is. Where Stock is partly repaid new Certificates must be issued. It is not sufficient to stamp the old Certificate. Stock should be transferable in multiples of f1. Note I1I.—If preferred the following clause may be substituted for No. 4: APPENDIX D 415 The expression ‘Extraordinary Resolution’ when used in this Schedule, means a resolution passed at a meeting of the Stockholders, duly convened and held in accordance with the provisions herein contained, by a majority consisting of not less than threefourths of the persons voting thereat, upon a show of hands, or if a poll be duly demanded, then by a like majority in value at the poll. The quorum of any such meeting shall be a clear majority in value of the whole of the Stockholders, but so that where a meeting for the purpose of passing an Extraordinary Resolution is convened, then and in such case, if within one hour from the time appointed for the meeting holders of a clear majority in value of the Stock are not present so as to form a quorum, the meeting shall stand adjourned for 21 days, and shall accordingly be held on the corresponding day of the week, and at the same time and place as that originally fixed by the notice convening the meeting, and notice of such adjourned meeting shall be given in the manner provided by Clause — of the foregoing indenture, and such notice shall state that those Debenture Stock holders who are present shall form a quorum, and if at such adjourned meeting a quorum us above defined is not present, then those Debenture Stock holders who are present shall be a quorum and may transact the business for which the meeting was originally convened, and a resolution passed thereat by a majority consisting of not less than three-fourths of the persons voting thereat upon a show of hands, or if a poll is duly demanded, then by a majority consisting of not less than three-fourths of the votes given on such poll, shall be considered as an Extraordinary Resolution within the meaning of this Schedule. Share and Stock Certificates All Certificates should state on their face the authority under which the Company is constituted and the amount of the authorised Capital of the Company. The method of Signature must be in accordance with the Articles of Association. All Certificates should bear a footnote to the effect that no Transfer of any portion of the holding can be registered without the production of the Certificate. Where the Capital of a Company consists of more than one class of Shares of the same denomination, the distinctive numbers of the Shares of each class must be printed on the face of the Share Certificates. All Preference Share Certificates should bear on their face a statement of the Company’s Capital and the conditions, both as to capital and dividends, under which the Shares are issued. Debentures and Debenture Stock Certificates should, in addition to legal requirements, state on their face the authority under which the Company is constituted, the nominal Capital of the Company, the dates when the interest on the Debentures or Debenture Stock ts payable, and the authority under which the issue is made (z.e. Articles of Association and Resolutions); and on their back the conditions of issue redemption and transfer. - 9 SECRETARIAL PRACTICE Bonds Bonds must specify the amount and conditions of the loan and the powers under which it has been contracted. Bonds and Debentures of English Companies must be under the Common Seal of the Company and must bear the requisite autographic signatures. Where an issue of Dominion, Colonial or Foreign Bonds or Debentures is made wholly or partly in London, those issued in London must bear the autographic counter-signature of the London Agents or Contractors. Scrip In cases where a Government, Municipality Corporation or Company has sold an issue of Stock, Shares or Securities which is subsequently offered for public subscription by the purchaser evidence must be produced that the purchasing House has received due authority to issue the Scrip on account of the Government, Municipality Corporation or Company, or in the alternative such Scrip must be enfaced ‘ Contractors’ Scrip.’ LIST OF DOCUMENTS TO BE SUPPLIED NEW COMPANIES Before the application form can be issued for signature there must be supplied through the broker of the Company: A Copy of the Prospectus. Two Copies of the Articles of Association. In the case of Debentures or Debenture Stock the Trust Deed ‘where possible before execution]. After the application form has been signed there must also be supplied in the case of: SHARES The Certificate of Incorporation, and the Certificate that the Company is entitled to commence business. Two Certified copies of the Prospectus, endorsed with the date when first advertised. Two Certified copies of the Memorandum and Articles of Association. The original Letters of Application. The Allotment Book containing a list of Applicants, the number applied for by each, and the result of each Application, with a Summary signed by the Chairman and Secretary. Should the allotment have taken place six months or more before the date of the application, a certified list of present shareholders will also be required. A copy of the Letter of Allotment and the date when posted. A specimen of the Share Certificates. Authenticated copies of all Concessions and similar documents, with notarially certified printed translations. and certified printed copies of all Contracts and Agreements. APPENDIX D 477 A Statutory Declaration by the Chairman and Secretary, -tat’ng the following particulars :— r. That the Prospectus complies with the provisions of the Companies Act, 1929. That all documents required by the Companies Act, 1929, have been duly filed with the Registrar of Joint Stock Companies, and the dates of filing. 3. The number of Shares applied for by the public. +. The number of Shares allotted unconditionally to the public (Nos. to ), and the amount per Share paid thereon in cash. The total number of Allottees and the largest number of Shares (a) applied for by, and (b) allotted to, any one applicant. The number of Shares allotted for a consideration other than cash (being Nos. a 1. 7. That the Share Certificates have been or are ready to be issued. 8. That the purchase of the property has been completed, and the purchase-money paid. After the application form has been signed there must be supplied in the case of: 5. DEBENTURES AND DEBENTURE STOCK The Certificate of Incorporation, or Act of Parliament, and the Certificate that the Company is entitled to commence business. A Certified printed copy of the Mortgage Deed or other similar Document, and the Official Certificate of the Registration of the Mortgage or Charge. Certified copies of the Articles of Association, Resolutions, or other authority for the present issue. Two Certified copies of the Prospectus. The original Letters of Application. The Allotment Book containing a list of applicants, the amount applied for by each, and the result of each application, with a summary of the whole, signed by the Chairman and Secretary. Should the allotment have taken place at an interval of six months or more before the date of the application, a Certified List of present Stockholders will also be required. A copy of the Allotment Letter, and the date when postea. A Specimen of the Debentures or Debenture Stock Certificatand of the Scrip where Scrip is issued. A copy of the last published Report and Accounts. A Statutory Declaration by the Chairman and cating: t. That the Prospectus complies with the provisions of the Companies Act, 1929, and that all documents required by that Act have been duly filed with the Registrar of Companies. and the dates of filing “r3 SECRETARIAL PRACTICE 2. In the case of an English Company charging property abroad, that the necessary mortgage has been properly legalised in the country where the property is situated. 3. The amount of Stock applied for by the public. 4. The amount unconditionally allotted to the public (Nos. to }. 5. The amount, viz. £ %, paid thereon in cash. 6. The amount allotted for a consideration other than cash (Nos. to ). 7. The total number of Allottees. 8. The largest amount of Debentures or Debenture Stock (a) applied for by, and (b) allotted to, any one applicant. That the Debentures or Debenture Stock Certificates have been or are ready to be issued. ro. That a Trust Deed has been executed and completed, if such be the case. The effect of such Trust Deed, and the nature of the charge created thereby in favour of the Debenture holders. A Statutory Declaration by the Chairman and Secretary stating: The total amount of the Authorised Capital of the Company and how constituted. 2. The number of Shares allotted unconditionally to the public (Nos. to ), and the amount paid on each Share in cash. 3. The number of Shares taken by Concessionaries, Owners of Property, Contractors or other parties not included in the public allotment (being Nos. to )-That the Share Certificates have been or are ready to be issued. That the purchase of the property has been completed and the purchase-money paid. { FURTHER ISSUES A King’s Printers’ copy of the Act of Parliament authorising, the Resolutions, &c., creating, and the Circular or Prospectus offering, the new issue. If Shares have been issued credited as fully or partly paid. certified printed copies of the Contracts relating thereto. A Copy of the Allotment Letter. A Copy of the Last Report and Accounts. A Specimen of the Share Certificate. The Allotment Book, unless the Allotment is pro rata. A Statutory Declaration by the Secretary stating: — 1. That the Prospectus or Circular complies with the provisions of the Companies Act, 1929; APPENDIX D 410 2. That all documents required by the Companies Act, 1929, have been duly filed with the Registrar of Companies, and the dates of filing; That the Shares (Nos. to ) have been applied for by and unconditionally allotted to the shareholders or the public or sold upon the market, as the case may be; ¢. The amount per Share paid in cash; 5. The total number of Allottees, and the largest number of Shares applied for by and allotted to any one applicant; 5. That the Certificates have been or are ready to be issued; 7. That no impediment exists to the settlement of the account; 8. It must also be stated whether or not the Shares are in all respects identical with those already quoted in the Official List. The statement that Shares are in all respects identical means that: They are of the same nominal value, and that the same amount per Share has been called up. They carry the same rights as to unrestricted transfer, attendance and voting at meetings, and in all other respects. They are entitled to dividend at the same rate and for the same period, so that at the next ensuing distribution the dividend payable on each Share will amount to exactly the same sum. The statement that Stock is in all respects identical means that: — All the Stock is entitled to the same rights as to unrestricted -ransfer, and in all other respects. All the Stock is entitled to dividend at the same rate and for the same period, so that at the next ensuing distribution the lividend payable on each f1oo of the Stock will amount to axactly the same sum. }. OLD COMPANIES. The Certificate of Incorporation, or Act of Parliament, and the Certificate that the Company is entitled to commence business. Authenticated copies of all Concessions and similar documents, with notarially certified printed translations. Certified copies of all Prospectuses, original or otherwise, >ndorsed with the date when first advertised. Two Certified copies of the Memorandum and Articles ol Association. A Specimen of the Share Certificate and of the Allotment Letter. A Certified copy of the present Register of Shareholders. Certified printed copies of Contracts, Agreements, &c., together with copies of all Contracts relating to the issue of Shares credited as fully or partly paid. A Certified copy of the Company’s last published Report and Accounts. 420 SECRETARIAL PRACTICE A short history of the Company, setting forth its origin, progress, dividends, &c., the number of transfers registered during the last twelve months, and the number of Shares represented by such transfers. Statutory Declaration by the Chairman and Secretary, stating the following particulars: 1. That the Prospectus complied with the provisions of the Companies Act, 1929. That all documents required by the Companies Act, 1929, have been duly filed with the Registrar of Companies, and the dates of filing. 3. The number of Shares applied for by the public. +. The number of Shares allotted unconditionally to the public (Nos. to ), and the amount per Share paid thereon in cash. 5. The number of Shares allotted for a consideration other than cash (being Nos. to 3. That the Share Certificates have been or are ready to be issued. 7. That the purchase of the properties has been completed and the purchase-money paid. DOMINION, COLONIAL AND FOREIGN COMPANIES. The Certificate of Incorporation, or Act of Parliament, or other similar document. Two copies of the Statutes or Articles of Association or notarial translations of the same. A Certified List of present Shareholders. A Specimen of the Share Certificate. Copies of all Agreements, Concessions, Deeds, &c., or notarially certified printed translations of the same. A Certified copy of the last published Report and Accounts, or translation of the same. Official evidence of quotation in the country to which they belong, or where the issue has been made. A short history of the establishment and progress of the Company from its incorporation to the present time. including particulars as to the issue of the Capital. A Declaration stating: i. The number of Shares allotted; 2. The amount per Share paid in cash; 3. That the Share Certificates have been or are ready to be issued; 4. That no impediment exists to the settlement of the account. RECONSTRUCTED COMPANIES The Certificate of Incorporation, and the Certificate that the Company is entitled to commence business. A statement of the plan of reconstruction. together with APPENDIX D 244 certified copies of all resolutions passed and Circulars issued in connection with the reconstruction. The Allotment Book, with a Summary signed by the Chairman and Secretary. The Allotment Letter, and the date when posted. A Specimen of the Share Certificate. I'wo Certified copies of the Memorandum and Articles of Association. Certified printed copies of all Contracts, Agreements, &c. Copies of all Contracts relating to the issue of fully or partly paid Shares. A Statutory Declaration by the Chairman and Secretary stating: tr. That all Documents required by the Companies Act, 1929, have been duly filed with the Registrar of Companies, and dates of filing. The Authorised Capital of the Company. The number of Shares to which the Shareholders in the old Company were entitled; the number and distinctive numbers of Shares unconditionally allotted to such Shareholders; and the amount per Share (a) paid thereon in cash, and (b) credited as paid up. The number and distinctive numbers of Shares applied for by and allotted unconditionally to the public, and the amount per Share (a) credited as paid up, and (r) paid thereon in cash. That the Share Certificates have been or are rean issued. ‘no impediment exists to the settlement of the account. LOANS Details of the creation of the Loan, and the authority under which it is issued, including authenticated copies of concessions, &c., with notarially certified translations. The Authority to the Agents or Contractors to receive subscriptions. A Certified copy of the Prospectus. Evidence that all Bonds issued and payable abroad bear the signature of some properly authorised person. A Specimen Bond, together with a Bond duly executed, or Scrip Certificate if issued. Statutory Declaration by the Agents, stating: I. The amount allotted unconditionally to the public. 2. The numbers and denominations of those Bonds which bear the autographic signature of the London Agents or Contractors. 3. That the required amount, been paid thereon in cash. 4. That the Bonds have been or are ready to be issuea. 5. That no impediment exists to the settlement of the account. SECRETARIAL PRACTICE BONDS QUOTED ABROAD Official evidence of quotation in the country to which they belong or where the issue has been made. Notarially certified printed translations of all Prospectuses, and of the Laws creating and authorising the Loan. A Specimen Bond, together with a Bond duly executed. An official certificate setting forth: 1. The authorised and issued amounts of the Loan, and the terms of issue. 2. The distinctive numbers and denominations of the Bonds. 3. Evidence that all Bonds bear the signature of some properly authorised person. REGULATIONS FOR OBTAINING PERMISSION TO DEAL IN NEW ISSUES (Rule 1509) A. The following documents and particulars should be sent to the Secretary of the Share and Loan Department, when application is made for permission to deal: — t. (a) Certificate of Incorporation (in the case of a Company registered abroad notarially certified copy or translation of Certificate of Incorporation and of Bye-Laws), (b) the Cetificate entitling the Company to commence business will also be required for inspection when any of the contracts are voidable unless such Certificate is obtained by a certain date, and (¢) Memorandum and Articles of Association. 2. Copy of Resolutions authorising issue. 3. Certified Copy of Agreement relating to issue of Shares credited as fully-paid and of any other contracts mentioned in prospectus. In the case of an issue for cash, copy of Prospectus, Offer for Sale or Circular of Issue, stating all material conditions relating to the flotation of the Issue, and (in the case of a new Company) to the formation of the Companvy* and if * MateriaL ConpirioNs. These include the following: — The Capital, dividend, voting and other rights conferred by the different classes of shares, 1nd whether or not the shares are fully-paid up, and if not, to what extent they are paid up. The amount of Shares and Debentures or Debenture Stock that have been issued (in the -ase of Debentures or Debenture Stock, giving the rate of interest payable thereon), the dates and prices at which they have been issued, and the amounts of any-underwriting or other sommissions that have been paid in connection therewith. The names and addresses of the Vendors of any property purchased or acquired by the Company or proposed so to be purchased or acquired and the amount payable in cash, shares >r debentures to the Vendor, or any other consideration for the sale, and where there is more than one separate Vendor, or the Company is a sub-purchaser, the amount or consideration s0 payable or granted to each Vendor. The amount or estimated amount of the preliminary expenses. Full particulars of the value and extent of the interest of every Director in the promotion of or the property proposed to be acquired by the Company or in any profit made by any Vendor or Promoter with a statement of the amount paid or agreed to be made to any Director or to his firm or any Company in which he is interested either to qualify him or to induce him to become a Director or otherwise for services rendered by him. The names and parties to every material contract and the place where they can be inspected. The Memorandum and Articles of Association (and Trust Deed if the issue relates to Deben--ures or Debenture Stock) must be open for inspection at the same time and place. Whether any Shares are under option, and if so, at what prices. when such options expire and the consideration (if any) given for such options. Particulars as to aualification and remuneration of Directors APPENDIX D { publicly advertised, copy of newspaper in which the full prospectus was advertised. 5. If issued pro rata to existing Shareholders, undertaking tc split letters of renunciation. Specimen (or advance proof) of Allotment Letter, and, if possible, of Scrip and Definitive Certificates. If the Allotment Letters bear a Form of Renunciation there should be included in No. 7 an undertaking to split Letters of Allotment on request. In order to facilitate the certification of transfers it is suggested that the Allotment Letters should contain the distinctive numbers of the Shares to which they relate. 7. Letter (a) giving distinctive numbers (1) of Shares for which Permission to Deal is being applied for, distinguishing those to be allotted. (c) for cash; (v) to Vendors or others for a consideration other than cash or in exchange for cash; (0) in pursuance of an option. : (2) giving number of Shares unissued or for which Permission to Deal is not applied for, distinguishing those: 'v) allotted to Vendors or others for a consideration other than Cash or in exchange for Cash; (0) under option; 'r) reserved for future issue. undertaking to issue all the Allotment Letters simultaneously and in the event of its being impossible to issue Letters of Regret at the same time an undertaking to insert in the Press a Notice to that effect, so that the Notice shall appear on the morning after the Letters of Allotment have been posted. undertaking to certify transfers against Allotment Letters, and stating (in the case of a further issue) whether or not the Shares are identicalt in all respects with existing Shares. 3. In all cases where power has been taken in the Articles of Association to issue Share Warrants to Bearer, an undertaking from the Company will be required to the effect (1) that in the event of the Company deciding to issue Share Warrants to Bearer, such warrants will be issued in exchange for Registered Shares within 3 weeks of the deposit - A statement that Shares are in all respects identical is understood to mean that {1) They are of the same nominal value, and that the same amount per Share hzs been called up. (2) They carry the same rights as to unrestricted transfer, attendan: meetings, and in all other respects. 3) They are entitled to dividend at the same rate and for the same period, so that wg the next ensuing distribution the dividend payable on each Share will amount to axactly the same sum 12 SECRETARIAL PRACTICE of the Share Certificate for Registered Shares and (2) that the Company will on request certify transfers against the deposit of Share Warrants to Bearer. Approximate date when Definitive Certificates will be ready for issue. In all issues other than Government or Municipal Loans, whether by Prospectus or otherwise, particulars of any underwriting must be disclosed, and copy of underwriting Agreement, and of sub-underwriting letter, if any, must be produced. t1. In case of a Debenture issue, copy or draft of Trust Deed. 12. List of allottees or present holders—name, address and holding (when required). B. In the absence of any Prospectus publicly advertised in this country, or circular to shareholders, the Committee will also require an advertisement in two leading London morning papers, giving all material conditions relating to the formation of the Company* and to the flotation of the Issue, and stating that the Directors collectively and individually are responsible for the information advertised. A copy of each of the newspapers in which the advertisement appears must be supplied. These details must also include official statements as to (1) Date and particulars of Incorporation. (2) The Capital, authorised and issued. ‘3) Borrowing powers and the extent to which they have been exercised. Names and addresses of Directors or any person occupying the position of a Director, Bankers, Auditors, Brokers, and Secretary. Objects of the Company, nature of its business or particulars of property acquired. The dividends, if any, paid on each class of shares during each of the last three financial years, and if no dividend has been paid in respect of shares of any particular class. a statement to that effect. C. Where a broker is instructed to sell on behalf of a Company a further issue of Stock or Shares forming a part of an amount previously created (permission to deal, if necessary, having been given for the original issue) he may obtain permission to deal on presentation of a letter from the Company authorising him to make the sale, or he may sell the Stock or Shares previous to permission being given, provided he makes the sale subiect to the permission being granted. D. In the case of Securities of a purely local nature within Great Britain or Northern Ireland or of a Dominion, Colonial or Foreign issue of which no former Security has been quoted previously on a Dominion, Colonial or Foreign Exchange a Broker mav make a specific bargain with the authority of the APPENDIX D 425 Sub-Committee on New Issues and Official Quotations, but bargains shall not be recorded in the Supplementary List until permission to deal in the issue has been granted by the Committee. E. In the case of Securities quoted on a Dominion, Colonial or Foreign Exchange or in the case of New Issues where a previous issue or issues of the same Country, Corporation or Company have been quoted on a Dominion, Colonial or Foreign Exchange a Member may make a bargain, provided that a Jobber may not make such bargain out of a market in which he acts as a Jobber. Such bargains shall not be recorded in the Supplementary List until permission to deal in the issue has been granted by the Committee. NOTICE Rule 159. Committee Room, The Stock Exchange. IQ Dealings in the following Securities as shown in Column (1) have been allowed by the Committee under Rule 159. In the case of Securities marked with an asterisk dealings will not be permitted until after the issue of Letters of Allotment or Acceptance. ' Permission to deal granted. £ (v Allotted for Cash; Allotted Vendors or others .. consideration other ttn C~-h or in exchange for Cash; Allotted ‘n —-'rsuance ou. an yptior (2) Securities unissued or for which permission to deal has not been applied for. wv) Allotted to Vendors or others for a consideration other than Cash c= un ex change for Cash Under option; 7) Reserved for future issue APPENDIX E SOME NOTES CONCERNING THE POSITION OF COM-PANIES WHOSE SECURITIES ARE DEALT IN IN FRANCE IN THE MATTERS OF TAXATION AND STOCK EXCHANGE REGULATIONS. A. TAXATION Prior to the passing of the Law of 31st July, 1929, it was necessary for a foreign company to enter into an arrangement ‘known as the ABONNEMENT) regarding the payment of taxes before any financial service might be done for it or before its shares (which would be in the form of share warrants to bearer) might be dealt in (except in an unofficial manner) in France. The Law of 31st July, 1929, repealed this requirement; but the French Administration insists that the new provision does not release companies who had already entered into abonnements from their undertaking, which was irrevocable for the whole period of the Company’s existence in the case of shares, and until final redemption in the case of debentures, etc. Notwithstanding the legal irrevocability of their undertaking, companies who were unwilling to continue bearing the burden of taxation to which the abomnement subjected them withdrew themselves from the reach of the taxing authorities by terminating the appointment of their Responsible Representatives. The foreign companies whose shares are dealt in in France thus fall into three categories, namely: Those whose shares are abonné. Those whose shares are désabonné. Those whose shares are non-abonné. 1. ABONNE SHARES. The abonmement is an undertaking to pay certain annual taxes, namely: 1. The Stamp Duty (Droit de Timbre) of Fr. 0.20 per Frs. 100 upon the nominal value of the security, payable in equal quarterly instalments. The rate in the case of abonnements entered into after 31st December. 1920. is Fr. 0.05 per Frs. 100. Note.—When it has been proved to the Fisc that a company’s accounts have shown a debit balance on profit and loss account for three years in succession, the company is entitled to ask for a refund of the stamp duty paid for the third year, and to be allowed to discontinue paying stamp duty for successive years so long as the profit and lacs account continues to show a debit balance. 126A APPENDIX E 4172 J 2. The Transfer Duty (Droit de Transmission) of Fr. o.25 per Frs. 100, based upon the average market price of the security in Paris for the previous year, payable in quarterly instalments. The Income Tax (Impét sur le Revenu) of 16 per cent. on interest or dividends paid. In the case of securities on which the income varies, the tax has to be paid in advance in quarterly instalments, each provisionally calculated on the basis of one-fifth of the previous year’s dividend. Ifitis eventually established that no dividend was paid during the year the sum thus provisionally paid is refunded by the Fisc. If dividends are paid a final settlement is arrived at after the actual dividends for the year are ascertained. In the case of a new company that has not commenced the payment of dividends, the quarterly instalment of one-fifth is calculated on a supposed revenue of 5 per cent. on the security in question. The company is entitled to recover the transfer duty and income tax, by deductions made when paying dividends to its French shareholders. If it does not, the amount of these taxes is regarded as additional dividend, and a supplementary income tax is payable based on the total amount of transfer duty paid for the previous vear and on the income tax. These taxes are payable on the proportion of the capital >stimated by the Fisc to be in circulation in France, the estimate being based on the number of shares registered in the names of persons whose addresses are in France, plus the number of bearer shares estimated to be in France as shown by the cashing of coupons and other indications regarding which the company has to furnish information to the authorities. The assessment is fixed for a period of three years at a time. It is necessary to appoint a French financial institution as Représentant Responsable, and to forward to that institution: ‘a) A declaration of the Company’s intention to circulate in France certain shares; of its undertaking to pay taxes; and of its appointment of the institution named as Représentant Responsable. 'b) A letter indemnifying the Représentant Responsable in respect of the abonnement. These documents are usually drafted by the Représentant Responsable, signed by two directors and by the secretary, and sealed before a notary, the notary’s certificate being legalised by the French consul. A French translation (preferably made by a sworn translator. of the company’s complete articles of association has te be puplished in the Bulletin des Annonces légales obligataives a la charg. des sociélés financiéres. {28 SECRETARIAL PRACTICE There has to be published in the said Bulletin a notice, signed by the persons who purpose introducing the shares to the French market, and who must be domiciled in France. The signatures have to be duly legalised in France. The following particulars are also required to be included: I. Name of the Company. 2. The laws under which the Company carries on its operations 3. The head office. 4. The object of the Company. 5. The length of time for which the Company is constituted. 6. The amount of the capital, with the amount of each class of shares, and the amount not yet called up on the shares. 7. The date when the financial year ends, and a certified copy of the last balance sheet. 8. Full particulars of any debentures. 9. The reason for the publication (e.g. introduction on the French market; procuring the quotation of the securities in. the Official List; etc.). to. The advantages granted to the promoters, directors and all other persons; list of real assets received from the vendors and consideration paid to the vendors for same. 11. Particulars of method of convening general meetings, and place where they are held. In case of absorption or liquidation, the cancellation of the abonnement may be obtained upon its being proved to the satisfaction of the Fisc: (a) In the case of absorption.—That the exchange of the shares of the Company absorbed against those of the absorbing Company is virtually terminated, provided that an abonnement has been taken for the new shares. In case of liguidation.—That the liquidation is completely terminated, and the Company has consequently ceased to exist 2. DESABONNE SHARES. As has already been mentioned, foreign Companies found means of withdrawing themselves from the reach of the taxing authorities notwithstanding the fact that legally they were bound by their abonnement for the whole period of their existence. In other words, it was possible to effect désabonnement de facto but not de jure. The Responsible Representatives of such Companies were liable to the French Treasury until their three months’ notice to withdraw their responsibility had expired; and the Treasury was thus able to collect through them all taxation that was due or eventually became due until such expiry. APPENDIX E 420 Moreover, any sums that were in the hands of the Treasury in respect of provisional payments on account of Income Tax could not be recovered by the Company. ; The French Treasury regards such a Company as a defaulter from whom it has the right (which it has not yet sought to exercise) to recover whatever may be or may become due under the abonnement if any opportunity arises to enforce its claim. The Law of 31st July, 1929, gave a Company the right to terminate its abonmnement; but the Administration claims that this provision applies only to Companies that enter into abonnement after the promulgation of the new Law, Companies that had entered into abonmnement before that date being bound by the perpetual nature of their undertaking. Holders of securities in respect of which the abonnement shall nave been terminated de jure, or even de facto after 31st December, 1929, have the right within a year after such termination to have the securities stamped free of charge in respect of the stamp duty on a share warrant that is not covered by an existing abonnement if the abonnement had been in existence for twenty years, and at half-rate if the abonnement had been in existence for less than twenty years. I'he rate of the stamp, which was 4 per cent. of the nominal value of the security, was reduced to 2 per cent. from 1st January, 1930, and to 1 per cent. by the Law of 26th April, 1930. It appears that the authorities, while denying that this right attaches to securities that are désabonné de facto but not de jure, and reserving all its claims and rights will probably treat désabonné securities as though they had never been abonné. 3. NON-ABONNE SHARES. In respect of securities that have never been abonné the following taxes have to be paid: t. Stamp Duty. At the rate of 1 per cent. payable on the first negotiation or mention in documents, etc. The wording of the Law leaves room for doubt as to whether securities that were issued prior to 1st January, 1930, may not have to be stamped at the rate of 4 per cent. Income Tax. Bankers in France paying or collecting coupons, dividends, etc., have to deduct tax at the rate of 18 per cent. and pay over to or credit the account of -he proprietor with only 82 per cent. INTRODUCTION OF SHARES INTO FRANCE. In order to obtain the admission and quotation of shares in the markets “ad terme’ (which deals in quantities of not less than 25 shares, which may, however, be represented by several warrants of lower denominations than 25 shares) and “au comptant,” it is necessary to make application to the respective “Syndicats” (through the French firm or institution entrusted with the introduction. which firm or institution must undertake ) Lg 430 SECRETARIAL PRACTICE to carry over the shares for a period of at least six months) by means of forms which embody certain undertakings on the part of the Company, among which may be mentioned: (a) To the Syndicat des Banquiers en Valeurs prés la Bourse de Paris. To conform with the usages of the Paris market (including supplying the Syndicat with copies of the proceedings at general meetings and other reports and notices) and, specially to advise the Committee of the Syndicat, at least 8 days before the next subsequent settlement, of all rights of subscriptions, etc., attaching to the shares, and to fix for the deposit of bearer shares to secure rights a period terminating not earlier than the seventh day of the following month. When paying coupons, not to deduct more than one country’s tax. To provide for the renewal of sheets of coupons in Paris, without expense to proprietors. To advise the Committee at once of the numbers of any shares on which a “stop” is placed. To the Syndicat des Banquiers en Valeurs au Comptant. All the above as well as: To furnish the Committee of the Syndicat with two copies of the proceedings of each general meeting; and to advise it of the amount payable in respect of each coupon and the date when such coupon becomes payable; and all other information of interest to shareholders. To replace a defaced warrant on the request of the Committee. To exchange warrants for others of different denominations at a fixed tariff within twenty days. ParQUET. If it is desired to have the shares of a foreign Company quoted on the “ Parquet,” it must be proved that the Company is constituted in conformity with the laws of its own country. The form of application, with all the necessary papers, must be submitted to the French Chancellor of the Exchequer, and quotation is only allowed after he has given his assent. APPENDIX F FORMS Share Certificate for fully paid shares (with receipt form attached) where only one class of shares. Share Certificate for partly paid shares (without receipt form) where only one class of shares. Share Certificate for fully paid shares (with receipt form attached) where more than one class of shares. Mortgage Debenture Stock Certificate (with receipt form attached). Registered Debenture. Fractional Certificate. Declaration and Indemnity for Duplicate Certificate. Application for Bonds or Stock. Application for Shares where no receipt for Application is issued. 10. Application for Shares (with Receipt Form attached). 11. Application and Allotment Sheet. 12. Allotment Letter (with one receipt). 13. Allotment Letter (with Receipts in full). 14. Letter of Allotment and Interim Certificate. t5. Offer of New Shares. { Common Form of Transfer. 1 Notice on Presentation of Transfer with sideration unless adjudicated or endorsed. 17. Balance Receipt. 18. Notice r¢ Lodgment of Transfer for Certification or Registration. 19. Receipt for Transfer. 20. Rubber Stamp on Transfer. 21. Attestation where Deed Executed by Mark. 22. Register of Transfers for Board Meeting. 23. Notice to Party on whose behalf Notice of Restraint has been lodged. Notice to Party who lodged Notice of Restraint. Request by Executors to be placed on Register. Certificate of Identity. 132 . SECRETARIAL PRACTICE Call Letter. Share Register. Reply to Bankers, &c., re Notice of Lien. Index to Share Register. Card Index to Share Register. Indemnity and Request for Duplicate Dividend Warrant. Debenture Stock Notice and Interest Warrant. Dividend Notice and Warrant. Dividend Request. Specimen Signature and Dividend Request. Debenture Stock Redemption Receipt. Letter of Renunciation of Shares (see also Form 15). Letter of Renunciation of Rights. Share Warrant. Receipt for Deposited Share Warrant. Application for Share Warrants. Share Warrant Application Receipt. Receipt for Talons. Receipt for Share Warrants Lodged for Registration. Register for issue of Share Warrants in exchange for Registered Shares. Register for issue of Registered Shares in Exchange for Share Warrants. 48. Share Warrants Register. 49. Application for Registered Shares in Exchange for Share Warrants. 50. Application for Exchange of Share Warrants for other Share Warrants. 12. THR 'A’ COMPANY, LIMITED. PARTICULARS OF SHARES HEREIN REFERRED TO Certificate No... .. Number of Shaves THE <A’ COMPANY, LIMITED. SHARE CERTIFICATE. Name... Address .. No. of Shaves... Distinctive Nos... Posted to... Dale No. 5 yap 3 ol — J No. of ‘hares DISTINCTIVE NUMBERS UU Registered Office: London Wall, London. Incorporated under the Companies Act, 1929. Capital: f in Shares of £ each. THis 1s TO CERTIFY that... 2) ts registered as the holder of... Shares Of .oowssen@Ch, fully paid, numbered as in margin in THE ‘A’ CoMPANY, LIMITED, subject to the Memorandum and Articles of Association of the Company. Given under the Common Seal of the Companr LhLS orion B AY OF ooo, ah Ih vr. - & 3 — Jielar T Oo x <S Z p & = 3 = > | » > » 3 o oO o s =. + \. — } 3 r+ 0D Oo = N J X) —t 0 3 —ry c — D a wn ¥ 2 » a > 8] i = Zz 5 > — iN Ww ats Note.—No transfer of the above shares can oe registered unless accompanied by the relative share certificate. 1 SECRETARIAL PRACTICE FORM No. 1 (continued.) TRANSFERS CERTIFIED OR LODGED. [Endorsement on Shave Certificate] NOTE.—This Endorsement is reserved for the Company’s purposes only, and must ndt be written upon. = < > 2 Ih oF DISTINCTIVE NUMBERS NAME OF No.of = TRANSFEREE Shares FROM TT no £2 0 Q S || 82 zd [A = C= PARTICULARS OF SHARES HEREIN REFERRED TO ‘o,f hare ° NCTIVE NUMBERS Number of Shares Certificate No. THE ‘A’ COMPANY, LIMITED. Incorporated under the Companies Act, 1929 Registered Office: London Wall, London, E.C Capital: £ shares of £ each. This 1s to certify that of is registered as the holder of... shares 7 SO. corn 8ACH mumbered as in margin inthe A’ Company, Limited, subject to the Memorandum and Article Association of the Company, and that theve has been paid up on of the said shares the sum of .... Given under the Common Seal of the Combai. Tl O x > a" = 4 D — nD 0 ND + > Ih] = ol wn => » 3 ® 0 D s + ~~ dD 0 r+ © —ty o t P ) | ¥ 4 —d Nn > = rl x 0 To I ) 3 D = — po n n Oo J = x - Nn > S A pe dav 21 a w w hn rector elay 436 SECRETARIAL PRACTICE FORM No. 2.—Share Certificate (continued). [Endorsement on Shave Certificate) This is to certify that the further SUM Of cores. has been paid on each of the within-mentioned shares making the amount Paid UP POV SRATE....orscrsrssrrerrssrerissrssssn Dated this wise GAY Of eoneeeerviriscrsssessrnssssrssssssessssssmsssseesss TQ Secretary. TRANSFERS CERTIFIED OR LODGED. NOTE—This Endorsement is reserved for the Company’s purposes only, and must not be written upon. at i NAME OF TRANSFEREE No. of | Shares DISTINCTIVE NUMBERS FROM Te 3 , 59 £Z 02 a 28 > Gm TFE 'A’ COMPANY, LIMITED 5% CUMULATIV™® PREFERENCF SHARE CERTIFICAT: Name... Address ...... No. of Shares... Distinctive No. Posted lo. Date No. of trans Xs 'y N - 2 i ~ 2 0% 3 JQ “eis Sa SS A i PARTICULARS OF SHARES HEREIN REFERRED TO No. of hares DISTINCTIVE NUMBERS FROM TO Certificate No THE ¢‘A’ COMPANY LIMITED. Incorporated under the Companies Act, 1929. Number of Prefevence shaves r © a 5 ) Registered Office: London Wall, London. Divided into Ordinary shares of £ each, numbered to inclusive, and Five per cent. Cumulative Preference shares of £ each, numbered to inclusive. SHARE CAPITAL £ ry OQ 9 7. ~t C 0 — »n D 3 ® 0 oD 3 = h w D + © - 2 = o = o —* = @ 3 o hn The Preference shares carry a fixed Cumulative Preferential Dividend at the rate of 5 per cent. per annum and rank as to dividend and capital in priority to the Ordinary shares, but convey no further right to participate in profits or assets. T x 5 = PY) 3 Q D ~ D 0 Eg ® 3 r 3 - THIS 1s TO CERTIFY that. is registered as the holdev of ....oeceovge. Five per cent. CUMULATIVE PREFERENCE SHARES a f crise Pounds each, fully paid up, numbered as > in margin in THE ‘A’ CoMmpPANY, LIMITED, og subject to the Memorandum and Articles of Association of the Company. 2 % 3 o "2 TOY Secretar; Note. —No transfer of the above shares can be registered unless accompanied by the relative share certificate. v) n | ” > d = = * Jot [ Prone Ps Pret - A C 138 SECRETARIAL PRACTICE FORM No. 3.—(continued. TRANSFERS CERTIFIED OR LODGED. [Endorsement on Share Certificate] NOTE.—This Endorsement is reserved for the Company’s purposes only, and must not be written upon. 3 od » 8 TLL my wl hy NAME Of TRANSFEREE No. of Shares DISTINCTIVE NUMBERS FROM TO . So iz 3) 8 Z zd : 0.9 TY Chm () NO. THE ‘A’ COMPANY, LIMITED. 14% MORTGAGE DEBENTURE STOCK CERTIFICATE. NO. oes \N ame dddress Posted to... rt \ J — “tp - — y x “ * a “ THE ‘A’ COMPANY, LIMITED. [ncorporated under the Companies Act, rozg oy ri 2 A mn 0 Le s Z 2p A Registered Office: London Wall, London Divided into ..... wee Yp Cumulative Preference Shares of £. each, and .............. Ordinary Shares of £..... each. . eee 43% FIRST MORTGAGE DEBENTURE STOCK. § Interest payable 1st February and 1st August, 3 Issued under Article........ of the Articles of Association and a Resolution of the Directors dated the ........... dav of This is to Certify that CAPITAL ,, Oo ~ To 2D I. m ng nN oO o oa x is the registered holder of................ Pounds of... ..FIRST MORTGAGE DEBENTURE STOCK, which Stock is constituted by a Trust Deed dated the ...... ..davol .. 19...., and made between the Company of the one part, and . wer Of the other part, and issued subject to the provisions contained in such deed, Given under the Common Seal of the Company this ............ day of » r o 3 3 A -~ 1 ¥ = = Q hd |-4 a ‘2 + 0 2 Re 3 O 4) = =, Direclor. ernenenns SECYELAYY Note.—No transfer of the above stock can be registered unless accompanied bv the relative stock certificate. No fraction of £1 can be transferred . = 4 J i r+ nT + T — [z. Zz o Pes bpd LC Bad n CO [COPY OF REGISTRAR’'S CERTIFICATE.] I hereby Certify that a mortgage or charge by way of Trust Deed dated the... day of... 19..., and created by the ‘A’ Co., Ltd., for securing the sum of £ woo, Was this day registered pursuant to Section 79 of the Companies Act, 1929. Given under mv hand at London this.....dav of in Que Registrar of Companies. n O x < Zz © To ul = I ~~ \ — = > — \ A i’ "NOTE.—Under the’ requirements of the Stock Exchange, Debenture Stock Certificates should, in addition to legal requivements, state on their face the authority under which the Company is constituted, the nominal Capital of the Company, the dates when the interest on the Debentures or Debenture Stock is payable, and the authority under which the issue is made (i.e. Articles of Association and Resolutions); and on their back the conditions of issue, redemp Hon and transfer. p— —~ 2S THE COMPANY, LIMITED. Registered Debenture. Name 4ddress Posted to... ~~ 2 8 =~ ont THE ‘A’ COMPANY LIMITED. incorporated under the Companies Act, 1929. Registered Office; London Wall, London. CAPITAL . Shares of £........ each. ISSUE OF { one ee en PER CENT. REGISTERED DEBENTURES IN DEBENTURES of £ ......, £......and £. ., each carrying Interest at per cent. per annum, payable half-yearly on the day and the day of in each year. Issued pursuant to Article of the Articles of Association of the Company and to a Resolution of the Board of Directors passed on the day of . No. PER CENT. REGISTERED DEBENTURE. £........ . Tre ‘A’ Company, LiMiTED (hereinafter called “the Company’) for value received will pay to... T 5 p--n . - - Z D on or other the registered holder for the time being hereof on the day of nr on such earlier date as the said sum shall become payable in accordance with the conditions endorsed § aereon the principal sum of pounds [together with such premium as shall be payable pursuant to the said conditions] and also will in the meantime until payment of the said principal sum pay to such registered holder interest thereon at the rate of per cent, per annum by equal half-yearly payments on the day of and the : day of in each year, the first payment to be made on the day o ) 2 1 a” 2. The registered holders of the Debentures will be entitled pari passu to the benefit of and will, be subject to the provisions contained in a Trust Deed dated the day of and made between the Company of the one part and - Trusti-s) of the other part. 3. This Debenture is issued subject to and with the benefit of the conditions endorsed which shall be deemed to be incorporated with and to form part of this Debenture. Given under the Common Seal of the Company tt = COMMON SEAL OF THE ‘MV LIMITED, was bh ad in the presence of: " > 28 = E ; x Fo Dale RS ~ ass a 1itions pf ~ aq ~2ne to be endorsed on yo -_ SECRETARIAL PRACTICE FRACTIONAL CERTIFICATE. Tue ‘A’ CompaNY, LIMITED. Registered Office: London Wall, London. FORM No. 6. 2d. Stamp [ssue Of... Shares of £..... each. FRACTIONAL CERTIFICATE No... th Representing ONE... oa of a eee SHARE. I HEREBY CERTIFY that the Bearer of this Certificate, upon presenting the same, together with .......... other similar Certificates, will be entitled to an allotment of One Fully-paid re someeninene wo ONATE Of £.... In the Capital of the above-named Company, subject to the following stipulation: That within three months from the date hereof, this Fractional Certificate, together with similar Certificates, making up one or more whole ............... Shares, shall be lodged at the Company’s Office with the Application Form endorsed on the back hereof duly signed. Dated the. eeeseesrsscersssnennnnn IQ Bv order of the Board, Secretary. Entered... N.B.—This Fractional part of a Share cannot be Registered, nor can it bear any Dividend until exchanged with other Fractional Certificates for an entire Share. APPENDIX F FORM No. 6 (continued). ENDORSEMENT ON FRACTIONAL CERTIFICATE. FORM OF APPLICATION. To THE ‘A’ CoMPANY, LIMITED. As the Bearer of this Fractional Certificate, and the... similar Fractional Certificates attached, I (or we) request the allotment to me (or us) of ............. whole .............. Share(s) of emu, and authorise the Company to place my (or our) name on the Register of Members in respect thereof Signature .. Name in full... AdAYesSane n+ StGecsassvrnvaT BD uve were Ee eS AAI EEE See. BSAA E RARE RTs EPNEIEPONINe BRERA ANE nis Description eens cone Date N.B.—This application is only to be signed by the holder when presenting the Fractional Certificate (with others, making one or more complete Shares) for registration at the Companv'’s Office. Impressed Stamp 216 insert here full Name, ) Address, and Description f of Declarant 1 SECRETARIAL PRACTICE FORM No. 7. DECLARATION AND INDEMNITY FOR DUPLICATE CERTIFICATE, THe ‘A’ ComPANY, LIMITED, Registered Office: London Wall, London. [b, A. B., of oer. AO SOlemnly and sincerely declare that I am the Registered Proprietor of... in the ‘A’ COMPANY, LIMITED, and that the Certificate numbered .... in respect of the said ........ has been mislaid, destroyed or lost; and that I have made, or caused to be made, diligent but unavailing search for the same; and 1 further declare that I have not sold, pledged, or in any other way encumbered or disposed of the said... evens And I make this solemn Declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1835. ... this | 4B. Declared at —— ne Before me, X. Y. x This Declaration must be made and signed either befove a Justice of the Peace, a Notary Public, or a Commissioner to administer oaths in the Supreme Court of Judicature in England, and must bear a 2s. 6d. impressed Stamp I, the above-named A. B., do hereby request The ‘A’ CoMPpaNY, LiMITED, to issue to me a duplicate Certificate of the ...... above mentioned, notwithstanding the loss of the Certificate numbered ............ and in consideration of the Company so doing, I hereby, for myself, my heirs, executors or administrators, indemnify the said Company against all claims and demands, moneys, losses, damages, costs, and expenses which may be brought against, or be paid, incurred, or sustained by the said Company by reason or in consequence of the said Certificate having been mislaid, destroyed or lost, or by reason or in consequence of the issuing to me of the said duplicate Certificate or otherwise howsoever in relation thereto respectively. I further undertake and agree, if the said Certificate shall hereafter be found, forthwith to deliver up the same or cause the same to be delivered up to the ‘A’ Company, Limited, their successors and assigns without cost, fee or reward. Signed by the said 4.B. in the presence of Witness’s name | X.Y. Z and Address |... ... Note..—The Indemnity must bear a 64. Stamp, either impressed or adhesive. The Company may (and will if the account be of any magnitude) require a guarantee or indemnity by a person of standing as follows: — And I... of... concur in the above request and guarantee the performance by the said ............ of the above undertaking. (RY TL 0 1377.2) Dated this coc GAY Of coors IQs APPENDIX F 5 FORM No. 8. APPLICATION FOR BONDS OR STOCK (Size 8% in. by 8% in.) Chis form is based on the recommendation of the Institute of Batkers THE ‘A’ Company, LIMITED. Registered Office: London Wall, London. [SSUE OF 50/ STERILIN~ T-wr-To the... .Bank, London, ‘As Agents for the A’ Company, Lin HavING paid to you the sum ot , oeing the deposit...............per cent.) payable on application for ,...... of the above-mentioned 59, Sterling Bonds, I/we, being of full age, hereby request that you will allot to me/us that amount of Bonds, and {/we hereby agree to accept the same or any less amount that you may allot to me/us, and to make the remaining payments thereon in cash according to the terms and conditions of the Prospectus dated 10 Name (in full) Address (1 “al” lo be written distinctly. Profession or Busines. (A women should state whether ph “inster, Wife or Widov Name (in Addres lo be written distinctly. Profession or Busine A woman should state whether she i. -. Spinster, Wife. or Widow (Signature This Form, when duly filled up as directed above, should be sent. with the necessary remittance, to the. Bank Date Cheques should be ma® - -"'- = oa ud cross de 0" tT» WO should be signed yy -he alteratior An acknowledgment will be forwarded in due course, either Allotment Letter or by return of the Deposit Ie SECRETARIAL PRACTICE FORM No. 9. APPLICATION FOR SHARES WHERE NO RECEIPT 1S ISSUED. [Size 8} in. by 8% in.] This form is based on the recommendation of the Institute of Bankers. THE ‘A’ COMPANY, LIMITED. Registered Office: London ‘Wall, London. SHARE CAPITAL f . Divided into Shares of £ each. Issue of Shares of : No. To the Directors of Tue ‘A’ CoMPANY, LIMITED. HavING paid to your Bankers the sum Of fom bEING 2 deposit Of......w.....per Share on Application fOr... .m...3hares of {own €ach in the above-named Company, I/we, being of full age, hereby request that you will allot to mejus that number of Shares, and I/we hereby agree to accept the same or any less number that you may allot to me/us upon the terms and conditions of the Prospectus dated......oomemmenees and Memorandum and Articles of Association of the Company, and I/we authorise you to place my/our name(s) on the Register of Members in respect of the Shares allotted to me/us. (Name (in full) wren AQAVESS (110 FULLY ores sss issn sass sss se ees To be written distinctly. Profession OF BUSIHESS. mms wri corstssssissssses (A woman should state whether she is a Spinster, Wife, or Widow.) Name (in full) rennin Address (11 FULD) nensesscssisi To be written distinctlv. Profession oF BUSINESS. erent . (A woman should state whether she is a Spinster, Wife or Widow.) (Dated)... wid (Signature)... This Form, when duly filled up as directed above, should be sent, with the necessary remittance, to the Company's Bankers, the ... SE = 1% o 1 : SE ———— Cheaue- ~hould be made pavable to Bearer and crossed Told Be tte Iruwe bv ‘Order’ to ‘Bearer’ the alteration et ———— The Company will forward an acknowledgment in due course, either bv Allotment Letter or bv return of the Deposit. APPENDIX F FORM No. 10. APPLICATION FOR SHARES WITH RECEIPT FORM ATTACHED, Size 13 tn. by 8} in. the scceipl being exactly a quarter of the whole form. This form is based on the recommendation of the Institute of Bankers, and is designec for use with ‘ window ’ envelopes. THE ‘A’ COMPANY, LIMITED. Registered Office: London Wall, London, SHARE CAPITAL Jivided into Snare [ssux or SHAR' To the Directors of THE ‘A’ CompaNY, LIMITED, Having paid to your Bankers thesumof £_____________ being a deposit of .._ per Share on Application for. Shares of {__ each in the above-named Company, I/we, being of full age, hereby request that you will allot to me/us that number of Shares, and I/we hereby agree to accept the same or any less number that you may allot to me/us upon the terms and conditions of the Prospectus (dated...) and Memorandum and Articles of Association of the Company, and I/we authorise you to place my/our name(s) on the Register of Members in respect of the Shares allotted to me/us. Name (in full)... 288 ($1, To be written distinctly. " :ston or Business ___________ Soe womar: should state whether she is a Spinster, Wife or Widow .. (Date)... o%_ This Form, when duly filled up as directed above, should be sent entire, with the necessary remittance, to the Company's Bankers, the_ --Bank, Lombard Street, London, E.C. Cheques should be made payable to Bearer and crosse Ce NEO ¢ RO* If altered from ‘Order’ to ‘Bearer’ the alteration should be signed by the Drawer. The Applicant is particularly requested to write clearly, within the bordered space below his or her name and the full address to which the receipt should be sent. For Joint Accounts the first name should be written within, and the other or others below the bordered space. -e* [PERFORATED **¢* COMPANY, IMT ~~ ““ZCATION F-'C IPT. Name of First or of Sole Applicant. REceivED for account of The ‘A’ Company, Limited, from the person(s) whose name(s) is/are written in the margin, the undermentioned amount being a deposit of ___. per share on Application for Shares in the above: named Company. ANh. mitec Address joint Anplicants (if any) Names only. This Receipt, when returned by the Bankers, must be preserved by the Applicant to be exchanged in due course for the relative Share Certificate. FORM No. 11. APPLICATION AND ALLOTMENT SHEET. Allotment of 100,000 Shares of £10 each in The ¢ A’ Company, Limited, issued at par (or £.... per Share as the case may be). SiN iN ox DISTINCTIVE Nos. OF SHARES Jrom w 3 O pu Ib p=— > — 0 = > a $e pe, O ey) APPENDIX F FORM No. 12. ALLOTMENT LETTER (WITH ONE RECEIPT ‘Size 13 in. by 8} in., the docket at the foot being exact!” a quarter of the whole form.) This form is based on the recommendation of the Institute of Banker and 1s designed for use with ‘ window ’ envelopes. ‘Inde apressed Stamp Space for Name and Allottee to be fille: Compar vw Wor = TT Issue oF SHARES [DEBENTURE STO In response to your application, you have b-Shares of £ each numbers of the £ Debenture Stock or Bonds The Amount payable on Application an . per Share) (viz., _— per cent! You have already paid Making amount due from vou on Allotment or Making amount due to you, for which a cheque is enclosea _ Payment of the amount due from you should be made on or be’ the...........day of........as directed below. Interest at the rate of % per annum will be charged on any amount which may oe accepted after its due date. Failure to pay any amount on its due date will render the shares and any previous payment liable to forfeiture, [Further particulars with regard to this Issue can be inserted here as require” By Order of the Board, ~ seLret” This Form, with remittance. must be forwarded en: the ne Bank, who will return it duly . eceintec It should then be carefully preserved to be exchanged for the relative Certificate (or Scrip) in due course. Notice will be given bv the Company when the allotment letter 1s ready for exchange. Cheques should be made pavable to Bearer an [f altered from ‘Order’ t{. ‘Bearer’ ihe al the Drawer RECEIVED for account of the + Ympany, .imitc due on Allotment. AT” L "JvVe amou., e ot 19800008 D urn THF esse [PERFORATZD | ALLOTMEY; COMPAS rr eT 1 Date... concern d WJ one orm of renunciation should be added for endorsement SECRETARIAL PRACTICE FORM No. 13. ALLOTMENT LETTER (WITH RECEIPTS FOR AMOUNT; DUE ON ALLOTMENT AND FOR PAYMENT IN FULL). impssed (Size 13 in. by 8} in., the dockets being exactly a fourth | stamp of the total length.) This form is based on the recommendation of the Institute of Bankers, and is designed for use with ‘ window ’ envelopes. . NO. THE ‘A’ CoMPANY, LIMITED, Space for Name and Address Allottee to be filled in by ti Combany. London, E.C,, Issue oF SHARES [DEBENTURE STOCK OR BONDS] oF SIR OR MADAM, In response to your application, you have been allotted Shares of £ each a . £ Debenture Stock or Pant the A” Company, Limited The Amount payable on Application and Allotment (viz por Searels viz., Sor cont} is .. . You have already paid .. - -. Making amount due from you on Allotment .. or Making amount due fo you, for which a cheque is enclosed £ Payment of the amount due from you should be made on or before the as directed below. Interest at the rate of % per annum will be charged on any amount which may be accepted after its due date. Failure to pay any amount on its due date will render the shares and any previous payment liable to forfeiture. "Further particulars as to Pavment in Full should be inserted bere with a discount table on the back.] By Order of the Board, Secretary. This Form, with remittance, must be forwarded entire to the Company’s Bankers, the nee BAK, irom sssssssessssssssons who will return it duly receipted. It should then be carefully preserved, to be exchanged for the relative Certificate (or Scrip) in due course. Notice of such exchange will be given by the Company. py oT +0? wee If altered from ‘Order’ to ‘Bearer’ the alteration should be signed by the Drawer. RECEIVED for account of the A- Company, Limited, payment 8 full on the above-mentioned Shares. Stock. Foy Bank RECEIVED for account fof the ‘A’ Company, Limited. the amount due on Allotment FOV ono ~~ BANK coe Cashier. Date... 10 .. eesmesssrseneenenis LQ enna seassncasss [PERFORATED] seesacevsnsanas PAYMENT IN FULL. No.. .... THE ‘A’ COMPANY. LTD., Nrto AIL" ‘TMENT. No... THE ‘A’ COMPANY. LTD... Date — oo IQs Date TQ aa APPENDIX F ” J FORM No. 14 hed 3 Id Eg QL L =) an s < > ~ a v o ¢ = I'S v rf v 3 g SB Va _ he ® EO Qo. TES IEE ® 4 yom = © EE e* 22 = bo fg "588 S's, 3 ~E 325 Ya A 3 2 LETTER OF ALLOTMENT AND INTERIM CERTIEF'CATE. (This form should be printed on stout paper’ Tur °° ~ CoMPANY, LIMITED. fae Te" Tondon Wall, London Te 0. THis is to Certify that in accordance with your application you have been allotted and registered as the holder of .......... Shares ve . each in The "4 Company, Limited, numbered from inclusive, upon which you have paid the sum of ... . per Share. -amaining instalment: are pa=-hle = "~llows: cv ehaye or 1 \ Seal of Co. Subject to due pavment of instalments this interim certificate will be exchanged fr a definitive certificate. It should, therefore, be carefully preserved. Divector. Address wo. comp=” hem oon 3. rt, spe ‘mite ’ z c - "RRYORATE; .. CHMTANY. Tnstalmen: 4 llotmen. 20000006 wsssss [PERFORAT™D] - - "wstalm LES 0000 + [PERFORLT" nstalme 1 llotment LC Wter _ashies vita: SECRETARIAL PRACTICE FORM No. 15. OFFER OF NEW SHARES, TO ACCOMPANY CIRCULAR OF THE COMPANY. [Size 13 in. by 8} in., the veceipt being a quarter of the whole form.) This form is based on the recommendation of the Institute of Bankers, and is designed for use with ‘ window ' envelopes. [FRONT] THE ‘A’ ComMPANY, LIMITED. ’ Authorised Capital £ , divided into Shares of £{ each of which Shares have been issued and are fully paid up. FURTHER ISSUE OF SHARES OF £ EACH, At Par. At a Premium of per Share. "Lowpon. B.C. To the Shareholder whose name and address are writien in the bovdeved space on the Reverse of this Letter. srewinscn BG WitH reference to the Circular of this date, your present holding and the extent of your right to participate in the above-mentioned issue are specified on the reverse of this letter, opposite your name and address. [f you intend to take up the shares to which you are entitled, you will please fill up and sign the Form of Acceptance and forward the entire sheet, with the necessary remittance, to the Company’s Bankers, the eenesesnmrenssnrens. POTENT Agnes osssesss gins rar to be received by them not later than ees If you desire to transfer your rights you must sign the ‘Form of Renunciation and Nomination,’ as set out on the reverse of this letter, and your Nominee(s), who must be of full age, must (instead of you) then fill up and sign the Acceptance Form and forward the entire sheet, with the necessary remittance, as directed in the preceding paragraph. Should you elect to divide your rights, the entire Form must be deposited at the Company’s Office to be cancelled and exchanged for Split Forms at any time before the.............day of... Letters will be split once only. If the Conditions as to Acceptance and Payment ave not duly observed, your vight to participate in the above-mentioned Issue will be absolutely forfeited (and the Directors will deal with the Shaves for the benefit of the Combany al theiv discretion). Secretary. -eeeesesess [PERFORATED] eesesseseensacasa Lee eesti earasnanananastee seeder A Share Certificate in the name of the Acceptor will be ready on - It will be exchanged on or after that date at the Company’s Office. in exchange for the Receipt on the back hereof, [P.T.O. APPENDIX F FORM No. 15 (continued). [BACK OF FORM 15.] THe ‘A ComrpaNy, LIMITED. No._ Present holding __. —w—— Shares Entitled to a pro rata allotment of _ Sudre Space for Name and Addre: of Shareholder, to be filled - hy the Company Joint Shareholders {if any) Names only. FORM OF RENUNCIATION AND NOMINATION, to be signed by the Shareholder only if the Rights are renounced. To the Directors of The ‘A’ Company, Limited. I/we hereby renounce my/our right to the above-mentioned new Shares in favour - the person(s) accepting the same and signing the form of acceptance below. Affix stamp. “Inder Sign 0 3 aswrucnons Signatures “at Holders FORM OF ACCEPTANCE to be signea To the Directors of The ‘A’ Company, Limit-Having paid to your Bankers the sum ot . Ding the First Instalment Of ...... per Share] in respect Of ....._...._.._... Shares referred to in the within letter [/we the above-mentioned Shareholders /Nominee(s) hereby accept your offer of the said Shares pursuant to the Memorandum and Articles of Association of the Company and subject to the terms and conditions of your Circular of .... ....... and I/we authorise you to place my/our name(s) on the Register of Members in resmect of the said Shares Name (in full) Address, and Occupation >f Nominee f woman, tate whe-:ber Spinster, ot Married. Cheques should be made payable to Bearer aru if altered from ‘Order’ to ‘Bearer’ the alteration “ttssee [PERFORATED] "*** © "*?’ Company, LIMITED. Shares of £ each at No... RECEIVED for Account of The ‘A’ Company Limited, from the person(s) whose name(s) is/are written in the margin the undermentioned amount, (being the First Instalment of per Share}, payable on Acceptance of Shares of above-mentioned Issue. ———-Bank Limited Address Joint Acceptors (if any) Names ouly For instructions as to exchange Receipt for Certificate, see revere If other instalments are payable, further forms of receipts must ne added.) 15 % 4 SECRETARIAL PRACTICE FORM No. 16. COMMON FORM OF TRANSFER. I/We in consideration of the Sum of [See Note.] paid to me/us by hereinafter called the said Transferee Do hereby transfer to the said Transferee in the undertaking called the To HOLD unto the said Transferee several conditions on which hold the same; and said Transferee , do hereby agree to take the said subject to the conditions aforesaid. subject to the the As WitNEss our Hands and Seals, the day of Signed, sealed, and delivered, by the above-named in the Presence of Signatire co een AAAreSS meee DICOITDALION oeecoemmmiisnommrmmmimesicsmmmmmim——— C A Signed, sealed, an delivered, by the above-named in the Presence of SHENALUIE. eee Address. comes — COCCUDALION ce erase resston { Nore.—The Consideration-money set forth in a transfer may differ from that which the first Seller will receive, owing to the sub-sales by the original Buyer; the Stamp Act requires that in such cases the Consideration-money paid by the Sub-purchaser shall be the one nserted in the Deed, as regulating the ad valorem Duty; the following is the Clause in question: “Where a Person, having contracted for the purchase of any Property, but not having obtained a Conveyance thereof, contracts to sell the same to any other Person and the property is, in consequence, conveyed immediately to the Sub-purchaser, the Conveyance is to be charged with ad valorem Duty in respect of the Consideration moving from the Sub-purchaser.” gi a. # =v frais da kid [Stamp Act, 1891, Section 58 (4).1 For the recommendations of the Council of the Institute in regard to the execution of transfers. see Chanter VII. APPENDIX F FORM No. 16 (continued) [BACK OF FORM 16]. NOTICE TO BE ISSUED ON PRESENTATION OF TRANSFER WITH NOMINAL CONSIDERATION UNLESS "JUDICATED OR PROPERLY EN-DORSED Tue ‘A’ CoMpPANY, LIMITED. Registered Offices: London Wall, London. i TRANSFERS made for nominal consideration must either (1) bear the Inland Revenue Adjudication Stamp, (2) be accompanied by a written explanation certified by an Official Deed Marking Officer, or (3) be accompanied by one of the following explanations signed by the transferor(s) and transferee(s) or by a Banker or Stock-Broker on their behalf: (a) we certify that this transfer is made by way of Security for a loan. (d) certify that this transfer is made on re-transfer to the original transferor on repaymentof a loan. fc) a certify that this transfer is made on the retire ment of a Trustee. d) we certify that this transfer is made on the appointment of a new Trustee of a pre-existing trust. I . : : ; (€) vo certify that this transfer is made to a mere nominee of the transferor and that no beneficial interest passes. (f) ws certify that this transfer is made to a residuary legatee of Stock (or Shares) forming part of the residue divisible under a W'll. le) ~ certify that this transfer is made to a beneficiary under a Will in satisfaction of a specific bequest of the Security transferred. (A) oo certify that this transfer is made to the person(s) entitled to the Security as part of the Estate o; a proprietor who died intestate. (2) A - certify that this transfer is made to a beneficiary under a Settlement on the distribution of Trust Funds of stock, &c., forming the share, or part of the share, of those funds to which the beneficiary is entitled in accordance with the terms of the settlement. N.B.—This form can be printed on thin paper and bound interleaved with plain paper for use with carbons, in which case the counterfoil can be dispensed with. Tue ‘A’ Co., LTD. LoNDON Warr, LonpoN, E.C. De snsresseasenseniiini, eoeswmiiiiiis TQ rsronsusinse BaraNceE RECEIPT FO eres snes S NAT €S [ STOCK. PAN on or [ssued to Messrs. ..... [ag ‘A’ CompaNy, LIMITED Noe No. of Certificate ... for f£.. stock " .. shares]. Name. A. B. Amount of Balance £..... stock [....shares| [SSUEA tO oan Distinctiv Name of Shareholder. ATOM for Registrar Certificate to be ready... NoTe.—This receipt does not in any way constitute a title to the shares (stock) therein referred to and is not negotiable. The Company will not be in any way responsible for any purpose for which it may be ased otherwise than the Certification of further Deeds of Transfer or exchange for a Definitive Balance Certificate. No Transfer for any of the Balance of Stock (shares) above referred to will be certified, neither will a Balance Certificate be issued, without the production of the relative receipt. xX > — ~ 2 nD Ti = v. 57 ® = £ bo v = fe > = T I m Oo 2 — - : Lt y Ng — O bp APPENDIX F FORM No. 18. OTICE OF CERTIFICATION OR REGISTRATION. THE a COMPANY, LIMITF™ T~upnr 7 0 ~ To A. B. Please note that the undermentione: "eed(s) of Transfer . ‘ has - , (purporting to be signed ww vor) ~°° pao prese’ 3 {or Delete words Purp § g have not applicable certification, (b) [lodgec reeistrati-- ~The relative* No. ot Shares. Amount of Stock. Name(-.ransleree: Unless . .iear from you to the contrary by return of pos: [ shall assume ti.. same w. be in order and the said Transfer(s will be ~~ ~~ sa © recretary Insert Share Certificate(s) or other document. If this form is bound up interleaved for carbon copy the counterfoil can be dispensed with. NO... verre L Queene Left DV ee eecssensesesssssssesemsssenee. Address NO. of Shares ....mmmmsssisssscssssene Amount of Stock £ ween N AINE OF eee ee eevee oon NO THE ‘A’ CoMPANY, LIMITED. Registered Office; London Wall, London. E.C. RECEIVED STO coors rermssssssescssesessasssssssasss -sessssssssssacrsa- --snsssssssssssssssssssssasssssssssssssssstnee eas 0A res sRases aNennn E000Re 000000 00INTIatseSsios INANE stettIoNenannssetstedesitinesnend souade the undermentioned ....o.. Transfer Deed....of... SHARES [£m SOCK] fOr registration, subject to the approval of the directors. No. of Shares, or Amount of Stock Share Numbers Transferee. From ~ nN Ad v=Ly WC ~ 2 Hj ) = = = rv mn OQ J - -l — = © 5 nN e" wn a] O = 0 oS = rm od '-T 7 > C. — Jet O —_ The Certificate... in respect of the above Transfer... will be ready for delivery in exchange for this RECEIPt On mmerrsersesssisrin Fee paid. nssesscessmeeen Certificate readv....... Registration Fee nn “-anacgp GeO Secyetary APPENDIX F FORM No. 20. SL RUBBER STAMP ON TRANSFER, FOR RECORD OF OPERATIONS. ‘By using this form on transfer deeds the need for a separale Register of Transfers is avoidzel” Top ~~ wO., PE fT Cransfe Rece Dat: Notic Da I LT: FORM OF . BET rH + NC, 2 © (IN WHERE DEED HAS -~ 77 ° MARK. -— SIGNED, sealed and delivered by the above-named 4. B. in our presence, he having signed by a mark in consequence of being unable [e.g. trough physical infirmity] to sign hisname, the deed having first been read over and explained to him and he appearing ‘lly to understand the effect thereof. Two Witnesses should attest, one of whom should be a Doctor, Justice of the Peace, Minister of Religion, Barrister, Solicitor, or other person of standing? SECRETARIAL PRACTICE FORM No. 22. REGISTER OF TRANSFERS (FOR BOARD MEETING). See alternative plan of Form 20.] Consolidated Ordinary Stock. Date of Registration. Babar assesses ARE” 1 Transfer Ledger. No. Folio Transferor Amount Transferee Folio 2204 918 Johnson, J. .. 1000 Arliston, Mrs. E... gon 2205 2290 Smith, A..... 800 Adams,E.U. ... g1 2206 1000 Jackson, H.Y. zoo Baildon, J.J. ...209#% 2000 Iransfers Nos. to , both inclusive, passed ‘n’ means New Account. The name opposite which it appears has not previously been entered on the register APPENDIX F FORM No. 23. NOTICE TO PARTY ON WHOSE BEHALF NOTICE OF RESTRAINT HAS BEEN LODGED. (This form can be modified, as requisite, where payment of dividends has been restrained.) THE ‘A’ CoMPANY, LIMITED, . LoNDON WALL, LonDON. EC. vere LQ nee. DEAR SIR(S), I BEG to inform you that deed(s) transferring the... Stock [........Shares] registered in the joint names of 0. P. & R. S., the Stock (......... Shares) referred to in the Affidavit and Notice of Restraint dated ........... and lodged at this Office on the ........ ..., has(ve) been presented here for (certification/registration), and I have to give you notice on behalf of the Company that such transfer(s) will* [when presented for registration] be duly passed by the Directors after the expiration of eight days from the date hereof, unless in the meantime proceedings are taken to prevent the registra. tion of said transfers). Yours faithfully, Secretary. * In the case of a transfer already lodged for registration cross out the words ‘ when presented for registration.’ {This notice should be sent by registered pr FORM No. 24. NOTICE TO PARTY WHO LODGED THE NOTICE OF RESTRAINT THE ‘A’ CoMPANY, I ™™MITED, LoNDON W* ~ ~1ooN, E.C. DEAR SIR(S), REFERRING to the Affidavit and Notice dated... filed...........o..... and lodged by you at the Company’s Office On ....oooooon. TESErAINIng the transfer of £.... Stock | ...Snares! registered in the joint names of 0. P. & R. S.. i = ~ to senyou herewith copy of a letter forwarded to-dav ve... ...... ernenenON Whoselbehalf ithe restraint was“placed, notifyine them that the Stock (Shares) is (are) about to be transferrea. Please acknowledge receipt. Yours®faithfully, Secretary. This notice should be sent by registered posi.) a J SECRETARIAL PRACTICE FORM No. 25. REQUEST BY EXECUTORS OR ADMINISTRATORS TO BE PLACED ON REGISTER IN THEIR OWN RIGHT. To THE ‘A’ CoMPANY, LIMITED. LonpoN WaLL, Lonpon, E.C. Name of deceased... wm TT 87s swessssssssseasssatace Probate. INO...sssmmmssssssssssssssssssssss I/We, the undersigned, being the (a)* Executor(s)/rix of the *Delete words not appropriate. . ] Lo. Will, (b) Administrator(s) of the Estate of... i” deceased, hereby request you to register me/us as (a) member(s) of your Company in respect of the... umm Shares numbered... mnt Orme NCIUSIVE [OF Loonies Stock], now standing in the name of the said deceased. Dated thiS.eed@Y Of cnssssnsssssnsmsssssmsessssssssssmsssssssssssss I Qenensssssne Usual signature NAME IN FULL cocmmmonmsmsmmmsnsmssmasssssssssssasssssssssssssssssssssases AAALEES. crnsimemssisiiiisssisssss mim — DESCIIDHION ovvecersoncesssnrssssssssmsssssensasss. 1a senses. o Usual signature NATE 0 TUL cinnamon: AQATESS cesmsecsmsssessasssessissesssssmmmssssssssssasssssssssssssssssssissssssessssass Description esr ————— A chee astsnOuRIATIeNIRsEIRaNsEeRieensIatesastiestiesnIerrTesIel Note.—The Share or Stock Certificates must be lodged at the Company's offices with this request, accompanied also by the Probate or Administration Letter if not previously lodged. No stamp is necessary where the above form is used. APPENDIX F FORM No. 26. CERTIFICATE OF IDENTITY. THE ‘A’ CoMPANY, LIMITED. (To be made by a Solicitor, Broker, or other authorised Agent.) [, the undersigned, I., of London, state that I have known and been well acquainted for .... years and upwards now last past with C. D., who is registered in the books of The ‘A’ Company, Limited, in the name of ENE BOER E BEIT Tees Ieee Pr Neae ree Been Ra Eee BPReNNeRAINIe000eIE0EItatinIcteTRtnItetIetINtlteentttianbrrrunnunvuny aves wenewiSROotBal staal evn o) POEOIN FETROO EEO ROBT AGNIENORP FETO0O RORSUEEDS “BeB0aE, as the Proprietor of iShares of.o — ol each, and that C. D., mentioned in the eee rere. 1€7€WIth exhibited, and of which an Abstrac’ is hereto subjoined, is the same person as the saic oo. ,, tw. ve ~~ *Deed of Transfer, Probate, certificate of deain ui m: document requiring identification. pl ge or other hel SECRETARIAL PRACTICE FORM No. 27. CALL LETTER. (Size 13 in. by 8%} in., the docket one quarter of the total length of form.) This form is based on the recommendation of the Institute of Bankers, and is designed for use with ' window ' envelopes. NO Space for Name and Address of Shareholder, to be filled in by the Combany. THE ‘A’ CoMPANY, LIMITED, LonbponN, E.C. CALL OF PER SHARE ON ISSUE OF [1st, 2nd or 3rd rall as case may be.] MAKING THE SHARES Pai1p, SHARES. I have to inform you that the Directors, by a Resolution of the Board dated......ooveeeeeerermnny, Dave made a Call as set forth above. The amount due from you in respect of the eee. occ... Shares registered in your name is £........coco... Which must be sent on or DEfOTe .oooooeoeeeenny,. tOgether with this ewtire Notice, to the Company’s Bankers, the nn BANK, niesiininn who will return the Notice duly receipted. [Particulars should be given here if the Certificate requires endorsement, or the Articles of Association provide for any penalty for failure to pay on due date.] By Order of the Board, S ecvetary OF es Cheques should be made payable to Bearer and crossed If altered from ‘Order’ to ‘Bearer’ the alteration should be signed by +he Drawer. RECEIVED for account of The ‘A’ Company, Limited, the | amount of the above-mentioned Call as stated. Receipt Foy ee BANK, + Stamp a tlh A tll A db tb death: 4 a ahs AP DRA AA A 1 fp = Cashier Date IQ... Amaasnag ismsssass TPERFORATENTaaacs a No. (CATT OF THE ‘A’ COMPANT" TIERED PER SHARE ON ISSUE OF SHARES. Date sven sesverremarae ] Qe Date ot Entry. Sheet No. of this accouns.. Nawels) woven. AAAYESS oocvnerrrsssrsrerirsan DCCUPALLON reaenermmrsrseren Date of Entry as a Member... Date of Ceasing to be a Member... SHARES ACQUIRED Distinctive Numbers. Jumber f Allotnent or ransfer ‘ranseror's “olio. {umber of Shares. Amount or Share ‘aid or greed ©0 be conidered Paid. MEMORANDA Dividends todate of Entry of Transfer Number of | Transfer SHARES TRANSFERREL distinctive Numbers. | ranseree’s “olio, Number of Shares. Amount er Shar aid or ‘reed 0 be _onsidered as Paid Balance Shares Held {umber of Shares. 11 0 0 2 ND 0 Jl I > 3 bol > = Tr gy: U > J T ool pt 166 SECRETARIAL PRACTICE FORM No. 29. FORM OF REPLY TO BANKERS AND OTHERS RE NOTICE OF LIEN. THE ‘A’ COMPANY, LIMITED, LoNxpoN WALL, LonpoN, E.C. and Qiu WitH reference to your communication dated the rrmemmemennenney. WHiCh purports to be a notice of the deposit of certain Certificates of Stock [Shares] of this Company with your Bank, I beg to inform you that the Company and its Officers are unable to recognise, or in any way act upon, the said communication. [ return it herewith. Secretary. To the Manager ersmsnnrerissssnnes BANK (Per Registered Post.) Joldin; Surname hristian ‘~me * ddres-"vee, Yebent Stoc! be Dr fa 5g 5% <5 TC st Ras wo Te < gf 3 3 > hy n MHZ 35 80 2 10" Se 20 w 30 HH , nn gm TN 7» 9 . [0 Em 2’ - » BF = 0) 9! ed nn - Tr “u ae Name Description Address Registration Number G 3..E 7 holder's Specimen Signature Holding Folio 5% Deb. Leerssen 53/3 [ Pref. Shares... Ord. do. en, rasensenvas su russsnTsTnare ant rsesencaaasnsntrassanenane ss averrscersrsasmrrensanssesncsaseceevatrran laennnsnssacnssnncrsnissnansane DiviDEND INSTRUCTINNS * n,m, BEART retreat Ere OTE STERN SSS ar REESE ess ETS SSR Ate seta bub bares onsaranye nr Lad ET = wi a > = o pi = © Mm Oo XT = z 0 Cc" = O [3 H > OO wn = a = = bby = f— o> — Hg kg > c _ fy a Tr 1 APPENDIX F FORM No. 32. INDEMNITY AND REQUEST FOR DUPLICATE DIVIDEND WARRANT. To THE ‘A’ CoMPANY, LIMITED. IN consideration of The ‘A’ Company issuing to me a duplicate Warrant for the [Interest or Dividend] to the [30 June or 31 December, 19....], amounting to fo... co. on the [amount of holding, e.g. £100 ordinary stock] registered in my name, in lieu of the original Warrant No.....dated........... which has been lost, destroyed, or mislaid, I hereby undertake and engage for myself, my Executors, Administrators and Assigns, to hold the said Company, and the Directors and Officers thereof, harmless and indemnified against all losses and expenses which may be incurred in the event of the said original Warrant being paid or forthcoming at any future lime, or otherwise in consequence of the said Company issuing a duplicate to me as aforesaid, and I request that such duplicate Warrant may be issued to me accordingly and I engage to return the original should it be found. Dated this........day of... rvs Josie Stonatur.... +“ STH nd Witness: ddrecs ........ Signature wr. Address... EEA uC PIER PRS I PERE BER. OL OCCUD ALLOW reese Note.—Where there are circumstances involving the slightest suspicion or the amount involved is substantial, the holder's bankers should be requested to join in the indemnity. SECRETARIAL PRACTICE FORM No. 33. DEBENTURE STOCK NOTICE AND INTEREST WARRANT DEB. SERIAL NO. No... 2S 283 128 330 wn 04g Dz a & Soy 8 2° © bert 20 a wn vg "RE 8%. «83 v3 ng = Yt <Q BQ =a 03 T3538 33 p=- 23 105 Fu To 5¢ =i no Hn I 28 20 o¥ “20 ah A ne 0 > 29 30 TE 353 ige x) £ IC po VE ‘ud 1 20 +2 3 3 Ff = 8 Ln oF TL THE ‘A’ COMPANY, LIMITED, Lonpon, E.C. 2 omnssvssimmmmmeesemmiesiggrmsessiny Nines To For the a/c of SIR (or MADAM) I beg to send you subjoined a Warrant in payment of Interest tO wereesreesinney 10....., less Income Tax, payable on the vy 19. on Debenture Stock of the Company according to the Register of Stockholders on the ........, 1I0.., when the Transfer Books were closed. Registered | Holding Amount of Interest 5 9% First Debenture Stock Interest for half-year to cy I9...cnn. 43 % Second Debenture Stock Interest for half-year to.....ccriy IQ.ccn Less Income Tax at......... in the 4 Amount of Warrant .. . { a | od. I certify that Income Tax on the money out of which the above Interest is paid will be duly accounted for by the Company to the proper Officer for the receipt of Taxes. Your obedient Servant. reser sssessssessmenene een SD ECYELAYY N.B.—Proprietors claiming exemption from or abatement of Income Tax are informed ‘hat the Inland Revenue Commissioners will accept this statement as a Certificate of the eduction of Income Tax. It should therefore be carefully preserved. A charge of (1/-) ill be made for each duplicate issued. inassessssessse [PHRRFORATEID [eececccccccserseccscsossancassasssssoscosssssssasassesses Continued on next Hage. APPENDIX F ~Y FORM No. 83 (continued). (This form of Warrant has been settled by the Council in conjunction with the Institute of Bankers.) Sevial NV umber Warrant No. , Seeeneseeserisesvec . sassnrese, DEBENTURE INTEREST WARRANT. THE ‘A’lCompany, LijMiTsp. LONDON,| E.Coeeeerec IQ et - To THE ‘X BANK, Lp. (Revenue Stamp) Lombalrd St., London, E.C.3. Pay £0..mmer Crosses, 0r Orde: the sum of... err re POR] DAS rrr slhillings and monn. peNCE For and on| behalf of the) ‘A’ Company, Limited. Stenature... Signature of Payee... nen Nore—This Warrant must be signed by the payee and presented ta the Company’s Banker's within six months of the date hereof. Enter:—T (town), M (metropolitan), or C (county), whichever letter Ss applicable. Note—If (a) Window envelopes Addressing machines ~» Calculating machines are in use this form will require adjustment. Plenty of space shoula be left for the payee’s signature. 5 ona ff SECRETARIAL PRACTICE FORM No. 34. DIVIDEND NOTICE AND WARRANT. (The details required bys. 33 of the Finance Act, 1924, see Chap. XX VI must be stated by companies incorporated in Great Britain, including those of them making ‘free of tax’ payments.) Serial Nmap = NO, THE ‘A’ COMPANY, LIMITED. LoxpboN E.C..oenn IQ. FinarL D ; : tof th INTER DIVIDEND Of... ween PET Share in respect o e year ended... IQs OluvrssrisrrivsnrnSDATES OFnvrsvinen€@Ch held by you. Dividend .. “e Less Income Tax '. reread £0 N Gai. a ———— I certify that the Income Tax on the profits out of which the abovementioned dividend is paid, has been, or will be, duly accounted for by the Company to the proper Officer for the receipt of Taxes. N.B.— Proprietors claiming exemption from or abatement of Income Tax are informed that the Inland Revenue Commissioners will accept this statement as a Certificate of the deduction of Income Tax. It should therefore be carefully preserved. A charge of (x/-) will be made for each duplicate issued. Secretary. LESS. \essasaase PERFORATED] 0080000000000000000a ii .L InaRscaacEIRRRRRSIE00RS [Continued on next page. [For Form of Dwidend Notice where Dominion Income Tax allowance is provided for. see Chapter XX VI? APPENDIX F $7. FORM No. 34 (continued). (This form of Warrant has been settled by the Council in conjunction with the Institute of Bankers.) Serial No... Dividend Warrant No... DIVIDEND WARRANT. CoMPANY, LIMITED, LONDON, E.C....vreereennns (Revenue Stamp) ToTHF WD. r ombalrd St., London, E.C.3. Ty to... nn. 07 Order he sum ©, For and on behalf of the! ‘A’ Company, Limited nature. Stenature of Payee ....... Norte,—This Warrant must be signed by the Payee and presenter to the Company’s Bankers within six months of the date hereof. Enter :—T (town) etter is applicable. .metropolitan), or C (country), whichever Size of warrant within 4 ins. by s} ins. vertical, and 83 ins, horizontal: or combined size »f warrant and counterfoil within 8 ins. and 11 ins. vertical and 82 ins. horizontal. © SECRETARIAL PRACTICE FORM No. 35. AUTHORITY TO PAY INTEREST OR DIVIDENDS. NOs To THE ‘A’ CoMPANY, LIMITED, London Wall, London, E.C. For Office use only. . Noted merrenesssssson Sh. Reg. Fol. uu. PLEASE PAY all Dividends, Interest or Bonuses which [ am now or may be hereafter entitled to receive to the* 0 SONNE RENESAS 8sREEens AEE Raa are r eer eaENee esa rate ae tere eeIns C0uNNEIIRRREASAARAREREeEeteEatnDssEtIeReentae Bank at eo whose acknowledgment shall be a sufficient discharge. Dated this een. da OF wo FP1ODYLCLOV’S SUONALUY Coos AERC R TEER SAW msddassaaaageansgRanan 881 000ERERRIIININIIEISIIITEIRIN ARISES Proprietor’s Full Name......... Permanent Address ESIGN NA NNN NEEL BENE © i BLABRELELERSI TARSAASANARAARASANAAARASESEEEETSEREEEAEONEes0tsierestesues * Insert correct description of Bankers with full postal address. I In Joint Accounts this Form must be signed by all the Registered Holders. APPENDIX F 175 FORM No. 38. SPECIMEN SIGNATURE AND DIVIDEND REQUEST This Form may be sent out with Certificate in the case of all new holdings.) THE ** Coupany ET TH NO Lonpn rT - T3 “an .Ca, asses Coase To. _ wes_i sates FOR L NTY Please favour me with a specimen of your ordinarv signature below, returning this form to me. 11 you desire that Dividends or [nterest on your Shares [or Stock] should be paid to your Bankers direct, please also fill up and sign the form at foot her: ~ Certific * Share: mount Stock Secretary. Ordinary Signature of Shareholder or Stockhold PAPERS EEN PARNR $2 0ac eR NETA BIRGER ARSI PER IPL ESe To THE ‘A PLEASE PAY all Dividends, Interest or Bonuses which [ am now or mav be hereafter entitled to receive to the? CoMPANY, LIMITED. caepeen ran, werd SOP ROS SPR NRO OUS RRR RGROCRUE PPR ROOO ORRIN SNES IR INNTSLGTGAI EIS RRS IPUSIII TORN IIPI SI RIRIUE PEER eN eNO PEO FER l sae IPReS Bank at nee. whose acknov'-d~ment = la Da NOTE.-In ‘he ca 10 7" N"olde— 4 Insert correct description of Bankers with full postal address. iy SECRETARIAL PRACTICE FORM No. 37. DEBENTURE STOCK REDEMPTION RECEIPT. RECEIVED of the ‘A’ Company, Limited, the sum of... smn dTL full satisfaction and discharge of all moneys pavable or to become payable in respect of the Lorre. StOCK Of the said Company of which A the registered proprietor(s) referred to in the w mneennee@lld Of all claims and demands on account thereof. The said Certificate(s) is delivered up by = for cancellation of the £.... Stock therein referred to. Lee08Nicirasrsrtsasurtnar anna Dated the Signature... 2d. CMD Address... Signature ..... BAY CSS cose eee eee eee eee eee es eee Signature... Address... EERE INSEE ANSE ASE EENO PERSE MRNIe SR raNRaRES APPENDIX F FORM No. 38 LETTER OF RENUNCIATION OF SHARES To: The Directors of Tae ‘A’ CompPANY, LIMITED I/We hereby renounce my/our right to the within mentioned Sharesn favour of the parties signing the Registration Application Form’ af Da* in the case of joint holders, Renunciations must be signed by all the joint holders. Signature(s) of Allottestamp. REGISTRATION APPLICATION FORM. (This must be signed by the party or parties in whose names the Shares* are to be registered before this letter is deposited at the Company’s office.) To: The Directors - ¢ THE ‘A’ CoMPANY, LIMITED I/We hereby request you to register the within mentioned Shares?* mn my/our name(s) and agree to accept the same on the terms of the Prospectus dated , 19 (and the Memorandum and Articles of Association of the Company}], and to pay all remaining instalments due in respect thereof, and I/we authorize you to send the certificate for the Shares* to me/us at the first address given below by post at my/our risk. Usual Signature Tsual Signatur. Name (in full Tame (in <1 Address... ‘Tress Description ..... Description . It is not necessary for the original Allottee to sign either of the above Forms if he desires to be registered as the Holder of the Shares* himself. This document should be preserved to be exchanged for Share* Certificates in due course. 1 In the case of debentures or Jebenture Stock :hese words should be deleted INSTRUCTIONS WITH REGARD TO RENUNCIATION. Letters of Renunciation must be lodged at the Company’s Registered Office, mmm ——_— cmmemmrsenrnnmey. NOY later than... . wt eee IQ. After that date they will not be accepted and the Shares®* will be registere * in the name(s) of the illottee(s) and thereafter will only be transferable by transfer in the ordinary form. 2. No renunciation will be recognised until the amount due ony has been paid. 3. The original allottee(s) will remain liable for all instalments notwithsw-r ciation in favour of some third party. 4. Partonlyofthe._...___._.._.._ ._ _shares* included in a letter of allotmen. renounced but this letter will, after payment of the amount due ont... be split once only on application at the Company's office above ref sss: Wm >. The party or parties in whose favour this letter has been renounced mus. Registration Application Form below. 0. Surrender of this letter at the office of the Company above-mentioned with form of renunciation purporting to be signed by the allottee(s) shall be conclusive evidence in favour of the Company of the title of the party depositing this letter to deal with the same and to receive split letters and share?® certificates #0r ‘Debentures’ or ‘Stock, as the case mav he ‘annot be Fi]j in “allot ment,” * acceptance,’ or as the ~ase mav be. SECRETARIAL PRACTICE FORM No. 309. LETTER OF RENUNCIATION OF RIGHTS. No... THE ‘A’ CoMpANY, LIMITED ~-i0aeuneesedsUsEtdataninnany hereby renounce IN fAVOUTL OF noses, eesssBEERISINItIISIRS RRS ORAS my rights to an allotment of the.....c.cocnn.Shares of £1 each in the ‘A’ Company Limited, to which I am entitled in accordance with the circular of... IQ... annexed hereto. Dated this...i TOs Signature of Shareholder ....crinnenn (In the case of Joint Holdings, all must sign.) 6d. Stamp FORM OF ACCEPTANCE TO BE SIGNED BY THE NOMINEE. THE ‘A’ ComPANY, LIMITED. I request that you will allot to me...i. Shares of £1 each in your Company, upon the terms of the Memorandum and Articles of Association of the Company and the Resolutions of the Company PASSE ...rricsiinissismmisinneessssssssssmisisny I Oivnvssrenies Dated this... mmm STGRALUTE OF NOMINEE .ooosvveeressrersrrrsssssrsssssssssssosmsneeesesssissssssssssess esses sess sss sss sees NOTE.—After signature this document must be returned complete to the Office of the Compbanv. numbers] APPENDIX F FORM No. 40. SHARE WARRANT Tre ‘A’ CoMPANY, LIMITED. LoNnpoN WaLL, Lonpon, E.C. Registered under the Companies Ac | Capital Nu. share - numbers] <i ira +75 Share warrant for shares of...............sterling ea NOS. cccoereererseerssssssssssesne. This is to certify that the Bearer of this Warrant is the Proprietor of ‘TWENTY-FIVE.] fully paid shares numbered as above in the Capital of The ‘A’ Company, Limited, subject to the Memorandum and Articles of Association and other Regu-.ations of the Company for the time Jeing. Given under the_Common Seal of the Company in London this... Aav sesessesnse X Qoveoonne Repeat wording in French or other language of the foreign country where the warrants circulate extensively. THE ‘*' COMPANY, LIMITE. Share Warrant Talon for Fresh Supply ot Coupons for Share Warran. to Bearer representing AY Veororn + The Bearer of the above Warrant will receive in exchange for this Talon a fresh supply of Coupons when those below have fallen due Shaver NUN. 17) 77 4 Tue ‘A’ CoMpAaNY, LIMITED. Dividend Coupon No.... on Shares. (ncluded in the Share Warrant numbered as below for Dividend payable according to Advertisement to de issued by the Company. Oe Secreiary Nore.—Should the Warrants circulate extensively abroad a translation (as marked) should be printed SECRETARIAL PRACTICE FORM No. 41. RECEIPT FOR DEPOSITED SHARE WARRANT. [AVL TO Tue ‘A- CoMPANY, LIMITED, LoNDoN WALL, Lonpon. EC. Tuis is to Certify that has, in accordance with the regulations of the Company, deposited the under-mentioned Share Warrant(s) in respect of which he is entitled to attend the Extraordinary (or Ordinary) General Meeting of the Company to be held at .... onthe on dav OF oe Dated the .......... day of .... cervverssrnens TQ For Tur ‘A’ CoMPANY, LIMITED. renee SD ECYEL AVY. Denomination Distinctive Nos. of Warrants No. of Warrants (in words) No. of Shares One Five Twenty-five One Hundred Total No. of Warrant Tole. No of Shas: [MPORTANT.—The Warrants named herein will only be delivered in axchange for this Certificate. which must be carefully preserved. APPENDIX F FORM No. 42. APPLICATION FOR SHARE WARRANTS SHARES. To the Directors _ ~ ze Date lodg-=.. £.’ COMPANY, LIMITED, London Wall, London, E.C. I/We, the undersigned, being the Holder(s) ot... registered Shares of your Company, as per particulars at back hereof, the Certificates whereof I/we enclose, hereby request you to issue tc me/us the following Share Warrant(s) to Bearer, in respect thereof, and [/we enclose remittance for *~ defrav the charges for same as undernoted PARTICULARS OF SHARE WARRANTS REQUIRED. No. Descriptio-TrECATI jy Shares over 2/6 mor raction hereof. IOr each Varrant. +s TAMP .JIT. 3% . . Shares ‘nly 5 per cent. of the number of Shares to be converted will be issued in Warrants of 1 Share each at the usual fee. Shareholders desiring a larger proportion can obtain them on pay ment of 6d. per Warrant extra Witness Address Dated °~ shareholder Name Address - r~ Occupatior Sior t The Signature must be attested by a Witness who must add his Postal Address after the name. When the Signature is affixed out of Great Britain it must be attested by H.M. Consul or Vice-Consul, Notary Public, or by some other person holding a public position. ® Three times the amount of ad valorem Stamp Duty chargeable on deed transferrine the share(s) if consideration for transfer be nominal value of shares. SECRETARIAL PRACTICE FORM No. 42 (continued). DIRECTIONS AS TO DELIVERY OF SHARE WARRANTS. Please deliver the Share Warrants above referred to, when ready, to the Bearer of the Voucher given by the Company on lodgment of this application, whose receipt shall be a sufficient discharge to the Company for the same. ens ———seeesenen Sl1aT€hold ers’ Signature. One of these forms of Directions must be signed by the Shareholder. DIRECTIONS TO TRANSMIT THE SHARE WARRANTS BY POST. Please forward to... At cnn at my risk, the Share Warrants referred to above, when ready, by cessmmsssnstasssssmssnssssspsansasisisssssessasss assem 01a €N0ld ers’ Signature, Left by (Name) comm NANA AR EARL AAA PEAR an EPRI ESO ONIOOI NIUE I NIININUIINIIesateere EE EL ARATOEBY os iivsssnsisivinicsviiiinisisessieiisnsssinsmsais sassesssssseshossaeseeepoassseopppmssmsnssssbsaptss sso AAISES The following particulars to be filled in before this form is lodged at the Companv’s Office. Nos. of Certificates. Number Distinctive Numbers of , of Shares. Shares. From Tn Nos. of Certificates Number of Shares Distinctive Numbers of Shares. From To Forward +0 Tv Se] TY THE ‘A’ COMPANY, LIMITED. Incorporated under the Companies Act, 1929.) Registered Office: London Wall, London, E.C.2. TTIE ‘A’ COMP.}M' LIMITED. Incorporated under the Companies Act, 1929.) Registered Office: London Wall, London, E.C.2 A RECEIVED from. Share Warrants for)... ‘Shares for exchange into Warrants .i... aS UNAernoted). mmm Registered Shares in the name ¢ with an application for the followin: \pplication Raa Warrz Ber share r~ .denominations 1414 - We » d "oa inglish Stamp Duty. TOTAL Company’s Charges V Ourrrrssssersossecne English Stamp Dut The documents applied for will be delivered to the bearer in exchange for this voucher on....... wee OF @Ny following day between 11 and I o'clock. Saturdavs excepted. 2 _ = = O = n 0 IT. ° nN J) > O aw J - - The Bearer must be prepared to state full particulars of the document he is to receive 1, — T Signe. Warrants to be ready on.......... This voucher is issued subijcct to the approval of the application by the Directors. HE ‘A’ COMPANY, LIMITED. Incorporated nnder the Companies Act, 1929.) THE ‘A’ COMPANY, LIMITED. {Incorporated under the Companies Act, 1929.) Registered Office: London Wall, London, E.C.2. TALONS. No. Ten. RECEIVED from... No. Ta... PRESENT 0% on. or any following week-day between 11 and 2 ; Saturdays excebted. ~ Sm ZO Sd 9 XN = 2 Ey] oO 5 & » D - - i“ J Je tz. O 7 to — be = — o> bt hz en 7 C be , = fr New Talons and Coupons ready on The Bearer must be prepared to state full particulars of the Jocuments he 18s to receive N.B.—This form can be printed on thin paper and bound mderleaved with plain paper for use with carbons, in which case ‘he counterfoil can be dispensed with ty CcrupraNy, LIMITED cere I Qe. RECEIPT FOR SHARE WARRANTS LODGED FOR REGISTRATION. THE ‘'. COMPANY, LIMITED, IN Q..coesssonmmnn LONDON, = amuses LE wan RECEIVF NUMBERED Warrants c Share : Shares Tota. renee SRAYES fOr Registration in the name of M rmerwww av Stuuvisssart Ber rre BORE pry Pid ones en as Certificate to be veady ....... RECEIVED from .... Share Warrants, as under: — Varrants of 1 Share each. 959 5 Shares each. 25 ”» vee Shares left for Registration in the name Total ... If the application is accepted the Certificate will be ready fo delivery at this Office, on or after ........... between 11 and 3 o'clock, Saturdays rr and 1 o'clock, but may be sent by post, at Shareholder’s risk, on receipt of stamped registered envelope. In either case the Certificate will only be delivered in exchange for this Receipn* Fe-Secvelary mn Oo 2 2 Z 0 & *N >> J = £5 Jed > lt SECRETARIAL PRACTICE FORM No. 46. REGISTER FOR ISSUE OF SHARE WARRANTS IN EXCHANGE FOR REGISTERED SHARES “mM i 4g tL e » < » 1 & £ , n > - ~ 5 He RN . 3 APPENDIX F FORM No. 47. REGISTER FOR ISSUE OF REGISTERED SHARES IN EXCHANGE FOR SHARE WARRANTS. 1 f I — he xX - 1 ” NoTE.—A different book will be required for each denomination of Share Warrant. reg SECRETARIAL PRACTICE FORM No. 48. SHARE WARRANTS REGISTER. {One book for each denomination.) Denomination, e.g. FIVE SHARES. No. of Warrant .oupons :ttached Nos. Jate of Issue Distinctive Nos. o relative registere . shares Directors’ initials Date of cancellation APPENDIX F FORM No. 49, APPLICATION FOR REGISTERED SHARES IN EXCHANGE FOR SHARE WARRANTS. Application No. ....... New Share Cert. No. I'o THE ‘A’ CoMPANY, LIMITED, ’ [, the undersigned, being the holder of the under-mentioned Share Warrants to Bearer of your Company, representing srr SIAR, hereby surrender the same to be cancelled, and request that you will enter my name in the Register of Members as the proprietor of the said Shares. Please forward the new Share Certificate by post, at my risk, tc Enclosed is 2s. 6d., being the fee required in accordance with the Conditions of Issue of Share Warrar+ Stgnatur Name in f1' Addres: Dccudation DY No. of Warrants © Distinctive No. of Shares Denomination One een. Five [wentv. fis Tota. Share: 47 a] SECRETARIAL PRACTICE FORM No. 50. APPLICATION FOR EXCHANGE OF SHARE WARRANTS FOR OTHER SHARE WARRANTS. To the ‘A’ CoMPANY, LIMITED. I, the undersigned, being the holder of the under-mentioned Share Warrants to Bearer of your Company, representing ........cw.....Shares, hereby surrender the same to be cancelled, and request that you will issue to me Share Warrants to Bearer as under-noted in respect of the said Shares. A remittance for 4.....co..., being 2s. 6d. Application Fee, 1s. per new Warrant, and Stamp Duty, is enclosed. Please deliver or forward the Warrants by registered post to eee svesssesnseesessasesastssraseemsseesssaesssnsenssnenesersssssnsaes en © Dated this cee dV OF eres TQ USUAL STENATUTE .......oooeeeeeeeeeeereerrerssssissessisassssssssssssssssnessessssse sears sssssssassemsanississsssseceses NATE, (317 JUID commonsense smn sess os mass ee ovens AQAVESS ooo erent eres sssssssessssmssssa sissies sss ssa sass esas ase aes sear n rt essa snares ODCCUDALEON ooo eraees sees sree sarees ses emmseess esses cms ses sere ass sommes esminssesrmsensen PARTICULARS OF SHARE WARRANTS SURRENDERED, Warrants Shares num- numbered bered ¥Yrom To .Warrants each for 1 Share of ” » 5 » ” » ay 9 25 9 2% 39 Shares B C Total Warrants. Total Shares PARTICULARS OF SHARE WARRANTS REQUIRED. Stamp Duty per Warrant re. Shares I Share ba) 5 » 59 25 "9 ..Warrants each for 1 Shareof f 3” bE) 5 ”» Nn » £3] 13] 2 5 ” 9 Total Warrants. Total Shares. APPENDIX F FORM No. 50 (continued). DIRECTIONS AS TO DELIVERY OF SHARE WARRANTS Please deliver the Share Warrants above referred to, when ready, to the Bearer of the Voucher given by the Company on lodgment of this application, whose receipt shall be a sufficient discharge to the Company for the same. Shareholders’ Signature. DIRECTIONSTO TRANSMIT THE SHARE WARRANTS BY POST. One of these forms of Directions must be signed by the Shareholder. Please forward to... at my risk, the Share Warrants referred to above. when ready, by ...Shareholders’ Signature Left by (Name) Address The following particulars to be filled in before this form is lodged “he Company’ Nffic-Nos. of Certificates. Tumber Shares distinctive Nvo—"' ~f Share AOI. er A Se ‘umber share Distinctive Numbe of Share: Sey Rd Jrwarc APPENDIX G [Permission has been given for this veprint, but it does not purport to be published by authority.’] Statutory Rules and Orders THE CompPANIES (FOorMSs) ORDER, 1929, DATED OCTOBER 7, 1929, MADE BY THE BOARD OF TRADE UNDER THE COMPANIES ACT, 1929 (19 & 20 GEO. 5. C. 23). The Board of Trade in pursuance of the powers conferred upon them by the Companies Act, 1929 (hereinafter called ‘““the Act”), and of all other powers enabling them in that behalf hereby order as follows :— Forms. Certified copy of Charter, etc. under Section 144. 1. The forms set out in the Schedule hereto shall be used for the purposes of the Act and the particulars contained therein are hereby nrescribed as the particulars required under the Act. 2.—(i) A certified copy of the Charter, Statutes, or Memorandum and Articles of the Company, or other Instrument constituting or defining the constitution of the Company required to be delivered to the Registrar under Section 344 of the Act, in the case of a Company incorporated outside Great Britain in any of His Majesty’s dominions or in any place under His Majesty’s protection or where His Majesty has jurisdiction unless incorporated under the laws of a foreign country shall be deemed to be certified as a true copy if in such dominion or place it is— (a) duly certified as a true copy by an official of the Government to whose custody the original is committed; or (b) duly certified as a true copy by a Notary Public of such dominion or place; or duly certified as a true copy on oath by some Officer of the Company before some person having authority to administer an oath as provided by Section 3 of the Commissioners for Oaths Act, 1889 (52 & 53 Vict. c. 10). (ii) A certified copy of the Charter, Statutes or Memorandum and Articles of the Company or other Instrument constituting or defining the constitution of the Company required to be delivered to the Registrar under Section 344 of the Act in the case of a Company incorporated outside Great Britain under the laws of a foreign AQ? COMPANIES (FORMS) ORDER 493 country shall be deemed to be certified as a true copy if in such foreign country it is— 'a) duly certified as a true copy by an official of the Government to whose custody the original is committed, the signature or seal of such official being authenticated by any of the British Officials mentioned in Section 6 of the Commissioners for Oaths Act, 1889; or duly certified as a true copy by a Notary of such Foreign Country the certificate of the Notary being authenticated by any of the British Officials mentioned in Section 6 of the Commissioners for Oaths Act, 1889; or duly certified as a true copy on oath by some officer of the Company before a person having authority to administer an oath as provided by Section 3 of the Commissioners for Oaths Act, 1889, the status of the person administering the cath being authenticated by any of the British Officials mentioned in Section 6 of that Act. c) 3. The time within which a return containing the particulars of Time for deliveralterations is to be delivered to the Registrar under Section 346 of ing particulars of the Act shall be twenty-one days after the date of making of such documents, etc. alterations or twenty-one days after the date on which notice ude Section thereof could in due course of post and if despatched with due >" liligence have been received in Great Britain. 4. A copy of the instrument by which a charge is created or Verified or svidenced to be delivered to the Registrar under the provisions of ie Sr of Section 79 (3), Section 79 (5), and Section 81 (1) of the Act shall be Sections 7g & 81. verified or certified to be a true copy under the seal of the Company, or under the hand of some person interested therein otherwise than on behalf of the Company. 5. —(i) A translation of a Charter, Statutes or Memorandum Translations and Articles of Association or other instrument constituting or defining the constitution of a Company or any Account or Document to be delivered to the Registrar of Companies under the Act shall be certified to be a correct translation (a) if made in a foreign country by— Any of the British officials mentioned in Section 6 of the Commissioners for Oaths Act, 1889, or by any person whom any such official certifies is known to him as competent ttranslate it into the English language; if made outside the United Kingdom in any of His Majesty's dominions or in any place under His Majesty's protection or where His Majesty has jurisdiction by — A person having authority to administer an oath as srovided by Section 3 of the Commissioners for Oaths Act, (88a: b) 194 SECRETARIAL PRACTICE (¢) if made in Northern Ireland by— (1) a Notary Public in Northern Ireland, or (2) a Solicitor of the Supreme Court of Judicature of Northern Ireland; (d) if made in Scotland by— (1) a Notary Public in Scotland, or (2) an Enrolled Law Agent; if made in England by— (1) a Notary Public in England, or (2) a Solicitor of the Supreme Court of Judicature of England. fe) (ii) The Board of Trade may in any particular case, if they think fit to do so and upon such conditions as they think fit, permit certified copies or translations to be delivered to the Registrar, though not certified in accordance with the above requirements. 6. The Orders and Regulations made by the Board of Trade dated the 29th day of March, 1909,(a) the 1st day of November, 1918 (two), (b) and the 26th day of March, 1919,(c) and all Orders and Regulations amending or supplementing the same and the forms thereby prescribed are hereby revoked and annulled, provided that such revocation and annulment shall not prejudice or affect anything done before the 1st day of November, 1929, under any Order or Regulation which is hereby revoked and annulled. 7. This Order may be cited as The Companies (Forms) Order, 1929, and shall come into force on the 1st dav of November, 1920. William Graham, President of the Board of Trade Board of Trade, The 7th day of October, 1929. (a) S.R. & O. 1909 (No. 324), p. 21. (8) S.R. & O. 1918 (Nos. 1497 and 1498), I, pp. 122-3. 6) S.R. & 0. 1919 (No. 270), I. D. Q8. COMPANIES (FORMS) ORDER ‘Js THE SCHEDULE. No. of Company. Form No. 4 THE COMPANIES ACT, 1929, 7 NOTICE OF SITUATION OF REGISTERED OFFICE TR Z. hh A 5s. Conipanies Registration Fee Stamp must bimpressed her —— r=Pursuant to Seciior Name of Compan Present Notice of the Situation of the Registered Office ot the Comn-~~ or ~~y- change therein To the Registrar of Companies ensen Company, ... hereby gives you notice, in accordance with Section 92 of the Comr Act, 1929, that the Registered Office of the Company is situated - ‘Signatu State whether Director 1 aAnacey . —~ Dated the. 6 19 SECRETARIAL PRACTICE No. of COMPANY..rrenerrrrrrsenin Form No. 7. THE COMPANIES ACT, 1929. a A 5s. Companies ) Registration Fee ; Stamp must be N impressed here. ANNUAL RETURN OF A COMPANY NOT HAVING A SHARE CAPITAL. Pursuant to Sections 109 and 110. Name eines of f Company | wee. JURE TASARS sun PI NAN TAOR RS Presented bv Annual Return Of. ..Companv, Limited, made up to the... snrerccrvsccnsresrernee BY Of evrmesssssssssimssssssssses L Qrersrns (being the fourteenth day after the date of the first or only General Meeting in 19... 1. Address of the registered office of the Company ‘-I TT ———————— 2. Total amount of the indebtedness of the Company in respect of all mortgages and charges of the kind which are required (or, in the case of a Company registered in Scotland, which, if the Company had been registered in England, would be required) to be registered with the Registrar of Companies under the Companies Act, 1020 COMPANIES (FORMS) ORDER qr Form No. 7—continued. 3. Particulars of the Directors (a) of the Company at the date of this Return :— The present Christian Name or Names and surname. (b) Any former Christian Name or Names Surname. Nationality, Nationality of origin if other han the present 1ationality). (4) Usual Residential Address. Other business occupation or Directorships € any. If none state so. (¢) fq Signatur State whether Director or “fanag.r v (a) “Director” includes any person who occupies the position of a Divby whatever name called, and any person in accordance with whose direction. or instructions the Directors of a Company are accustomed to act. (b) In the case of a Corporation its corporate name and vegister. principal office should be shown. (¢) In the case of an individual who has no business occupation but holds any other directorship or directorships, particulars of that directorship or of some one of those directorships must be entered. (4) Except where the company is an assurance company which has complied with the provisions of Section 7 (4) of the Assurance Companies Act, 190g, his return must include a written copy of the last audited Balance Sheet of the company as provided in Section 110 (3). 448 SECRETARIAL PRACTICE No. of Company... THE COMPANIES ACT, 1920. 7) Form No. 9. 4 55. Companies Registration Fee Stamp must be impressed here. PARTICULARS OF DIRECTORS OR MANAGERS AND OF ANY CHANGES THEREIN Pursuant to Section Name nn. of Company (ssn Presented bv Particulars of the Directors or Managers (a) Of... COMI. and of anv changes therein. The present Christian 1ame or names and Surname. (bh) ny former Christian ‘ame or \ames or arn Me Nationality. Nationlity of origin if other han the resent JNationalitv) Usual > agidential Address. Other Jusiness Dccupation or Directorships if any. if none tate so. (¢) Changes. {d) (Signature). (State whether Divector or Manager 07 SECYELAVY).mosommmmsiimssimins osssissin Dated the... rrrsnnnns SABY Of scrivssciiresmivisesmpsiinessoondl Goes eave (a) * Director” includes any person who occupies the position of a Director by whatever name called, and any person in accordance with whose divections or instructions the Directors of a Company are accustomed to act. (b) In the case of a Corporation its corporate name and registered ov principal office should be shown. (¢) In the case of an individual who has no business occupation but holds any other directorship ov divectorships, particulars of that directorship or of some ome of those divectorships must be entered. (d) A complete list of the Directors or Managers shown as existing in the last Particulars delivered should always be given. A note of the changes since the last List should be made in this column, e.g. by placing against a new divector’'s mame the words ‘in place of——," and by writing against any former divector's mame the words ‘‘dead,” ‘‘resigned.,” or as the case may be. COMPANIES (FORMS) ORDER No. of Company... THE COMPANIES ACT, 1929. NoTiCE oF INCREASE IN NoMiNAlL Caprr-Pursuant to Section Form No. 10. £93 Name of Company _ Presented bv To the Registrar of Companies versie - rrssnssmsssssessssssssssnnss COM PAILY yevvssrscesssssssssssoesneesssssssre hereby gives you notice pursuant to Section 52 of the Companies Act, 1929, that by (a)... Resolution of the Company dated the...conday Ofer IG the nominal Capital of the Company has been increased by the addition thereto of the sum of Lerrrreenersrenn beyond the registered Capital of £.. The additional Capital is divided as f.-11 Number of Shares _—l Share Nominal Amount of each Share. The conditions (e.g. voting rights, dividends, etc.) subject to which the new Shares have been or are to be issued are as follows ‘— (If any of the new Shares are redeemable or not.) Ei Shares stale whetles a. (Signatur (State whether Director or Manager or Dated the... CPV OL. (a) “Ordinary.” “ Extraordinary’ or ’* Snecial * 500 SECRETARIAL PRACTICE No. of Company... Form No. 11. THE COMPANIES ACT, 10209. NOTICE OF INCREASE IN NUMBER OF MEMBERS. Pursuant to Section 7 (3). Name [mmm of . Company |... Presented bv BRSASS ALARA SERENE B SAREE SAARI Notice of increase in the Number of Members Of... cme were svmennsnnessismmmesssessmssssnsnsssss GOTLDAIIY sree To the Registrar of Companies. er BEARERS NARRANESSIUNI ARETE IONIOtRaRtE sno SEOTIDHIIYS cums RE hereby gives vou notice, pursuant to Section 7 (3) of the Companies Act, 1929, that BY (@)..commmmsmmmmmsnn. RESOlUtION of the Company dated the..dav Ofcciciiinn Iu the number of Members in the Company has been increased by the addition thereto of... rere. Members beyond the present registered Number of... (Signature)... (State whether Divector ov Manager OF SECYELAVY)..... oo wwmoriomimmimssmmimsnsssssisssn Dated the... eesssrmmssssmsssssssrmssreessssesnldBY OF errerserrrscrnsrsisresssons TQersrriss (@) “Ordinary.” ‘Extraordinary’ or ‘‘ Special.” COMPANIES (FORMS) ORDER 501 No. of Company... THE COMPANIES ACT, 1929. Form No. 14 / ~N A 55. Companies Registration Fee Stamp must be impressed heyve CoNSENT TO TAKE THE NAME OF Pursuant to Sectior CXISTING COMPANY. Name of Compan Presentec Consent to take the name of an existing Compai To the Registrar of Companies. I (or We). being the Liquidator(s) o. re wr nw es HR isn cantte saree wee eee Limited a Company in the course of being dissolved, hereby, pursuant Section 17 of the Companies Act, 1929, and on behalf of the said Company, testify its consent to the Registration of a new Company hthe name otgnatu Dated ‘al To De La1C oo signed bv each Liguidator y t more than 502 SECRETARIAL PRACTICE No. of Company... THE COMPANIES ACT, 1929. { Form No. 135A. A 5s. Companies Registration Fee Stamp must be impressed here. MEMBERS’ VOLUNTARY WINDING-UP. RETURN OF FINAL WINDING-UP MEETING. Pursuant to Section 235 Name of Company In cases in which the Winding-up commenced before the 1st day of November, 1929, Form No. 15 should be used. Presented © Members’ Voluntary Winding-up. To the Registrar of Companies. LI (0F WEY spree cairn ce eR RR ERR ARCHER being the Liquidator(s) of... snr JSC OUNPRILY ymca have to inform you that a General Meeting of the Company was... held on pursuant to Section 236 of the Companies Act, 1929, for the purpose of having an Account (of which a copy is attached hereto) (b) laid before it showing how the Winding-up of the Company has been conducted, and the Property of the Company has been disposed of. and that (a) the same was done accordingly. no quorum was present at the Meeting. (Signature) (c)........ Dated the... GAY (a) Strike out that which does not apply. (b) The Copy account accompanying this Return must be authenticated oy the written signaturve(s) of the Liquidator(s). (¢) To be signed by each Liquidator if more than one. COMPANIES (FORMS) ORDER 502 Form No. 15B. No. of Company... cnn THE COMPANIES ACT, 1929. A 55. Companies Registration Fee Stamp must be impressed héve CREDITORS’ VOLUNTARY WINDING-UP. RETURN OF THE FINAL WINDING-UP MEETINGS OF MEMBERS AND CREDITORS Pursuant to Section Name of Company In cases in which th> Winding-up commenced before tk + da November, 1929, Form » 15 should be use” Presente ~ Creditors’ Voluntary Winding-up To the Registrar of Companies I (or We). i being the Liquidator(s) of... have to inform wv. rerereresssremsesreresereesssseonnn COMDADNY eon . . held on General Meeting of this Company was duly (a) summoned Tor the........... swsnrnssn kK BY A mmmisswmssssaining TQusmmiony, PRHISHANLE ta Section 245 of the Companies Act, 1929, for the purpose of having an Account (of which a copy is attached hereto) (b) laid before it showing how the Winding-up of the Company has been conducted and the Property of the Company has been disposed of. and that (a) the same was dor~ -~~cordingly; no quroum was “~~ °° the Meeting. (2) that a ™ -he Creditors held on i ¥ same = pursuant to Section 245 of the Companies Act, 1929, for the purpose of having the said Account laid before it showing how the Winding-up of the Company has been conducted and the Property of the Company has been disposed of, and that (a) the same was done i eord nr no quoTum w# nresent at Senate Dated the... (a) Strike out that which does not at (b) The Copy account accompanying ih. . by the written signature(s) of the Liquidator(s). (¢) To be signed by each Liquidator if move than or O autheniicatet 504 SECRETARIAL PRACTICE No. of Company... Form No. 17 THE COMPANIES ACT, 1929. APPLICATION BY AN EXISTING COMPANY FOR REGISTRATION AS A LiMmitep COMPANY, Pursuant to Section 325 Name of Company To be used in the case of existing Combanies desiving to be registered with Limited Liability. Presented bv APPLCAION DY nnocsssnsssioncssssmmnsesses sms. teers Company, for Registration as a Limited Companv under the Companies Act. 1020. remesmeemenen Company, CORBLHUIEA DF. mmm amis asasssismtmmmmmsmmm——————s—oss—5m. dated the ncroirreendBY OF ses serene desires to register itself as a Company Hmited Dy... under the Companies Act, 1929, by the name Of. Company, Limited, and, for that purpose, delivers the under-mentioned Documents for Registration under the said Act. (STERALUYE).....coooscrrreesressrrsrsirenrn (State whether Director ov Manager ov Secretary) .... rn Dated the........... . crnrresnssdld BY OF rrr TQ Documents delivered for Registration with the foregoing Application. I. COPY Of thes cs cerrenrccnssnnr sms senses sss ssssssssses sess constituting or regulating the Company. 2. List of the Members of the Company made up to the... AY Of mms ams DQ 3. Statement showing the Nominal Capital of the Company, etc. 4. List of the Directors or other Managers of the Company. 5. Copyresolution of the Company assenting to its registration asa Limited Company, and adding the word “Limited” to its name. B. DEClaTAtiON DY (@)..ocmmerccmmeessssneerosscrsrin cove sersssssesoss cov sores oorsssesssssossssessssssess assess of the Company, verifying the particulars set forth in the documents above mentioned. (a) This Declaration to be by anv two Directors or other princidal Officers of the Company COMPANIES (FORMS) ORDER No. of Company... Form No. 18. 508 THE COMPANIES ACT, 1929. APPLICATION BY AN EXISTING COMPANY FOR REGISTRATION AS AN UNLIMITED COMPANY. Pursuant to Section 323 Name of Company To be usec Present ~ n the case of existing Companies desiring to be registered withou Limited Liabil tv Application by. ress cece seas ris cee Lom~nr ; for Registration as an unlimited Company under the Companies / ~omn-~ constituted hy dated the revrssrssssssrs sss A AY i. a , desiree *n register itself under the Companies Act, 1929, and for that purpose ¢ >. ers the under mentioned Documents for Registration under the said Act (State whether Divector or Manager Dated the... (Signatr-- ap qv a BA Documents delivered for Registration with the foregoing Application 1. Copy of the... pum wm eerste eens sree constituting or regulating the Company. 2. List of the Members of the Commnany made up to the... day of... .. ~y IQ. 3. Statement of the Registered Office of the Company. 4. List of the Directors cr other Managers of the Company. 5. Copy of resolution he Compan =ssenting ° Registration. 6. Declaration by (a) .. of the Company verifying -ocuments above mentioned Jy (a) This Declaration to ve by any two Directors or othe: of the Combanv srincipal Officers 3.5 No. of Company... THE COMPANIES ACT, 1929. SECRETARIAL PRACTICE REGISTRATION OF AN EXISTING COMPANY. List or MEMBERS. Pursuant to Section 323 Form No. 19. 4 5s. Companies Registration Fee Stamp must be imbressed here. Name of Company (. Presented bx List OF MEITDOIS OF ...iicmmmsssrrssssasssssssssrbivsisssssssssibsssosssisesstsssivssscsssssssssisss aos esissss sss ssossmss cresrsssssrsnsrssssssosssssmsssasssssssnisseisionns GOTIUDAILY, coosussssssossssssssossssasssssess made up to the (a)... @Y Of oseecsessssrrissnrmerscsnrsssssesssssssssisns TQuuasssssen Surname. Christian name. Address. Occupation. Number of Shares, or Amount of Stock, held. Distinctive Numbers of rhe Shares (if anv). (STENRABUYE).ccccrserrerrrseisesssssssssmsssssisssssrsnsinss (State whether Divector or Manager OF SECYELAYY)...ommmimmmmsssismsmss Dated the... corrmnnnresssssersirnesnsld BY OF eenrcennerecnrecsssasssssssssmnirrines I Qe fa) Not more than six clear days before delivery for Registration. {To be signed and dated «t rz ex COMPANIES (FORMS) ORDER No. of Company... Form No. 21 30; THE COMPANIES ACT, 1929. REGISTRATION OF AN EXISTING COMPANY AS A LIMITED CoMPANY STATEMENT OF NOMINAL CAPITAL, ITS DIVISION INTO SHARES, THE NUMBER OF SHARES TAKEN AND AMOUNT PAID THEREON, OR THE AMOUNT OF STOCK OF WHICH IT CONSISTS, ALSO OF THE NAME AND REGISTERED OFFICE oF THE COMPANY. Pursuant to Sectior Name of Compar Presente Amount of Nominal Capital "i Number of Shares into which it is divided, and amount of each Share — . Number of Shares taken up to the sss OY Con, 19nd) Amount paid on each Sher Amount of Stock Mich qists Name of the Com} Registered Office “imited (Sienatur (State whether Director or Manager or Secye. Dated the. la, Not more than < a clear davs ovefore at ££ re Reeoistyation. 308 No. of Company... SECRETARIAL PRACTICE Form No. 22. THE COMPANIES ACT, 1929. REGISTRATION OF AN EXISTING COMPANY AS A LiMiTED COMPANY. Cory RESOLUTIONS ASSENTING TO REGISTRATION WITH LIMITED LIABILITY Pursuant to Sections 321 (1) (v) and (vii) and 323 (3) (d). Name [msm of x Company | umn Presented + Copy Resolutions passed at a General Meeting Of... held on the... oo. creerriennesenlBY O- rr + srrerrmeressnsssssmssssosssssonssssses T Qrssstsses assenting to its being Registered with Limited Liability. (The Resolutions to be written ov printed herve.) LGOOome env (Signature) ‘State whether Divector ovr Manager or Secretary.) COMPANIES (FORMS) ORDER No. of Company... 509 Form No. 23 THE COMPANIES ACT, 1929. REGISTRATION OF AN EXISTING COMPANY. DECLARATION VERIFYING DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES WITH APPLICATION FOR REGISTRATION. Pursuant to Section 325. Name of Compan: Presente: We.oooeereasean 3 SS 2D 4 («A of ......... rersssersessnsmannestmnen reruns basses sass stmaenee being two... OF th€eoeoo nf cress rien COMPANY, coe Do solemnly and sincerely declare that the particulars set forth in the several documents accompanving this Declaration, and marked respectivelv with the letters oe. eres stata senses sets nasssssssssssssssninnnenesnnnenene LTE true; And we make this solemn Declaration conscientiously believing the same to be true, and by virtue of the provisions of the *‘ Statutorv Declarations Act, 1825." Declared -. the. “Vol. ne thongs nine hundr before me A Commissioner (a) To be signed by two or more Directors or other principal Officers (b) or Notary Public or Justice of the Peace. SECRETARIAL PRACTICE COMPANIES ACT, 1929. STATEMENT OF PLACES OF BUSINESS OF BANKS. Pursuant to Section 361. To be attached to the Annual List of Members of all Banking Companies to which the provisions of the Companies Act, 1929, ave applicable. Form No. 24 Statement Pursuant to Section 361 of the Companies Act, 1929, of the Names of the several places of business of... reer With the Counties in which they are situate. address. Countv. (STERAIUYE) conve errr rrrerrecsran (State whether Divector or Manager 0F SECVELATY).. emmemmsessississssees. Dated the... dav of eT Qn, To ar 7 rot ut the ena. No. of Compan~ COMPANIES (FORMS) ORDER THE COVTANIES ACT, 19209. 7 ( ~N - J Form No. 28 A 55. Compantes Registration Fee Stamp must be impressed here NoTICE oF CONSOLIDATION, DIvisioN, SUB-DIVISION, OR CONVERSION INTO STOCK OF SHARES, SPECIFYING THE SHARES SO CONSOLIDATED, DIvIDED, SUB-DIVIDED, OR CONVERTED INTO STOCK, OR OF THE RE-CONVERSION INTO SHARES OF STOCK, SPECIFYING THE STOCK SO RE-CONVERTED, OR OF THE REDEMPTION OF REDEEMABLE PREFERENCE SHARES OR OF THE CANCELLATION OF SHARES (OTHERWISE THAN IN CONNECTION WITH A REDUCTION OF SHARE CAPITAL UNDER SECTION 55 oF THE COMPANIES ACT, 1929). Pursuant Name of Compa Presen? To the Registrar of Companies hereby give you notice ‘n accordance with Act, 1929, that (State whether Direcior o Ll GELY 7% .. Company, Limited. Section tv nf the Companies Dated the 512 No. of Company... SECRETARIAL PRACTICE Form No. 29. THE COMPANIES ACT, 1929. ’ N A 5s. Companies Registration Fee Stamp must be imbressed here. NOTICE OF THE SITUATION OF THE OFFICE WHERE A DOMINION REGISTER IS KEPT OR OF ANY CHANGE IN, OR DISCONTINUANCE OF, ANY SUCH OFFICE. Pursuant to Section 1.2 Name [cnn of Company (msm Presented bv To the Registrar of Companies. —eruepastan Sst a i —— Company .. esamnseassaene hereby gives you Notice in accordance with section 103 of the Companies Act, 1929, and by the authority of (a)... that a Branch Register is Now Kept ato { SIEBGIUIE)..onmimmmonismmmimmisssiminrens (State whether Divector or Manager OF SeCVELAVY)..meemseeeesesssmsessones Dated 1he.ommummmsmmesmmmammamminll BY Ohm ws Tums (a) e.g.. ““a special Resolution of the Company, duly passed on the rrvrresinisld AY OF ererrerireennrccsrssnsssssssseesnssssmssesssssisssenssssnney OF ClauS.mrenn rere 0f the Company's Articles of Association.” (6) In cases of change the words ‘in lieu of” and the previous addyvess should be inserted aftev the present address. In case of discontinuance strike out the words ‘‘is now kept’ and insert the words ‘‘is discontinued’ after the address. No. of Compans COMPANIES (FORMS) ORDER Form No. 39. 5173 THE COMPANIES ACT, 1929. ( A A 5s. Companies Registration Fee Stamp must be impressed here. “aYSUG. Name of Comp Presen Windin, 34 LCOUL To the Registrar ot Companie [ (or WwW hereby give you Notice that, by an Order dated ine .day ui {or we) have been appointed Liquidator(s) of Company Tim é Drgnatu Dated the... (a) To be signed hv each Liguidatoy r more than 314 SECRETARIAL PRACTICE No. of Company... THE COMPANIES ACT, 1920. © Form No. 398. 4 5s. Companies Registration Fee Stamp must be imbressed here. MEMBERS’ VOLUNTARY WINDING UP. DECLARATION OF SOLVENT: Pursuant to Section 220 Name resssesaeseereenees of J Company {_.. Presented ==Declaration of Solvency. being (B)eerreeremeneessssssssme———————————— | eC OTS OF eee eee ooe esses ees ares tease A ERASER RRR ARES ERE RRS nnn — eee nen essen COMPANY, Limited, Do solemnly and sincerely declare that we have made a full enquiry into the affairs of this Company, and that, having so done, we have formed the opinion that this Company will be able to pay its debts in full within a period, not exceeding twelve months, from the commencement of the winding up, And we make this solemn Declaration, conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1835. Declared at... oe ee etsos sates s asa asaes atast ara seeaseseaas bossa SRSA ab H ROR ceed @Y On - one thousand nine hundred and........ before me. A Commissioner for Oaths. (b) (a) “all the” or “the majority of the” as the case may be. (6) or Notary Public or Tustice of the Peace. COMPANIES (FORMS) ORDER No. of COmMPaANY....mrrsssenr ssi TIE COMPANIES LCT, 1929. { N\ MEMBER:. VOLUNTAP" NOTICE OF APPOINTMENT TTYNDING Lv 3 TTT STOT 515 Form No. 39c. A 55. Companies Registration Fee Stamp must’ be impressed here. Pursuant ' Name of Commn-Present To the Registr. I (or We). © wimnanie ~ antary Winding J, hereby give vou notice that I {or We) have been appointed Liquidator(s o) bv (a) Resolution of the Comvpanv. dated the... YY nal ....Company, Limited cnndav of Dated the. (a) State how appointed, whether otherwise, and adapt if necessary. (6) To be signed bv each Liquidator 1 mor. Lier y 1. non 516 SECRETARIAL PRACTICE No. of Company... THE COMPANIES ACT, 1929. Form No. 39D. ( 4 55. Companies ) Registration Fee Stamp must be impressed here. CrEDITORS’ VOLUNTARY WINDING UP NOTICE OF APPOINTMENT OF LIQUIDATOR. Pursuant to Section 250. Name [women of COMPANY | wnmmwmemmummmmunsmss Presented bv Creditors’ Voluntary Winding Up. To the Registrar of Comopanies. I (0F WE. eereessssssssssssssommsaneres OF ssresssteessereseesssmsssessessess esses ses sesesseeesesssessemmammenns hereby give notice that I (or We) have been appointed Liguidator(s) nf Company. Limited by (@) eo, (Signature)... (7) reeereessersssssisssssssssos I Qrsisersens (a) State how appointed, whether by the Creditors of the Combany ov how otherwise. (BY To be signed by each Liquidator if more than one. Dated the... ~ COMPANIES (FORMS) ORDER 514 Form No. 41. No. of Company... mmm. THE COMPANIES ACT, 1929. ral 7’ 9) A 5s. Companies Registration Fee Stamp to beim pressed here. DECLARATION OF COMPLIANCE WITH THE REQUIREMENTS OF ° THE COMPANIES ACT, 1929, ON APPLICATION FOR REGISTRATION OF A CoMPANY Pursuant to Section 15 (2) Name of Compar Present: Io) Do solemnly and sicerely declare that I am (a). esses nasa sssnat ae sesso ase rb nes basssssniensosssass «cos msmsesssssaatsensesssnssinsanssins | ceemmsseneeseerennnnnnenne | Lol IMITEA, And that all the requirements of the Companies Act, 1929, in respect of matters precedent to the registration of the said Company and incidental thereto have been complied with, And I make this solemn Declaration conscientiously believing the same to be true and by virtue of the orovisions of the ‘‘ Statutory Declarations Act, 1825.” Declared at... .. rere wes QAY OF rt smeeenODI€@ thousand nine hundred and... before me the .. A Commissioner for Oaths. (b) (a) “A Solicitor of the Supreme Court” (or tn Scotland ‘‘an Enrolled Law Agent”) ‘““engaged in the formation,” or “A person named in the Articles of Association as a Director or Secretary (6) or Notary Public or Justice of the Peace. 518 No. of Company... THE COMPANIES ACT, 1929. SECRETARIAL PRACTICE CO) Form No. 42. 4 5s. Companies Registration Fee Stamp to be imbressed here. CONSENT TO ACT AS DIRECTOR OF A COMPANY. Pursuant to Section 140 (1) ‘a) Name comin; of [ 076301 oT:3 1} Presented bv PRESET RAURI RATER RAR RT TARA To the Registrar of Companies. I.(or We), the undersigned, hereby testify my or'our consent to act as director of eter R RSS 1148 Ab ARERR RRA RRR ERR SEER RRA en Assen RRRS ene AR RRR srs sr ss bRa sss ssttnssasensonansnnrmeenenenenerenns | LATIN EEC pursuant to Section 140 (1) (a) of the Companies Act, 19249. Signature. (a) Address. Description. Dated the... QAY OLevvsesmsssssssessossssssoos I Qeerresran (a) If a divector signs by ‘‘ his agent, authorised in writing,” the authority must be produced. COMF .NIES (FORMS) ORDER STC No. of COMPANY ..mmmrrsornrrreriinee THE COMP .INIES Form No. 43. ACT, 1029. / N, A 55. Companies Registration Fee Stamp must be impres~-d here. LIST OF THE PERSONS WHO AVE COM" 1 ART a TEV" DIRECTORS [&)Y Pursuan. ‘ection Name of Company Presented List of the persons who have consented to be Directors ox ae oe . en wee. Limited, delivered to the Registrar of Companies. pursuant to Section 140 (3) of the Companies Act. 1020. hv. the Applicant(s) for 7*-tistration of the Memorandum and Articles o: the Companv SUTRA E Christian Name Address and Description, [Signature of Advdlicant(s) |... Dated the. 520 No. of Company... eee THE COMPANIES ACT, 19209. SECRETARIAL PRACTICE Form No. 44. A 55. Companies Registration Fee Stamp must be impressed here. DECLARATION THAT THE CONDITIONS OF SECTION 94 (I) (A) AND (B) OF THE COMPANIES ACT, 1929, HAVE BEEN COMPLIED WITH. Pursuant to Section 94 (1) (c). (To be used by a Company which issued a Prospectus on ov with refevence to its formation.) Name [eevee of COMPANY | cnnrrmsmmsrsimsssssunsssssnsses-Presented bv DEINE (B) coroirerrrerrserrsesssmsssmesss sissies sss sess sssssssssssssssssssomsssisssnss. OF swan % reer ARE nents n sss snss senses sss ssn sssssesnssennsessssnenssonensnes | La TTIIEEd, do solemnly and sincerely declare:— That the amount of the share capital of the Company offered to the public for subscription iS £m, That the amount stated in the prospectus as the minimum amount which, in the opinion of the directors must be raised by the issue of share capital in order to provide for the matters specified in paragraph 5 in Part I of the Fourth Schedule to the Companies Act, 1929, iS fueron That shares held subject to the payment of the whole amount thereof in cash have been allotted to the amount of fm, That every director of the Company has paid to the Company on each of the shares taken or contracted to be taken by him and for which he is liable to pay in cash, a proportion equal to the proportion payable on application and allotment on the shares offered for public subscription, And I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1835. Declared at .oineiesineeesenens ERE coorerrrrrrrernrnrsssssesesssesesnecens sssnnssens QAY OF eres sereeessenessesneemesmreesesesesesnnnee. O11€ tOUSAN nine hundred and... before me A Commissioner for Oaths. (8) (a) ‘‘the Secretary,” or ‘“‘a Director.” (6) or Notarv Public or Tustice of the Peace. COMPANIES (FORMS) ORDER THE COMPANIES ACT, 1929. No. of Company.. > 4 Form No. 44A. a] A 5s. Companies Registvation Fee Stamp must be impressed herve DECLARATION THAT THE PROVISIONS OF SECTION 94 (2) (b) OF THE COMPANIES ACT, 1929, HAVE BEEN COMPLIED WITH. Pursuant to Section 94 (2) (c). To be used by a Company which has delivered to the Registrar of Companies a Statement in lieu of prosbectus Name of Compan Presente nt being (a) .... “ Limited do solemnly and sincerelv declare:— That every Director of the Company has paid to the Company on each of the shares taken or contracted to be taken by him and for which he is liable to pay in cash, a proportion equal to the proportion payable on application and allotment on the shares payable in cash. And I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1835. Declared «i the Top. nine hundbefore me (a) “Tu (b) or =. a wnrector. Notary Public or Tustice of the Peace. 322 SECRETARIAL PRACTICE No. of Company... Form No. 45. THE COMPANIES ACT, 1929. RETURN OF ALLOTMENTS from the (B) oreceemrncensinnsessssmanees sess nenssessssrene OF osreb sss sistas sess sssenssnnes [Qe tO the... ever OF of ly ’ y h 4 5s. Companies Fee Stamp to be impressed here. Name of. Company 1 RT Pursuant to s. 42 (1). (b) Number of the Shares allotted payable in cash Number of the Shares allotted payable in cash Nominal amount of the Shares so allotted tt eer ———————————— Nominal amount of the Shares so allotted BW Amount paid or due and payable on each such Share ‘a os ; 4 we 5 a“ Amount paid or due and payable on each such Share .. .. .. i. .. .. Number of Shares allotted for a consideration other than cash .. .e .s .. .. Nominal amount of the Shares so allotted ,.. Amount to be treated as paid on each such Share ......... mn. The consideration for which such Shares have been allotted is as follows :— (a) 1. When a veturn includes several Allotments made on different dates, the dates of only the first and the last of such Allotments should be entered at the top of the front page, and the vegistration of the return should be effected within one month of the first date. When a return velates to one Allotment only, made on one particular date, that date only should be inserted, and the spaces for the second date struck out and the word ‘made’ substituted fov the word ‘‘ from” after the word ‘‘ Allotments.” (b) Distinguish between Preference. Ovdinary, Redeemable Prefevence, etc. Presente. COMPANIES (FORMS) ORDER ~ [3 ~ Form No. 45-—continued. Names, Addresses, and Descriptions of the Allottees. Number of Shai:-allott-- Christian Name. .ddress. Description hou en - ay cinds Ddlgna, (State whether Director ov Mac y 524 SECRETARIAL PRACTICE No. of Company... THE COMPANIES ACT, 10929. Form No. 47. C) PARTICULARS OF A MORTGAGE OR CHARGE CREATED BY A COMPANY REGISTERED IN ENGLAND. Puysuant to Section 79. Name enabtsestsssass SASS AAA RAT of / Company | ow - - - - yc The fee payable on registration of a Mortgage ovr Charge is 10s. if the amount secured does not exceed £200, and £I if it exceeds £200. Presented bv PEPE ern Ee sae aNes TIERONE tsi uaRsentIeanIeriRaoREnIURItatereeneOtetiuIIIOrIteeY Particulars of a Mortgage or Charge Created DV... a ried. & COMDINY temlstared ir rm -_ 1) 15) 12) (4) (5) Amount or rate per cent. of the Commission, Allowance or Discount (if any) paid or made either directly or indirectly by the Company to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, or procuring or agreeing to procure -ubscriptions, whether absolute or conditional, for any of the Debentures inclnded in this Return. (5) Date and description of he instrument creating or svidencing the Mortgage ~~ rharge. fo Short particulars of ‘he Property Mortgaged or Charged. Names, Addresses & Descriptions of the Mortgagees or Persons entitled to the charge. Amount secured by he Mortgage or Charge. (Signature)... wv. copreseesbbere AAAS (Designation of position in relation to the COMPANY)... covrrsrrisnerssssesmssissesansssssrs Dated the. cere AY OF resins IQs (a) A description of the Instrument, e.g. “Trust Deed.” “Mortgage,” ‘““ Debenture,’’ etc., as the case may be, should be given. (b) The rate of interest bavable undev the tevms of the Debentures should not be entered. COMPANIES (FORMS) ORDER gra [VEEN Form No. 47a. No. of Company... THE COMPANIES ACT, 1929. ) | See below. PARTICULARS OF A SERIES OF DEBENTURES CONTAINING, OR GIVING BY REFERENCE TO ANY OTHER INSTRUMENT, ANY CHARGE, TO THE BENEFIT OF WHICH THE DEBENTURE EF OLDERS OF THE SAID SERIES ARE ENTITLED PARI PASSU, CREATED BY A COMPANY REGISTERED IN ENGLAND. Pursuant 20 Section ~~ Name of Company SE REIEIE st ontet essen tute att $0400 S0uA The fee payable on the registration of these Particulars is 10s. if the amount of the whole series does mot exceed £200, and £1 if it exceeds £200. This Form (No. 474A) is to be used for registration of Particulars of the entire series. When more than one issue of Debentures in the series is made, Particulars of each issue subsequent to the first should be sent to the Registrar on Form No. Presented by Particulars of a series of Debentures created by Limited, a company registered ir Epalan d. 1) 2) 2) Total amount secured by the whole series. Amount of the present ssue of the series. Dates of Resolutions wuthorizing the -ssue of the series. {Designation f (....... Dated tL (a) The rate be enteved. r 4 4) Date of the Covering Jeed (if anv) by which the security is created or defined; or, if there is no such Deed, the date of the irst execution of any Debenture of the ceries Tre “t1om 1. 'g) General descrip :ion of the Propert r~harged 16) Names of the [Trustee if any) ‘or the “Jebenture nolders (7) Amount or rate per cent. of the Commission, Allowance x Discount (if any) paid or made either directly or indirectly by the Company to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any of the Debentures included in this Return, (a' ly “uld no 326 SECRETARIAL PRACTICE No. of Company... THE COMPANIES ACT, 1929. Form No. 47B. ( See below. PARTICULARS OF A MORTGAGE OR CHARGE SUBJECT TO WHICH PROPERTY HAS BEEN ACQUIRED ON OR AFTER IST NOVEMBER, 1929, BY A COMPANY REGISTERED IN ENGLAND. Pursuant to Section Name of Company _ gpa - ow aww wenn The fee payable on registration of a Morigage or Charge is 10s. if the amount secured does not exceed £200, and £1 if it exceeds £200. Presented ~ Particulars of a Mortgage or Charge subject to which property has peen acquired on or after 1st November, 1929, by... ii Limited a company registered in England. (1) Date and description of the instrument creating or evidencing the Mortgage or Charge.(a) (2) Date of the aciaisition of the Pronerty. (3) Amount owing on ‘ecurity of the Mortgage or Charge. (4) Short parti-:ulars of the Property Mortgaged or Charged. (5) Names, Addresses and Descriptions of the Mortgagees or Persons entitlad to the charge. (Signature)... (Designation of position in relation to the Company)... evsmarsssesssssnsssess I Qorresrssn (a) A description of the Instrument, e.g., ‘Trust Deed,” ‘‘Mortgage,” ‘“Debenture,’’ etc., as the case may be, should be given. A copy of the Instrument, certified as prescvibed in paragraph 4 of this Order. must be delivered with these Particulars. Dated theses COMPANIES (FORMS) ORDER 2% No. of COMPANY... cmon ™"E COMFANIES ACT, 1929. Form No, 47c, A 55. Companies Registration Fes Stamp must be impressed herve. CERTIFICATE OF REGISTRATION IN SCOTLAND OR NORTHERN IRELAND OF A CHARGE COMPRISING PROPERTY SITUATE THERE _ < re Duysuant Name of Comr nN. - civ; RT LL. c* >f being (a) .. hereby certify thof which a true . on chare lereto was presented for registration Sienature)... (a) This certificate must be given by a Director or Secretary of the Company or by a person intevested in the charge otherwise than on behalf of the Company or by a Solicitor acting on behalf of the Company or of some person so interested as aforesaid. The capacity in which the certificate is given must he stated (0) Give date and parties to charge. (c) State description and situation of office of veoistration. 528 No. of Company... THE COMPANIES ACT, 1929. SECRETARIAL PRACTICE Form 48. 4 55. Companies Registration Fee Stamp must be impressed herve. PARTICULARS OF AN ISSUE OF DEBENTURES IN A SERIES BY A Company REGISTERED IN ENGLAND, Pursuant to Section 79 (8). Name [memes of ¢ Company mmm wed SRA TUEA RAGE N NOM RTIAN EOSIN For registration of the entive sevies Form No. 474A must be used, Presented by LIIITT TTT oe Particulars of an Issue of Debentures in a Series when more than one issue in the series is made bv ress LALA, a company registered in England. (rv (2) (2) Particulars as to the amount or rate per cent. of the commission, allowance, or discount (if any) paid, or made, either directly, or indirectly, by the Company, to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any of the Debentures included in this Return (a). Date of present issue. Amount of present issue (Signature)... sor (Designation of position in relation 0 the COMPANY). cssivesns Dated the... a. wrrrrrreenBY OF osssvrsse coresriersenssssessseess IQuunrsssraeerren (a) The rate of interest pavable under the terms of the Debentures should not be enteved. COMPANIES (FORMS) ORDER No. of Company... THE COMPANIES ACT, 1929. 52¢ Form No. 49. (No Revenue Stamp * duty charer-zble.) DECLARATION VERIFYING MEMORANDUM G. * ATISFACTION OF MORTG? == OR CHARG? Pursuant 0 Spt - Name of Company Presented We, oes. a Director of. And eee, Lo) SR the Secretary thereof. . ....... rennet eee eset ene do solemnly and sincerely declare that the particulars contained in the Memorandum of Satisfaction annexed hereto and dated the...........day Lo) wissen I Queene, @r€ true to the best of our knowledge, information and belief, And we make this solemn Declaration, conscientiously believing the same to be true, and by virtue of the provisions of the ‘‘Statutorv Declarations Act, 1835.” Declared at... the.......dav Of — anne ON€ thousand nine hundred and... before me a Commissioner for Oaths. (a (a) or Notarv Public or Tustice of the Peace. J SECRETARIAL PRACTICE Form No. 49—continued. Memorandum of Satisfaction of Mortgage or charge. 4 5s. Companies Registration Fee Stamp must be imbressed herve. emptos dd bbit nanoda banssaddavetvatdvsdesddndnusnnaturen hereby gives notice that the registered charge being (Bb)... ome 9998 8am nnn ronda eB Esa a Yee e yoo nes eR EaanTIea sna NE ED EetsE rene edNaset nana dantensy0o sna rieaneentass srernede00is beotss Feerne REtNIR NIE iaars Taerer ROstesssteirtaRenialag of which Particulars were registered with the Registrar of Companies on ERC.rrcesssessssssreaend BY OF soeeressitesentonsstimmssimssstisssssssnons Tunis. Was satisfied on the cmrernenniAAY OFcorvsineeeensseeattissstosssssiisimntion IT Quins. £0 the eXtent Of [n witness whereof the common seal of the Company was hereunto affixed the. dAV OF iiss. JT Qornresnonss oo __swesusiwpenaawumneapiddnng Directors. (> een Secretary. (b) A description of the Imstrument(s) creating ov evidencing the charge, 2.., ‘‘Mortgage,” ‘“Charge,” ‘‘Debenture,” efc., with the date theveof should be given. If the vegisteved charge was a '‘ Series of Debentures,” or *“ Debenture Stock,” the words *‘ authorised by Resolution.’’ together with the date of the Resolution should be added. COMPANIES (FORMS) ORDER No. of COMPANY .mrimmmmsamessssssesne TIE COMPANIES ACT, 1929. ( AN PARTICULARS O1 NTR ~ Trae Puysuav - at a «' 531 Form No. 52. A 55. Companies Registration - Fee Stamp must be impressed herve. Name of Company The particulars must be stamped with the same stamp duty cs wou have been payable if the Contract had been reduced to writinc Present: Particulars of Contract relating paid up otherwise than in cash bv... to Shares allotted 1) The number of shares allotted as fully or partly paid up otherwise than in cash (2) The nominal amount of each eich share (3) The amount to be considered as paid up on each such share otherwise than in cash (4) If the consideration for the allotment of such shares is services, or any consideration other than that menrioned below in part 5, state the nature of such consideration, and the number of shares so allotted. - ony 3 SECRETARIAL PRACTICE (5) If the allotment is made in satisfaction or part satisfaction of the purchase price of property, give a brief description of such property, and full particulars of the manner in which the purchase price is to be satisfied. Form No. 52—continued. (x) Brief description of property. (2) Purchase Price ‘a) Total amount considered as paid On ore. Shares allotted otherwise than in cash. (b) Cash. £ (d) Amount of debt £ released or liabilities assumed by the purchaser (including mortgages on property acquired). Total purchase price la (6) Give full particulars, in the form of the following table, of the property which is the subject of the sale, showing in detail how the total purchase price is apportioned between the respective heads: — Legal Estates in Freehold Property and Fixed Plant and £ sd. Machinery and other Fixtures thereon (a)... Legal Estates in Leasehold Property (a). sr ————— Fixed Plant and Machinery on Leasehold Property (including Tenants’, Trade, and other Fixtures) .... ceessessassssrenn Equitable Interests in Freehold or Leasehold Property (a)... Loose Plant and Machinery, Stock-in-Trade. and other CHhatinols [D) wom osmosis Goodwill and Benefit of Contracts me wn coven Patents, Designs, Trade Marks, Licences, Copyrights. &c.... Book and other Debts cee cee een esis snnkRRRIEAS Cash in Hand and at Bank on Current Account, Bills. Notes, Cash on Deposit at Bank or elsewhere... momo: Shares, Debentures and other investments... mmm DthET DIODEIEY, VIZ. ooo ienosseesssssssssssssssseesessemsseeesaestsmssssssssssssasss sasssassssssssosssonsc=(STENALUE) coors sr rssssssssssssssssssssssssssnsn [State whether Divector or Manager 0F SeCYELAYY)unmomimimin rrmmssssmssminn Dated the cerenneBY Of srsirsrmrsssssnsinnsscsssssssssrsssssssssenss T Quvsssnsann (a) Where such properties are sold subject to wmovigage, the gross value should be shown. (b) No Plant and Machinery which was not in an actual state of severance on the date of the Sale should be included under this head. COMPANIES (FORMS) ORDER No. of Company... nnn 333 Form No. 53. A 55. Companies Registration Fee Stamp must be tmbressed Bere. Name of Company Presented THE COMPANIES NOTICE OF APPOINTMENT OF A REC - _IL Pursuant to Section ~~ ' ~ - -— To the Registrar of Companies. | PREETI RIN TTR RAT RE SRO RSR PPR SRY ~~ rewnt "SSAA DOBLERINI OF erences snes ssssessmeenessseessosssstseeeeeeseesssssseeeeeeee oo with reference tO... wo. Limited hereby give notice that: — (a) I have obtained an Order of the (5)... ee dated the........dav of... __ OF erences esses esses ssssssesessn. AS (C)rrerrnrsmsriensssrmmssessesssssresssssns ooo (a) On the...day Of, IQ... for the appointment o Pru Tr E OSAMA IIE SOOT PP RSA PU RSLs PET EAR ARE Eo. wrrrnnnennnOf the Property of this Company, corms: I Queene. appointed Mr, wf on eres BS (C) -...0f the property of this Companv under the powers contained in an instrument dated (4)... _ (Signature)... Dated the... (a) Of these two paragraphs strike --. (8' Name of Court making the (¢) “Receives” or “Manager: Manager’ as the case may be. (4) Descri* "I, the instrument under which appointment is made. 534 SECRETARIAL PRACTICE No. of Company... THE COMPANIES ACT, 1920. / \ ) Form No. 54a. A 5s. Companies Registration Fee Stamp must be impressed heve. Particulars of charges created and charges on property acquired before the 1st day of November, 1929, by a Company registered in England. Pursuant to Section ~ Name of Company Presented b+ CO NEESEN ONES EPEe EN eNeL seta A INET EIEN ePeOERENIIarNE Lane Particulars SUDDUEA DV... tosses sree isin SARI AA rr nn sar eS A ths sass rise iwi LATALEA, A company registered in England (A) of Mortgages or Charges created by the Company before the 1st November, 1929, and remaining unsatisfied at that date which would have been required to be registered under the provisions of paragraphs (g), (4) and (z) of Subsection (2) of Section 79 of the Act if the Mortgages or Charges had been created on or after that date; and (B) of Mortgages or Charges to which any property acquired by the Company before the 1st November, 1929, is subject and which would have been required to be registered under the provisions of Sec. 81 of the Act if the property had been acquired on or after that date. (1) Date and description of the instrument creating or evidencing the Mortgage or Charge. (a) Date of acquisition of ‘he Property. (Bh) {3) Amount owing on the security of the Mortgage or Charge at the 1st day of November. 1020 4) Short Partisulars of the Property Mlortgaged or “hareced. {=} Names, Addresses and Descriptions of he Mortgagees or Persons entitled to the Charge. ALT (Designation of position in velation 10 the COMPANY). svssssrie Dated the... w— wendy Of... cecersamsresssssssssssssssssssssrrsssss T Queannsensnon (a) A description of the Instrument, e.g., ‘‘ Trust Deed,” ‘‘Mortgage,” “Debenture,” efc., as the case may be, should be given. (0) This column should be completed only when the Mortgage ov Charge is a Mortgage or Charge to which the Proberty was subject when acquived by the Company. COMI'ANIES (FORMS) ORDER Form No. 57, No. of Company... THE COMPANIES ACT, 1929. (No Registration Fee payable.) AND PAVMENT™-RECEIVER OR MANAGER'S ABSTRACT OF RECF™™~¢ Pusuant to Sectirv vv Name of Company Name and Address of Receiver or Manager Date and description of security containing the powers under which Receiver or Manager is appointed. Period covered by the Abstract. Presented IT roe Brought forwarc The receipts and payments must severally be added up at the foot of each sheet and the totals carried forward from one abstract to another without any intermediate balance so that the gross totals shall represent the total amounts received and paid by the Receiver or Manager since the date of appointment. Carried forwar Dated the. 'Sionature rr A~-ry - 7 SECRETARIAL PRACTICE Form No. 57a. No. of Company... THE COMPANIES ACT, 1920. A 5s. Companies Registration Fee Stamp must be impressed herve. NOTICE OF CEASING TO ACT AS RECEIVER OR MANAGER. Pursuant to Section 86 (2) Name [ messes of ’ COMPANY | cuvvussvsesnremsrssmsmmssssssesnsn Presented bv SINE E OAR EOIN ERIE Ratt rete EERE BEEN IN RNIN ARIES NEN Isses tenes To the Registrar of Companies. ly sami AeA gRI~~ARPtRIV RII ICA naEgradttananannta hereby give vou Notice that I ceased to act as Receiver and/or Manager of Mbssampicncigapradonanadddoretiansatiostodnoy. ven. Company. Limited. ON themed AY OF cooreeeeeeeeeeeeeersesseseseemseeseseesseseesemseseeseeen T Qos Dated the... (STLENATUFE) cnersrereeeinenssenreresnseesssssssessssmssssessssssmssssesenn COMPANIES (FORMS) ORDER 53’ Form No. 58. No. of Company... THE COMPANIES ACT, 1929. 7 3 4 55. Companies Registration Fee Stamp must be imbressed herve STATEMENT OF THE AMOUNT OR RATE PER CENT. OF THE COMMISSION PAYABLE IN RESPECT OF SHARES AND OF THE NUMBER OF SHARES WHICH PERSONS HAVE AGREED FOR A COMMISSION TO SUBSCRIBE ABSOLUTELY. Pursuant to Section 43 (1) (c) (ii) and (d). Name of Compar. Presente. Name of Company ... Tne Article of Association authorising Commission. Particulars of amount payable as Commission for subscribing, or agreeing to subscribe, or for procuring or agreeing to procure, subscriptions for any shares in the Company; or, Rate of such Commission... Date of Circular or Notice (if any), not being a prospectus, inviting subscriptions for the shares and disclosing the amount or rate of the Commission .. Number of shares which persons have agreed for a commission to subscribe absolutely. Toy Rat: Ce NF (Signatures of all the Director: or of their agents authin wuritivr-Dated the Date of Regisration. Serial Tumber Charge n this Index. ~HRONOLOGICAL INDEX of Charges entered in the Register. Debentures ‘Number' Amount of Date of Name of Company ot Com-j Mortgage | Trust panv. lat Charge... Deed. Other Mortgages, &e. First [ssue. Further Issues. By whom Registered. Fee Paid S. No. go. Remarks wm Ww Or J C ( Ca t = — > — ~C = > & a No. of Company... REGISTER of Mortgages and Charges. and of Memorandums of Satisfaction of No. 91 Limited. Date of Registration Serial Number of Document on : (3) (4) ' (¢) Date of Creation Date ofl Amount of each the secured Mortgage acquis: by the orChargel tion Mortand of the gage Descrip- Pro- | or tion perty. Charge thereof. (6) Short particulars of the Jroperty Mortgaged or “harged. a) Narnes of the Mortzagees or Persons :ntitied to the _harge. Particulars relating to the issues of Debentures of a series. (R)} {q) (10) Dates of the Resolutions thoris ng the sue of the erie (11) {12) (13) Total Amount secured bya eries 0” Deben tures. Date and Amounts of ach issue of the series Date of the ‘over ing. Deed General Descrip tion of he Property Charged Names of the rustees for the Debenture {olders Neb (15) Amount Memo- or Rate -andums per cent of | of the Satis- Commis-‘action.’ sion, —_ Allow-Amount ance, or Discount (14) (16) Receiver or Manager. Name and ate of .ppoint. ment Date of >easing to act. AN Yi. ~. -—, - ¢ 540 SECRETARIAL PRACTICE No. of Company F. sine Form No. 1 F. THE COMPANIES ACT, 1929. [List oF DOCUMENTS DELIVERED FOR REGISTRATION BY A COMPANY INCORPORATED OUTSIDE GREAT BRITAIN. Pursuant to Section 344. Name of Company _. Presented bv ~ | eresnsssnnessarnsnenniaen J HNNeEN at LeaN sea ttasat tae reds eens ReeREIRRAINI nore cahe List of Documents delivered to the Registrar of Companies for Registration, pursuant to Section 344 of the Companies Act. 1929, A COMPANY INCOTPOTALEA IN (&)-commmermsmrmemsmemsoserssesmemsmsosmssesesmemosesosososeemseseseensrons and which has a place of business within Great Britain at... (A) (B) IC) (A) A certified copy of the Charter, Statutes, or Memorandum and Articles of the Company, or other instrument constituting ov defining the constitution of the Company, and, if the instrument is not written in the English language, a certified translation theveof. The Copies and Translations (if any) above mentioned must be certified in the manner prescribed in paragraphs 2 and 5 of this Order. (B) A list of the Directors of the Company, containing such particulars with vespect to the Divectors as ave by the Companies Act, 1929, required to be contained with respect to Directors in the Register of Directors of a Company incorporated under the Companies Act, 1929. (C) The names and addresses of some ome ov move persons resident in Great Britain authorised to accept on behalf of the Company service of process and any notices requived to be served on the Combanv. Signature of the persons authorised under Section 344 (1) (¢) of the Companies Act, 1929, or of some other person in Great Britain duly authorised by the Company. Dated the... ~ wnnday of... (a) Country of origin COMPANIES (FORMS) ORDER No. of Company F. nnn A g oJ Form No. 2 F. A 5s. Companies Registration Fee Stamp must be imbressed here THE COMPANIES ACT, 1929 LIST AND PARTICULARS OF THE DIRECTORS OF A COMPAL ¥ INCORPORA... OUTSIDE GREAT BRITAIN. TL Pursuant to Section 34. Name [uo ot » Company Presented [ist and Particulars of the Directors (a) a Company incorporated in. A ——————— and which has established a place of business in Great Britain at... The present Christian Name or Names and surname. (2) Any former Christian Name or Names or Surname vationality Nationality f origin (if other than ‘he present Nationalitv). Usual Residential Address. Other busi-1ess Occupa tion or Jirector-~ips if any if none, state so. [7 Signature of the persons authorised under Section 344 (1) {¢) of the Companies Act, 1929, or of some other person in Great Britain duly authorised by the Company. Dated the... (a) *“ Director” includes any person who occupies the position of a Mivector by whatever named called and any person in accordance with whose awrection. or instructions the Divectors of a Company are accustomed to act. (0) Country of origin. (¢) In the case of a Corporation its corporate name and registered or principal office should be shown. (d) In the case of an individual who has no business occupation but holds any other directorship or divectoships, particulars of that directorship or of some one of those divectorshibs must be enteved. SECRETARIAL PRACTICE 342 No. of Company F. em Form No. 3 F. A 5s. Companies Registration Fee Stamp must be ympressed herve. r h THE COMPANIES ACT, 1929 List oF THE NAMES AND ADDRESSES OF PERSONS RESIDENT IN GREAT BRITAIN AUTHORISED TO ACCEPT SERVICE ON BEHALF OF A COMPANY INCORPORATED OUTSIDE GREAT BRITAIN. Pursuant to Section 3 Name [omen of Company [mee Presented bv List of Persons resident in Great Britain authorised to accept on behalf of the Company Service of process and any notices required to be served on . a company incorporated ID (@) crores and which has established a place of business in Great Britain at Surname. Christian Name Address. Signature of the persons authorised under Section 344 (1) (¢) of the Companies Act, 1929, or of some other person in Great Britain duly authorised by the Company. Dated the... NS 3, J S— Country of origin ‘=Description or Occunation. No. of Company COMFEANIES (FORMS) ORDER 54: Form No. 4 F. THE COMPANIES ACT. 1020. RETURN OF ALTERATION IN THE CHARTER, STATUTES, MEMORANDUM OR ARTICLES OF ASSOCIATION OR OTHER INSTRUMENT CONSTITUTING OR DEFINING THE CONSTITUTION OF A COMPANY INCORPORATED OUTSIDE GREAT BRITAIN. Pursuant to Section Name of Comps Presen.. Return of alteration in the (cj... constituting or defining the constitution or... a company incorporate and which has establisheo ,.ace of business in Great sritain (¢c) Certified Copy of Alteration or Certified Copy of new Deed, if one has been executed, and Certified Translation of Alteration or Deed, 1} not in English language, must accompany this Return and be shortly veferves to here. Signature of the persons authorised under Section 344 (1) (c) of the Companies Act, 1929, or of some other person in Great Britain duly authorised by the Compan Dated the (a) “Charter,” “Statutes,” ‘Memorancur tion’’ or other instrument as the case may - (b) Country of origin. (¢) The Copv and Translation (if any) must be prescribed in paragraphs 2 and 5 of this order ‘ele £.850C1A cetified in the manne: 544 No. of Company F. rssicon THE COMPANIES ACT, 1929. SECRETARIAL PRACTICE form No. 5 F. A 5s. Companies ( ) Registration Fee , Stamp must be Ne impressed heve. RETURN OF ALTERATION IN THE LIST OR PARTICULARS OF DIRECTORS OF A COMPANY INCORPORATED OUTSIDE GREAT BRITAIN Pursuant to Section 346. Company } .... .. Presented --Return of Alteration in the List or Particulars of Directors (a) of EERE EAE PE ENE TAA See easse Oru En ERs aTNe aaa ssa e neta s ara ratieuIesen esate nesactisenatnesssrenenseenteesetenst ieee esas orsessrranrnrnan a company incorporated in (BY emerson and which has established a place of business in Great Britain at... The present Christian Name or Names and Surname. (¢' \ny former Christian Name or James or Surname. Nationality Nationality f origin (if other than lhe present nationality). Usual Residential Address. Other 3usiness, Occupation or Directorships if any. If 10ne, state 50, (d) Remarks as to the alteration. (e) Signature of the persons authovised under Section 344 (1) (¢) of the Companies Act, 1929, or of some other person in Great Britain duly authorised by the Company. esses ras Dated the... rieriiinal AY OF orsssmsesisossiivmiimntivieesssiersesiio WQucvisiaii (a) “Director” includes any pevson who occupies the position of a divector by whatever name called, and any person in accordance with whose divections or instructions the Divectors of a Company ave accustomed to act. (0) Country of origin. (¢) Inthe case of a Corporation its corporate name and registered ov principal office should be shown. . (@) In the case of an individual who has no business occupation but holds any other divectorship ov divectovships, particulars of that directorship or of some one of those divectorships must be entered. (e) A complete List of the Directors or Managers shown as existing in the last Return should always be given. A mote of the changes since the last List was filed should be made in this column, e.g. by placing against a new director's name the words ‘‘in place of——,"" and by writing against any former divector’s name the wovds ‘dead.’ ““resigned.”’ or as the case may be. COMPANIES (FORMS) ORDER 545 Form No. 6 F. No. of Company F.... renner THE COMPANIES ACT, 1929. ~~ / N A 55. Companies Registration Fee Stamp must be imbdressed here. RETURN OF ALTERATION IN THE NAMES OR ADDRESSES OF THE PERSONS RESIDENT IN GREAT BRITAIN AUTHORISED TO ACCEPT SERVICE OF BEHALF OF A COMPANY INCORPORATED OUTSIDE GREAT BRITAIN. Pursuant to Section Name of Compan Presente Return of alteration in the Names or Addresses of the persons resident in Great Britain authorised to accept on behalf of the Companv Service of process and anv notices required to be served on a company incorporated in (a)... and which has established a place of business in Great Britain at... Signature of the persons authorised under Section 344 (1) (c) of the Companies Act, 1929, or of some other person in Great Britain duly authorised by the Company Dated the (.\ County “uy 546 SECRETARIAL PRACTICE No. of Company Fn THE COMPANIES ACT, 1920. / \ _— Form No. 8 F. ) See below. PARTICULARS OF A MORTGAGE OR CHARGE ON PROPERTY IN ENGLAND CREATED ON OR AFTER THE IST NOVEMBER, 1029, BY A COMPANY INCORPORATED OUTSIDE ENGLAND. Pursuant to Sections 79 and az Name [omen of COMPANY | ceeuusseissro ane A om rns, ERE The fee payable on registration of a Mortgage or Charge is 10s. if the amount secuved does not exceed £200 and £1 if it exceeds £200. Presented by El Particulars of a Mortgage or Charge created DV rcrrrecrmmmmsssesssssssssssssssssssssssssssssssssasnss 3 COMPANY INCOTPOTALEA INL (&) mmr and which has established a place of business in England at.....oonecrcsins Date and description of ‘he instrument creating or evidencing the Mortgage or charge. (b) {2) Amount secured by he Mortgage or Charge. 2) Short rarticulars of he Property Mortgaged or Charged. (4) Names, Addresses & Jescriptions of the fortgagees or Persons entitled to the charge. (5) Amount or rate per cent. of the Commission, Allowance or Discount (if any) paid or made either directly or indirectly by the Company to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any of the Debentures included in this Return. (cc) Signature of the persons authorised under Section 344 (1) (€) of the Companies Act, 1929, or of some other person in Great Britain duly authorised by the Company - Dated the... BY Ofanecsnssesssssssssssssssssssssnies TQuninion (a) Country of origin. } (bY A description of the Instrument, e.g., Trust Deed, Movigage, Debentuve elc.. as the case may be, should be given. (c) The vate of intevest bavahle under the tevms of the Debentures should not be enteved COMPANIES (FORMS) ORDER 54. No. of Company Fee THE COMPANIES ACT, 1929 PARTICULARS OF A MORTGAGE OR CHARGE SUBJECT TO WHICH PROPERTY IN ENGLAND HAS BEEN ACQUIRED ON OR AFTER THE 1ST NOVEMBER, 1929, BY A COMPANY INCORPORATED OUTSIDE ENGLAND. Pursuant to Sections 81 and ao Form No. o F. Name of Companv The fee payable on registration of a Movigage or Charge is zor amaunt secured does not exceed £200 and £1 if it exceeds £200. Presented ° ‘he APES I SRO 0A EPS SOD DORO ERRORS DOr: Particulars of a Mortgage or Charge subject to which property in Eng. JanNd has DEEN ACAMITEA Dy ues sees ssamssssssssmmseessssseosesssesesesseeseeeeemsseseesmsesssseemss esses seesene a company incorporated in 2 and which has established a place of business in England ato, (1) 12) (3) 4) Date and description of the instrument creating or evidencing the Mortgage or Charge. (b) Date of the acquisition of the Property Amount secured by the Mortgage or Charge. Short particulars of the Property Mort gaged or Chareed Signature of the persons authorised under Section 344 (1) (¢) of the Companies Act, 1929, or of some other person in Great Britain duly authorised by the Company Dated the... (a) Country of orgin. (b) A description of the Instrument, e.g.. etc., as the case may be, should be given. A copy of the Instrument certified as presc:.vocd Order. must be delivered with these Particulars (5) Names, Addresses and Descriptions of the Mortgagees or Persons entitled to to the charec f ac te. > 4 n' SECRETARIAL PRACTICE No. of Company FEF... Form No. 10 F. THE COMPANIES ACT, 1929. a ) See “ below. PARTICULARS OF A SERIES OF DEBENTURES CONTAINING, OR GIVING BY REFERENCE TO ANY OTHER INSTRUMENT, ANY CHARGE ON PROPERTY IN ENGLAND, TO THE BENEFIT OF WHICH THE DEBENTURE HOLDERS OF THE SAID SERIES ARE ENTITLED, pari passu, CREATED BY A COMPANY “NCORPORATED OUTSIDE ENGLAND. Pursuant to Sections 79 (8) and qo. Name cessssssmesmeenssrassassssseseases of f COMPANY | crcerermmssisssmsissmemssssssssssnssssssssssnsssssssssssssnssssses. SETAE SEERA RARER RSP The fee payable on the registration of these particulars is 10s. if the amount of the whole sevies does not exceed £200 and £1 if it exceeds £200. This Form (No. 10 F.) is to be used for vegistvation of Pavticulars of the entire series. When move than one issue of Debentures in the sevies is made, Particulars of the date and amount of each issue subsequent to the first should be sent to the Registrar on Form No. 11 F Presented *-Particulars of a series ofiDebenturesicreated DY. 10485800 0000889008nsn pa NRRLanRl a nASaannREASAadieaasete eta oRRotIe unt tii isasEsatIcAncaRsNIteIsERIRAtIeRL RmRAR RRR RARSRRLORS a cOmPany inCOTPOTALEA IN (B) mmm mrss ois sis and which has established a place of business in England at... COMPANIES (FORMS) ORDER 54C Form No. 10 F—continued. Total amoun'’ secured bv the whole series. I) Amount of the present ssue of the series. 3) Dates of Resolutions withorizing the issue of the series. (1) Date of the Covering Deed (if any) by which the security is created or defined; or, if there is no such Deed, the date of the frst execution of any Debenture of the series. le) Genera descrip tion of the >ropert ~hareed {6} Names of the “rustee: ifany) ‘or the Debenture holders (7) Amount or rate per cent. of the Commission, Allowance or Discount (if any) paid or made either directly or indirectly by the Company to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any of the Debentures included in this Return. (4) Signature of the persons authorised under Section 344 (1) (c) of the Companies Act, 1929, or of some other person in Great Britain duly authorised by the Company. Dated the a (@) Country of origin. (6) The vate of interest payable under the terms not be entered. 27 r FF Or Debenture shouic 550 SECRETARIAL PRACTICE No. of Company F...wmm THE COMPANIES ACT, 19209. Form 11 F. A 55. Companies Registration fee Stamp must be impressed herve. PARTICULARS OF AN ISSUE OF DEBENTURES IN A SERIES BY A COMPANY INCORPORATED OUTSIDE ENGLAND. Pursuant to Sections 79 (8) and qo Name [ ommmmmnms me of Company... rss For registration of particulars of the entive sevies Form No. 10 F. must be used. Presented b. ERE NAIR E YI TaN Nanri N eters Tatas asta eat tean aise Shania b ats Particulars of an Issue of Debentures in a Series where more than one Issue in the Series 1S Made DV eerie a company Ten DO BRAN (i) omnis es ART and which has established a place of business in England at... nen Date of present issue. (2) Amount of present issue. 1) Particulars as to the amount or rate per cent. of the commission, allowance, or discount (if any) paid, or made, either directly, or indirectly oy the Company, to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any of the Debentures included in this Return. (5). Signature of the persons authorised under Section 344 (1) (c) of the Companies Act, 1929, or of some other person in Great Britain duly authorised by the Company Dated the... soon (a) Country of origin. (b) The rate of intevest bavable undev the tevms of the Dehentuves should not he enteved COMPANIES (FORMS) ORDER 551 Form No. 12 F. No. of Company F.....o.... THE COMPANIES ACT, 1920 No Revenue Stam duty chargeable DECLARATION VERIFYING MEMORANDUM OF SATISFACTION ~F MORTGAGE OF CHARGE BY A COMPANY "NCNAPTIP:~ "9D OJTSIDE ANGLANT 21° CY + Name ot Compar-Presented I (or Wel... of ... an the person(s) authorised under Section 344 (1) (c) of the Companies Act 1929, bv (@&)e Do solemnly and sincerely declare that the particulars contained .a ihe Memorandum of Satisfaction annexed hereto and dated the...... day of. # Qun.., are true to the best of my our knowledge, information and belief. And I (or We) make this solemn Declaration, conscientiously believing the same to be true, and by virtue of the provisions of the “Statutory Declarations Act, » ar ** Declared at the..ecrnday of. one thousand nine hundred and before me wooo. A Commissioner for Oaths. (oc (a) Name of Company. (b) or Notary Public or Justice of the Peace SECRETARIAL PRACTICE Form No. 12 F—continued. Memorandum of Satisfaction of Mortgage or charge. C0) A 5s. Companies Registration Fee Stamp must be impressed herve. Name [un of Company I (or We)... BREE vEOsaIRAREIY hereby give notice on behalf of the above named Company that the registered charge being (0)... of which Particulars were registered with the Registrar of Companies on the. @Y Of rssicssssisirisisnsss IO. Was satisfied on FRCeeereeeereeend BV ern verses I Qon. to the extent of.............. Signature of the persons authovised under Section 344 (1) (c) of the Combanies Act. 1020. Dated the. ceeernecerressresseennedld BY OF covsesessinsnrinsssssssssrmessssnsesssssssss L Qunrrvaans (c) Description of the Instrument(s) creating ov evidencing the charge, e.g., ‘Mortgage,’ “Charge,” ‘‘Debenture,” efc., with the date thereof. If the registered charge was a ‘‘ Sevies of Debentures,” or ** Debentuve Stock,” the words ““ authorised by Resolution,’’ together with the date of the Resolution should be added. COMPANIES (FORMS) ORDER 55 Form No. 13 F. No. of Company F....cn THE COMPANIES ACT, 1929. ~ A 5s. Companies Registration Fee Stamp must be impressed here. PARTICULARS OF CHARGES CREATED AND CHARGES ON PROPERTY ACQUIRED BEFORE THE IST DAY OF NOVEMBER, 1929, BY A COMPANY INCORPORATED OUTSIDE ENGLAND Pursuant 0 Section Name of Company Presented Particulars, pursuant to Section qr of the Companies Act, 1920. sup PLEA DY coir snresseeresns sseressnsssennes a company incorporated IN (@)... meres oe and which has established a place of business in England (a) Of any Mortgage or Charge on property in England created by the Company before the 1st November, 1929, and remaining unsatisfied at that date and (B) of any Mortgage or Charge to which any property in England acquired by the Company before the 1st November, 1929, is subject which would have been required to be registered under the provisions of Section go of the Act if (i) the Mortgage or Charge had been created by or (ii) the property had been acquired by the Company on or after that date. Date and descrip tion of the instru ment creating or evidencing the Mortgage or Charge, (h Date of icquisition of "he Property. 3) Amount owing on the security of the Mortgage or Charge at the 1st day of November, 1929. short Particulars f the Property Mortgaged or Charged 2 Names, Addresses and Descriptions of the persons >ntitled to the Mortgage or Charge. Signature of the persons authorised under Section 344 (1)(c) of the Companies Act, 1929, or of some other person in Great Britain, duly authorised by the Company. Dated the... (a) Country of origin. (b) A description of the Instrument, e.g., ‘Trust Dec. “Debenture,” etc., as the case may be, should be given. (¢) This column should be completed only when the Mortgage or Charge is a Mortgage or Charge to which the property was subject when acquired by the Combanv. SECRETARIAL PRACTICE Form No. 100. THE COMPANIES ACT, 1929. NOTICE TO DISSENTING SHAREHOLDERS Pursuant to Section 1-~ ve (7) vo. Limited Notice by (BY... in, Limited. To (¢)uoo... Whereas on the.....ece@Y Connors covers Iu {Dhami mismienmanes wens Iade an offer to all the holders of (d).................shares IN (@)rnconrrineenn . [state shortly the MAUVE Of TRE Ofer) messes on ooo and whereas up to the... AAY OF ovo IO being a date within four months of the date of the making thereof such offer was approved by the holders of not less than nine-tenths in value of the {) sri Shares in the said Company. Now therefore the said LJ snreomressnenrene ....il pursuance of the provisions of Section 155 of the Companies Act, 1929, hereby gives you notice that it the said (2) wri rrr €81TES £0 ACQUIre the (@).msrsisesssesssn Shares in the said (a)... ...neld by you. And further take notice that unless upon an application made to the Court by you the Said (€).mmmmmmmmmmsmn eee OF before the snrscsne wierrrsenBY OF crrsisrirrsrssssisisein: Qn DING one month from the date of this notice the Court thinks fit to order otherwise, the said (5)... will be entitled and bound to acquire the (d).......... ever mrss SNATES held by you in the said (2)... woe OD the terms of the above-mentioned offer approved by the approving (d)..... shareholders in the said Company. (Signature)... OT (BY ooo (State whether Divector or Manager oF SECHEEAVYY sion i TO ceeeday Of... (a) Name of transferor Company. (b) Name of transferee Company. (¢) Name and address of dissenting shareholder. (d) If the offer is limited to a certain class or classes of shaveholders insert particulars of the shares APPENDIX FE "Permission has been given for this reprint, but it does not purport to bi published ‘ by authority.’) Companies Act, 1929, [19 & 20 GEO. 5. CH. 23.] ARRANGEMENT OF SECTIONS DART 1. INCORPORATION OF COMPANIES AND MATTERS INCIDENTAL THERETY emorandum of Association Section. I. Mode of forming incorporated company. 2. Requirements with respect to memorandum. 3. Stamp and signature of memorandum. 4. Restriction on alteration of memorandum. 5. Mode in which and extent to which obiects of company ma, altered. Avticles of Association. 6. Articles prescribing regulations for companies. 7. Regulations required in case of unlimited company or comps ny limited by guarantee. 8. Adoption and application of Table :. 9. Printing, stamp and signature of articles. 10. Alteration of articles by special resolution Form of Memorandum and Articles 11. Statutorv forms of memorandum and articles Registration. 12. Registration of memorandum and articles. 13. Effect of registration. 14. Power of company to hold lands. 15. Conclusiveness of certificate of incorporation. 16. Registration of unlimited company as limited. Provisions with respect to Names of Companies. 17. Restriction on registration of companies by certain names. Is. Power to dispense with ‘‘Limited’’ in name of charitable anc other companies. 19. Change of name. SECRETARIAL PRACTICE General Provisions with respect to Memorandum and Articles. 20. Effect of memorandum and articles. 21. Provision as to memorandum and articles of companies limited by guarantee. 22. Alterations in memorandum or articles increasing liability to contribute to share capital not to bind existing members without consent. 23. Copies of memorandum and articles to be given to members. 24. Issued copies of memorandum to embody alterations. Membership of Company. 25. Definition of member. Private Companies. 26. Meaning of ‘private company. ”’ 27. Circumstances in which company ceases to be, or to enjoy privileges of, a private company. Reduction of Number of Members below Legal Minimum. 28. Prohibition of carrying on business with fewer than seven or, in the case of a private company, two members. Contracts, &c. 29. Form of contracts. 30. Bills of exchange and promissory notes. 31. Execution of deeds abroad. 32. Power for company to have official seal for use abroad. Authentication of Documents. 33. Authentication of documents. Part II. SHARE CAPITAL AND DEBENTURES. Prospectus. 34. Dating and registration of prospectus. 35. Specific requirements as to particulars in prospectus. 36. Restriction on alteration of terms mentioned in prospectus or statement in lieu of prospectus. 37. Liability for statements in prospectus. 38. Document containing offer of shares or debentures for sale to be deemed prospectus. Allotment. 39. Prohibition of allotment unless minimum subscription received. 40. Prohibition of allotment in certain cases unless statement in lieu of prospectus delivered to registrar. 41. Effect of irregular allotment. 42. Return as to allotments. COMPANIES ACT, 1929 557 Commissions and Discounts. 43. Power to pay certain commissions, and prohibition of payment of all other commissions, discounts, &c. 44. Statement in balance sheet as to commissions and discounts. 45. Prohibition of provision of financial assistance by company for purchase of its own shares. Issue of Redeemable Preference Shares and Shaves at Discount Power to issue redeemable preference shares. Power to issue shares at a discount. 46. 47. Miscellaneous Provisions as to Share Capital. 48. Power of company to arrange for different amounts being paid on shares. 49. Reserve liability of limited company. 50. Power of company limited by shares to alter its share capital. 51. Notice to registrar of consolidation of share capital, conversion of shares into stock, &c. 52. Notice of increase of share capital. 53. Power of unlimited company to provide for reserve share capital on re-registration. 54. Power of company to pay interest out of capital in certain cases Reduction of Shave Capital. 55. Special resolution for reduction of share capital. 56. Application to court for confirming order, objections by creditors. and settlement of list of objecting creditors. 57. Order confirming reduction and powers of court on making such order. 58. Registration of order and minute of reduction. 59. Liability of members in respect of reduced shares 60. Penaltv on concealment of name of creditor. Variation of Shareholders’ Right. 61. Rights of holders of special classes of shares Transfer of Shaves and Debentures, Evidence ot Til 62. Nature of shares. 63. Transfer not to be registered except on production of instrument of transfer. 64. Transfer by personal representative. 65. Registration of transfer at request of transferor. 66. Notice of refusal to register transfer. 67. Duties of company with respect to issue of certificates. 68. Certificate to be evidence of title. 69. Evidence of grant of probate. 70. Issue and effect of share warrants to bearer. 71. Penalty for personation of shareholder. 72. Offences in connection with share warrants in Scotland 3 SECRETARIAL PRACTICE Special Provisions as to Debentures. 73. Right of debenture holders and shareholders to inspect register of debenture holders and to have copies of trust deed. 74. Perpetual debentures. 75. Power to re-issue redeemed debentures in certain cases. 76. Specific performance of contracts to subscribe for debentures. 77. Validity of debentures to bearer in Scotland. 73. Payment of certain debts out of assets subject to floating charge in priority to claims under the charge. Part III. REGISTRATION OF CHARGES. Registration of Charges with Registrar of Companies. 79. Registration of charges created by companies registered in England. 80. Duty of company to register charges created by company. 81. Duty of company to register charges existing on property acquired. . 82. Register of charges to be kept by Registrar of Companies. 83. Endorsement of certificate of registration on debentures. 84. Entry of satisfaction. 85. Rectification of register of charges. 86. Registration of enforcement of security. Provisions as to Company’s Register of Charges and as to Copies of Instruments creating Charges. 87. Copies of instruments creating charges to be kept by company. 88. Company’s register of charges. 89. Right to inspect copies of instruments creating mortgages and charges and company’s register of charges. Application of Part I1I to Companies Incorporated outside England. go. Application of Part III to charges created, and property subject to charge acquired by company incorporated outside England. Transitional Provision as to Matters vequived to be vegisteved undey this Act, but not under former Acts. 91. Provision as to charges created, and charges on property acquired by company before commencement of Act. Part IV. . MANAGEMENT AND ADMINISTRATION. Registered Office and Name. 92. Registered office of company. 95. Publication of name by company. Restrictions on Commencement of Business. 94. Restrictions on commencement of business. COMPANIES ACT, 1929 Register of Members. L¢ 95. Register of members. 96. [ndex of members of company. 97. Provisions as to entries in register in relation to share warrants 98. [nspection of register of members. 99. Power to close register. roo. Power of court to rectify register. 101. Trusts not to be entered on register in England. 102. Register to be evidence Dominion Register. Power for company to keep dominion register. Regulations as to dominion register. Stamp duties in case of shares registered in dominion registers. Power to extend provisions as to dominion registers to other countries. Provisions as to branch registers of dominion companies kept in the United Kingdom. Annual Return. 108. Annual return to be made by company having a share capital. 109. Annual return to be made by company not having share capital 110. General provisions as to annual returns. : 111. Certificates to be sent by private company with annual return Meetings and Pro + 112. Annual general meeting. 113. Statutory meeting and statutory report. 114. Convening of extraordinary general meeting on requisition 115. Provisions as to meetings and votes. 116. Representation of companies at meetings of other companies and of creditors. 117. Provisions as to extraordinary and special resolutions. 118. Registration and copies of certain resolutions and agreements. 119. Resolutions passed at adjourned meetings. 120. Minutes of proceedings of meetings and directors. 121. Inspection of minute books. Accounts and Auai.. 122. Keeping of books of account. 123. Profit and loss account and balance shee! 124. Contents of balance sheet. 125. Assets consisting of shares in subsidiary companies. wu out separately in balance sheet. 126. Balance sheet to include particulars as to subsidiary companies 127. Meaning of subsidiary company. 128. Accounts to contain particulars as to loans to, and remuneration of, directors, &c. 129. Signing of balance sheet. 130. Right to receive copies of balance sheets and auditors’ reports. 131. Banking and certain other companies to publish periodical statement 560 SECRETARIAL PRACTICE 132. Appointment and remuneration of auditors. 133. Disqualification for appointment as auditor. 134. Auditors’ report and auditors’ right of access to books and right to attend general meetings. Inspection. 135. Investigation of affairs of company by Board of Trade inspectors. 136. Proceedings on report by inspectors. 137. Power of company to appoint inspectors. 138. Report of inspectors to be evidence. Directors and Managers. 139. Number of directors. 140. Restrictions on appointment or advertisement of director. 141. Qualification of director or manager. 142. Provisions as to undischarged bankrupts acting as directors. 143. Validity of acts of directors. 144. Register of directors. 145. Particulars with respect to directors in trade catalogues, circulars, &c. 146. Limited company may have directors with unlimited liability. 147. Special resolution of limited company making liability of directors unlimited. 148. Statement as to remuneration of directors to be furnished to shareholders. 149. Disclosure by directors of interest in contracts. 150. Provision as to payments received by directors for loss of office or on retirement. 151. Provisions as to assignment of office by directors. Avoidance of Provisions in Articles ov Contracts velieving Officers i from Liability. 152. Provisions as to liability of officers and auditors. Avvangements and Reconstructions. 153. Power to compromise with creditors and members. 154. Provisions for facilitating reconstruction and amalgamation of companies. 155. Power to acquire shares of shareholders dissenting from scheme or contract approved by majority. Part V. Winping Up. (i) PRELIMINARY. Modes of Winding Up 156. Modes of winding up. Contributories. 157. Liability as contributories of present and past members. 158. Definition of contributory. rsg. Nature of liability of contributory COMPANIES ACT. 1020 jul 160. Contributories in case of death of member. 161. Contributories in case of bankruptcy of member. 162. Provision as to married women. (i1) WINDING UP BY THE COURT. Jurisdiction. 163. Jurisdiction to wind up companies registered in England. 164. Conduct of winding up business in High Court in England. 165. Transfer of proceedings from one court to another and statement of case by county court. 166. Jurisdiction to wind up companies in Scotland. 167. Power in Scotland to remit winding up to Lord Ordinary. Cases in which Company may be Wound up by Court. 168. Circumstances in which company may be wound up by court 169. Definition of inability to pay debts. Petition for Winding Up and Effects thereof. 170. Provisions as to applications for winding up. 171. Powers of court on hearing petition. 172. Power to stay or restrain proceedings against company. 173. Avoidance of dispositions of property, &c., after commencement of winding up. 174. Avoidance of attachments, &c., in case of English company. and in case of effects in England of Scottish company Commencement of Winding Up 175. Commencement of winding up by the court. Consequences of Winding-1y Crder 176. Copy of order to be forwarded to registrar 177. Actions stayed on winding-up orde 178 Effect of winding-up order. Official Receiver in English Winding Up. 179. Official receiver in bankruptcy to be official receiver for winding: up purposes. 180. Appointment of official receiver by court in certain cases. 181. Statement of company’s affairs to be submitted to official receiver. 182. Report by official receiver. Liquidators. 183. Power of court to appoint liquidators. 184. Appointment and powers of provisional liquidator. 185. Appointment, style, &c., of liquidators in England. 186. Provisions where person other than official receiver is appointed liquidator. 187. Provisions as to liguidators in Scotland 362 SECRETARIAL PRACTICE 188. General provisions as to liquidators. 189. Custody of company’s property. 190. Vesting of property of company in liquidator. 191. Powers of liquidator. 192. Exercise and control of liquidator’s powers in England. 193. 3ooks to be kept by liquidator in England. 194. Payments of liquidator in England into bank. 195. Audit of liquidator’s accounts in England. 196. Control of Board of Trade over liquidators in England. 197. Release of liquidators in England. Committees of Inspection. 198. Meetings of creditors and contributories to determine whether committee of inspection shall be appointed. 199. Constitution and proceedings of committee of inspection. 200. Powers of Board of Trade in England where no committee of inspection. 201. Additional powers of committee of inspection in Scotland. General Powers of Court in case of Winding Up by Court. 202. Power to stay winding up. 203. Settlement of list of contributories and application of assets. 204. Delivery of property to liquidator. 205. Payment of debts due by contributory to company and extent to which set off allowed. 206. Power of court to make calls. 207. Payment into Bank of moneys due to company. 208. Order on contributory conclusive evidence. 209. Appointment in England of special manager. 210. Power to exclude creditors not proving in time. 211. Adjustment of rights of contributories. 212. Inspection of books by creditors and contributories. 213. Power to order costs of winding up to be paid out of assets. 214. Power to summon persons suspected of having property of company. 215. Attendance of director of company at meetings of creditors, &c. in Scotland. 216. Power in England to order public examination of promoters, directors, &c. 217. Power in England to restrain fraudulent persons from managing companies. 218. Power to arrest absconding contributory. 219. Powers of court cumulative. 220. Delegation to liquidator of certain powers of court in England. 221. Dissolution of company. Enforcement of and Appeal from Orders. 222. Order for calls on contributories in Scotland. 223. Enforcement throughout United Kingdom of orders made in winding up. 224. Appeals from orders in Scotland. COMPANIES ACT, 1929 (iiil} VorLuntarRy WINDING Up Resolutions for, and commencement of Voluntary Winding Up 225. Circumstances in which company may be wound up voluntarily 226. Notice of resolution to wind up voluntarily. 222. Commencement of voluntary winding up. Consequences of Voluntary Winding Up. 228. Effect of voluntarv winding up on business and status of company. 229. Avoidance of transfers, &c., after commencement of voluntary winding up. Declaration of Solvency. 230. Statutory declaration of solvency in case of proposal to wind up voluntarily Provisions applicable to a Members’ Voluntary Winding Up 231. Provisions applicable to a members’ winding up. 232. Power of company to appoint and fix remuneration liquidators. 233. Power to fill vacancy in office of liquidator. 234. Power of liquidator to accept shares, &c.. as consideration for sale of property of company. 235. Duty of liquidator to call general meeting at end of each year 226. Final meeting and dissolution. Provisions applicable to a Creditors’ Voluntary Winding up 237. Provisions applicable to a creditors’ winding up. 238. Meeting of creditors. 239. Appointment of liquidator. 240. Appointment of committee of inspection. 241. Fixing of liquidator’s remuneration and cesser of directors powers. 242. Power to fill vacancy in office of liquidator. 243. Application of s. 234 to a creditors’ voluntary winding up. 244. Duty of liquidator to call meetings of company and of creditors at end of each year. 245. Final meeting and dissolution. Provisions applicable to every Voluntarv Provisions applicable to every voluntary Distribution of property of company. Powers and duties of liquidator in voluntary winding up. Power of court to appoint and remove liquidator in voluntary winding up. 250. Notice by liquidator of his appointment. 2:1. Arrancement when binding on creditors 24C 2: 2, 24 564 SECRETARIAL PRACTICE 252. Power to apply to court to have questions determined or powers exercised. 253. Power of court in Scotland to stay proceedings against company 254. Costs of voluntary winding up. 255. Saving for rights of creditors and contributories. (iv) WinpiNG UP SUBJECT TO SupERrvIisiION OF COURT. 256. Power to order winding up subject to supervision. 257. Effect of petition for winding up subject to supervision. 258. Application of ss. 173 and 174 to winding up subject to supervision. 259. Power of court to appoint or remove liquidators. 260. Effect of supervision order. (v) PROVISIONS APPLICABLE TO EVERY MODE oF WINDING UP. Proof and Ranking of Claims. 261. Debts of all descriptions to be proved. 262. Application of bankruptcy rules in winding up of insolvent English companies. 263. Ranking of claims in Scotland. 264. Preferential payments. Effect of Winding Up on antecedent and other transactions. 265. Fraudulent preference. 266. Effect of floating charge. 267. Disclaimer of onerous property in case of company wound up in England. 268. Restriction of rights of creditor as to execution or attachment in case of company being wound up in England. 269. Duties of sheriff as to goods taken in execution. 270. Effect of diligence within sixty days of winding up in case of Scottish company and in case of effects in Scotland of English company. Offences antecedent to ov in course of Winding Up. 271. Offences by officers of companies in liquidation. 272. Penalty for falsification of books. 273. Frauds by officers of companies which have gone into liquidation. 274. Liability where proper accounts not kept. 275. Responsibility of directors for fraudulent trading. 276. Power of court to assess damages against delinquent directors, &c. 277. Prosecution of delinquent officers and members of company. Supplementary Provision as to Winding Up. 278. Disqualification for appointment as liquidator. 279. Enforcement of duty of liquidator to make returns, &c. 28c Notification that a company is in liquidation. COMPANIES ACT, 1929 565 281. Exemption of certain documents from stamp duty on winding up of companies. 282. Books of company to be evidence. 283. Disposal of books and papers of company. 284. Information as to pending liquidations. 285. Unclaimed assets in England to be paid to Companies Liquidation Account. 286. Unclaimed dividends, &c., in Scotland to be lodged in bank. 287. Resolutions passed at adjourned meetings of creditors and contributories. Supplementary Powers of Court 288. Meetings to ascertain wishes of creditors or contributories. 289. Judicial notice of signature of officers. 290. Special commission for receiving evidence. 291. Court may order examination of persons in Scotland. 292. Costs of application for leave to proceed against company being wound up in Scotland. 293. Affidavits. &c., in United Kingdom and dominions Provisions as to Dissolution 294. Power of court to declare dissolution of company void 295. Registrar may strike defunct company off register. 206. Property of dissolved companv to be bona vacantia Sbecial Provisions as to Stannarie. 297. Attachment of debt due to contribut~rv on winding in stannaries court. 298. Preferential payment in stannaries ca 200. Provisions as to mine club funds 1% Centval Accounts 300. Companies Liquidation Account. 301. Investment of surplus funds on general account 202. Separate accounts of particular estates CH 303. Officers and remuneration. 304. Returns by officers in English winding i, 2085 Rules and Fees. General rules and fees for winding "ip - 3 SECRETARIAL PRACTICE Part VI. RECEIVERS AND MANAGERS. 306. Disqualification for appointment as receiver. 307. Power in England to appoint official receiver as receiver for debenture holders or creditors. 308. Notification that receiver or manager appointed. 309. Power of court to fix remuneration on application of liquidator 310. Delivery to registrar of accounts of receivers and managers. 311. Enforcement of duty of receiver to make returns &c. Part VII. GENERAL PROVISIONS AS TO REGISTRATION. 312. Registration offices in England and Scotland. 313. Fees. 314. Inspection, production and evidence of documents kept by registrar. 315. Enforcement of duty of company to make returns to registrar. Part VIII. APPLICATION OF AcT To COMPANIES FORMED OR REGISTERED UNDER FORMER ACTS. 316. Application of Act to companies formed under former Companies Acts. 317. Application of Act to companies registered under former Companies Acts. 318. Application of Act to companies re-registered under former Companies Acts. 319. Provision as to companies registered under the Joint Stock Companies Acts. 320. Exclusion of companies registered in Irish Free State or Northen Ireland. Part IX. COMPANIES NOT FORMED UNDER THIS ACT AUTHORISED TO REGISTER UNDER THIS ACT. 321. Companies capable of being registered. 322. Definition of joint stock company. 323. Requirements for registration by joint stock companies. 324. Requirements for registration by other than joint stock companies. 325. Authentication of statements of existing companies. 326. Registrar may require evidence as to nature of company. 327. Exemption of certain companies from payment of fees. 32.5. Addition of ‘‘limited’’ to name. COMPANIES ACT, 1929 329. Certificate of registration of existing companies. 330. Vesting of property on registration. 331. Saving for existing liabilities. 332. Continuation of existing actions. 333. Effect of registration under Act. 334. Power to substitute memorandum and articles for deed settlement. 335. Power of court to stay or restrain proceedings. 336. Actions stayed on winding-up order. ‘y! WINDING UP I 2) COMPA TE - 337. Meaning of unregistered company. 338. Winding up of unregistered companies. 339. Contributories in winding up of unregistered company 340. Power of court to stay or restrain proceedings 341. Actions stayed on winding-up order. 242. Provisions of Part X cumulative. PART A. COMPANIES .NCORPORATED OUTSIDE GREAT BRITAIN oN Business WITHIN GREAT BRITAIN. CARRYING 343. Companies to which Part XI applies. 344. Documents, &c., to be delivered to registrar by companies carrying on business in Great Britain. 345. Power of companies incorporated in British Possessions to hold lands. 346. Return to be delivei- ~ registrar where documents, oc., altered. 347. Balance sheet of companv carrying on business in Great Britain. 348. Obligation to state name of company, whether limited, and country where incorporated. 349. Service on company to which Part XI applies. 350. Office where documents to be delivered to registrar. 35I. Penalties. 252. Interpretation of P 35. Stecial Provisions as to Companies incorporaiew .n «nani. Islands or Isle of Man. Obligation of company incorporated in Channel Islands Isle of Man to deliver documents to registrar J. 308 SECRETARIAL PRACTICE Part XII. RESTRICTIONS ON SALE OF SHARES AND OFFERS OF SHARES FOR SALE. 354. Provisions with respect to prospectuses of foreign companies inviting subscriptions for shares or offering shares for sale 355. Requirements as to prospectus. 356. Restrictions on offering of shares for subscription or sale. Part XIII. MISCELLANEOUS. Prohibition of Pavinerships with more than Twenty Members. 357. Prohibition of partnerships with more than twenty members. Provisions relating to Banks. 358. Prohibition of banking partnerships with more than ten members. 359. On registration of banking company with limited liability, notice to be given to customers. 360. Liability of bank of issue unlimited in respect of notes. 361. Privileges of banks making annual return. Miscellaneous Offences. 362. Penalty for false statement. 363. Penalty on perjury in Scotland. 364. Penalty for improper use of word ‘ Limited.” General Provisions as to Offences. 365. Provision with respect to default fines and meaning of ‘“ officer in default.” 366. Prosecution of offences punishable by fine. 367. Application of fines. 368. Saving as to private prosecutors. 369. Saving for privileged communications. Service of Documents and Legal Proceedings. Service of documents on company. Costs in actions by certain limited companies. Power of court to grant relief in certain cases. Power to enforce orders. Rules of procedure in Scotland. Jurisdiction of stannaries court. General Provisions as to Board of Trade. 376. Annual Report by Board of Trade. 377. Authentication of documents issued by Board of Trade. 2»_ Orders and certificates of Board to be evidence. 379. Power to alter tables and forms. COMPANIES ACT, 1929 yQ Inteypretation. ~ 380. Interpretation. Repeal, Savings, Extent, Short Title and Commencement 381. 382. 383. 384. 385. Repeal. Savings. Saving of pending proceedings for winding-up. Application to Ireland. Short title and commencement. FIRST SCHEDULE— Table A.—Regulations for Management of a Company limited by Shares. Table B.—Form of Memorandum of Association of a Company limited by Shares. Table C.—Form of Memorandum and Articles of Association of a Company limited bv Guarantee. and not having a Share Capital. Table D.—Memorandum and Articles of Association of a Company limited by Guarantee. and having a Share Capital. Table E.—Memorandum and Articles of Association of an unlimited Company having a Share Capital. SEcoND SciuzpuLr - Form of Licence to hold Lands. THIRD ScHEDULE.—Form of Statement in lieu of Prospectus to be delivered to Registrar by a Private Company on becoming a Public Company. FOURTH SCHEDULE— Part 1.--Matters required to be stated in Prospectus. Part II.—Reports to be set out in Prospectus. Part I111.—Provisions applving to Parts I. and II. of Sche dnle FirrH ScHEDULE.—Form of Statement in lieu of Prospectus to be delivered to Registrar by a Company which does not issue a Prospectus or which does. not go to Allotment on a Prospectus issued. SIXTH SCHEDULE.—Form of Annual Return of a Company having a Share Capital. SEVENTH SCHEDULE.—Form of Statement to be published by Banking and Insurance Companies. and Deposit. Provident or Benefit Societies. EiGHTF Se—7 "FF - Part, "rders Pronounced in Vacation in Scotland which are >2 Final. Part I1.—Orders Pronounced in Vacation in Scotland which are to take effect until Reclaiming Note disposed of 57 SECRETARIAL PRACTICE NINTH SCHEDULE— Part I.—Provisions which do not apply in the case of any Winding Up subject to Supervision of the Court. Part II.—Provisions which do not apply where, before the Supervision Order, the Voluntary Winding Up was a Members’ Winding Up. TENTH ScHEDULE.—Table of Fees to be paid to the Registrar of Companies. ELEVENTH SCHEDULE.—Provisions referred to in section three hundred and sixty-two of the Act. TWELFTH SCHEDULE— Part I.—Enactments repealed. Part II.—Enactments saved. Companies Act, 1929 An Act to consolidate the Companies Acts, 1908 to 1928, and and certain other enacements connected with the said Acts. [Toth May, 1029.] BE it enacted by the King’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same. as follows: — Pan: INCORPORATION OF COMPANIES ..I¢ THERETO BY MATTERS INCIDENTAL Memorandum of 1.—(1) Any seven or more persons, or, where the company to be Mode of forming formed will be a private company, any two or more persons, asso- opera ciated for any lawful purpose may, by subscribing their names to a memorandum of association and otherwise complying with the requirements of this Act in respect of registration, form an incorporated company, with or without limited liability. Such a company may be either— A company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them (in this Act termed “a company limited by shares’); or A company having the liability of its members limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its being wound up (in this Act termed “a company limited by guarantee’); or A company not having any limit on the liability members (in this Act termed ‘‘an unlimited comn--Association. 2.—(1) The memorandum of every company must ..: Requirements (a The name of the companv with “Limited” as the last memorandum. word of the name in the case a company i+ Cores or by guarantee: Whether the registered office « situate in England or in Scotland The obiects of the company 372 SECRETARIAL PRACTICE (2) The memorandum of a company limited by shares or by guarantee must also state that the liability of its members is limited. (3) The memorandum of a company limited by guarantee must also state that each member undertakes to contribute to the assets of the company in the event of its being wound up while he is a member, or within one year after he ceases to be a member, for payment of the debts and liabilities of the company contracted before he ceases to be a member, and of the costs, charges, and expenses of winding up, and for adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding a specified amount. (4) In the case of a company having a share capital— (@) The memorandum must also, unless the company is an unlimited company, state the amount of share capital with which the company proposes to be registered and the division thereof into shares of a fixed amount; No subscriber of the memorandum may take less than one share; Each subscriber must write opposite to his name the number of shares he takes. Stamp and signature of memorandum. Restriction on alteration of memorandum. 3. The memorandum must bear the same stamp as if it were a deed, and must be signed by each subscriber in the presence of at least one witness who must attest the signature, and that attestation shall be sufficient in Scotland as well as in England. 4. A company may not alter the conditions contained in its memorandum except in the cases, in the mode and to the extent for which express provision is made in this Act. Mode in which S«—(I) Subject to the provisions of ‘this section a company and extent $ , may, by special resolution, alter the provisions of its memorandum company may be With respect to the objects of the company, so far as may be required altered. to enable 1t— (@) to carry on its business more economically or more efficiently; or to attain its main purpose by new or improved means; or co enlarge or change the local area of its operations; or to carry on some business which under existing circumstances may conveniently or advantageously be combined with the business of the company; or to restrict or abandon any of the objects specified in the memorandum; or (f) to sell or dispose of the whole or any part of the undertaking of the company; or fg) to amalgamate with any other company or body of persons. (2, The alteration shall not take effect until, and except in so far as, it is confirmed on petition by the court. Before confirming the alteration the court must be satisfied— rs COMPANIES ACT, 1929 573 that sufficient notice has been given to every holder of debentures of the company, and to any persons or class of persons whose interests will, in the opinion of the court, be affected by the alteration; and that, with respect to every creditor who in the opinion of the court is entitled to object and who signifies his objection in manner directed by the court, either his consent to the alteration has been obtained or his debt or claim has been discharged or has determined, or has been secured to the satisfaction of the court: Provided that the court may, in the case of any person or class, for special reasons, dispense with the notice required by this section. (a) (4) The court may make an order confirming the alteration either wholly or in part, and on such terms and conditions as it thinks fit. (5) The court shall, in exercising its discretion under this section, have regard to the rights and interests of the members of the company or of any class of them, as well as to the rights and interests of the creditors, and may, if it thinks fit, adjourn the proceedings in order that an arrangement may be made to the satisfaction of the court for the purchase of the interests of dissentient members, and may give such directions and make such orders as it may think expedient for facilitating or carrying into effect any such arrangement: Provided that no part of the capital of the company shall be expended in any such purchase. (6) An office copy of the order confirming the alteration, together with a printed copy of the memorandum as altered, shall, within fifteen days from the date of the order, be delivered by the company to the registrar of companies, and he shall register the copy so delivered and shall certify the registration under his hand, and the certificate shall be conclusive evidence that all the requirements of this Act with respect to the alteration and the confirmation thereof have been complied with, and thenceforth the memorandum as so altered shall be the memorandum of the company. The court may by order at any time extend the time for the delivery of documents to the registrar under this section for such period as the court may think proper. (7) If a company makes default in delivering to the registrar of companies any document required by this section to be delivered to him, the company shall be liable to a fine not exceeding ten pounds for every day during which the default continues. Articles of Association. 6. There may in the case of a company limited by shares, and there shall in the case of a company limited by guarantee or unlimited, be registered with the memorandum articles of association signed by the subscribers to the memorandum and prescribing regulations for the companv. Articles prescribing regula tions for companies. 574 SECRETARIAL PRACTICE Rogupfions te 7.—(1) In the case of an unlimited company the articles, if the tnlimited coms company has a share capital, must state the amount of share capital So i rpeny with which the company proposes to be registered. guarantee. (2) In the case of an unlimited company or a company limited by guarantee, the articles, if the company has not a share capital, must state the number of members with which the company proposes to be registered. (3) Where a company not having a share capital has increased the number of its members beyond the registered number, it shall, within fifteen days after the increase was resolved on or took place, give to the registrar of companies notice of the increase, and the registrar shall record the increase. If default is made in complying with this subsection, the company and every officer of the company who is in default shall be liable to a default fine. Adoption and 8.—(1) Articles of association may adopt all or any of the regulaapplication of tions contained in Table A. (2) In the case of a company limited by shares and registered after the commencement of this Act, if articles are not registered, or, if articles are registered, in so far as the articles do not exclude or modify the regulations contained in Table A, those regulations shall, so far as applicable, be the regulations of the company in the same manner and to the same extent as if they were contained in duly registered articles. 9. Articles must— (1) be printed; (2) be divided into paragraphs numbered consecutively; (3) bear the same stamp as if they were contained in a deed; (4) be signed by each subscriber of the memorandum of association in the presence of at least one witness who must attest the signature, and that attestation shall be sufficient in Scotland as well as in England. 10.—(1) Subject to the provisions of this Act and to the conditions contained in its memorandum, a company may by special resolution alter or add to its articles. (2) Any alteration or addition so made in the articles shall, subject to the provisions of this Act, be as valid as if originally contained therein, and be subject in like manner to alteration by special resolution. Printing, stamp, and signature of articles. Alteration of articles by special resolution. Form of Memorandum and Articles. Statutory forms of memorandum and articles. 11. The form of— (1) the memorandum of association of a company limited by shares; (2) the memorandum and articles of association of a company limited by guarantee and not having a share capital; COMPANIES ACT, 1929 575 (3) the memorandum and articles of association of a company limited by guarantee and having a share capital; the memorandum and articles of association of an unlimited company having a share capital; shall be respectively in accordance with the forms set out in Tables B., C., D. and E. in the First Schedule to this Act, or as near thereto as circumstances admit. Registration. 12. The memorandum and the articles, if any, shall be delivered Registration of to the registrar of companies for England or the registrar of com- Jerorandum panies for Scotland according as the registered office of the company is stated by the memorandum to be situate in England or Scotland and the registrar shall retain and register them. 13.—(1) On the registration of the memorandum of a company Effect of the registrar shall certify under his hand that the company is in- stration. corporated and, in the case of a limited companv, that the company is limited. (2) From the date of incorporation mentioned in the certificate of incorporation, the subscribers of the memorandum, together with such other persons as may from time to time become members of the company, shall be a body corporate by the name contained in the memorandum, capable forthwith of exercising all the functions of an incorporated company, and having perpetual succession and a common seal, but with such liability on the part of the members to contribute to the assets of the company in the event of its being wound up as is mentioned in this Act 14.—(1) A company incorporated under this Act shall have power to hold lands, and as regards lands in any part of the United Kingdom without licence in mortmain: Provided that a company formed for the purpose of promoting art, science, religion, charity or any other like object not involving the acquisition of gain by the company or by its individual members, shall not, without the licence of the Board of Trade, hold more than two acres of land, but the Board may by licence empower any such company to hold lands in such quantity, and subject to such conditions, as the Board think fit. (2) A licence given by the Board of Trade under this section shall be in accordance with the form set out in the Second Sched! to this Act. or as near thereto as circumstances admit. Power of company to hold lands. 15.—(1) A certificate of incorporation given by the registrar Conclusiveness in respect of any association shall be conclusive evidence that all of certificate of the requirements of this Act in respect of registration and of matters precedent and incidental thereto have been complied with, and that the association is a company authorised to be registered and duly registered under this Act. (2) A statutory declaration by a solicitor of the Supreme Court. and in Scotland bv an enrolled law agent. engaged in the 376 SECRETARIAL PRACTICE formation of the company, or by a person named in the articles as a director or secretary of the company, of compliance with all or any of the said requirements shall be produced to the registrar, and the registrar may accept such a declaration as sufficient evidence of compliance. wo of 16.—(1) Subject to the provisions of this section, a company pany as limited. Tegistered as unlimited may register under this Act as limited, or a company already registered as a limited company may re-register under this Act, but the registration of an unlimited company as a limited company shall not affect the rights or liabilities of the company in respect of any debt or obligation incurred, or any contract entered into, by, to, with, or on behalf of the company before the registration, and those rights or liabilities may be enforced in manner provided by Part IX. of this Act in the case of a company registered in pursuance of that Part. (2) On registration in pursuance of this section the registrar shall close the former registration,of the company, and may dispense with the delivery to him of copies of any documents with copies of which he was furnished on the occasion of the original registration of the company, but, save as aforesaid, the registration shall take place in the same manner and shall have effect as if it were the first registration of the company under this Act, and as if the provisions of the Acts under which the company was previously registered and regulated had been contained in different Acts from those under which the company is registered as a limited company. Provisions with respect to Names of Companies. 17.—(x) No company shall be registered by a name which— (a) is identical with that by which a company in existence is already registered, or so nearly resembles that name as to be calculated to deceive, except where the company in existence is in the course of being dissolved and signifies its consent in such manner as the registrar requires; or contains the words ‘Chamber of Commerce,” unless the company is a company which is to be registered under a licence granted in pursuance of the next following section of this Act without the addition of the word “Limited” to its name; or (¢) contains the words ‘Building Society.” (2) Except with the consent of the Board of Trade no company shall be registered by a name which— (a) contains the words “Royal” or “Imperial” or in the opinion of the registrar suggests, or is calculated to suggest, the patronage of His Majesty or of any member of the Royal Family or connection with His Majesty’s Government or any department thereof; or contains the words “Municipal” or ‘Chartered’ or in the opinion of the registrar suggests, or is calculated to suggest, connection with any municipality or other local Restriction on registration of companies by certain names. COMPANIES ACT, 1929 577 authority or with any society or body incorporated by Royal Charter; or contains the word ‘‘ Co-operative.” () 18.—(1) Where it is proved to the satisfaction of the Board of Trade that an association about to be formed as a limited company is to be formed for promoting commerce, art, science, religion, charity, or any other useful object, and intends to apply its profits, if any, or other income in promoting its objects, and to prohibit the payment of any dividend to its members, the Board may by licence direct that the association may be registered as a company with limited liability, without the addition of the word ‘‘ Limited’ to its name, and the association may be registered accordingly. (2) A licence by the Board of Trade under this section may be granted on such conditions and subject to such regulations as the Board think fit, and those conditions and regulations shall be binding on the association, and shall, if the Board so direct, be inserted in the memorandum and articles. or in one of those documents. Power to dispense with “Limited” in name of charit: able and other companies. (3) The association shall on registration enjoy all the privileges of limited companies, and be subject to all their obligations, except those of using the word “Limited” as any part of its name, and of publishing its name, and of sending lists of members to the registrar of companies. (4) A licence under this section may at any time be revoked by the Board of Trade, and upon revocation the registrar shall enter the word “Limited” at the end of the name of the association upon the register, and the association shall cease to enjoy the exemptions and privileges granted by this section: Provided that, before a licence is so revoked, the Board shall give to the association notice in writing of their intention, and shall afford the association an opportunity of being heard in opposition to the revocation. (5) Where the name of the association contains the words “Chamber of Commerce,” the notice to be given as aforesaid shall include a statement of the effect of the provisions of subsection (3) » the: next following section of this Act. 19.—(1) A company may, by special resolution and with the Change of name. approval of the Board of Trade signified in writing, change its name (2) If a company, through inadvertence or otherwise, is, without such consent as is mentioned in paragraph (a) of subsection (1) of section seventeen of this Act, registered by a name which is identical with that by which a company in existence is previously registered, or which so nearly resembles that name as to be calculated to deceive, the first-mentioned company may chan~ ‘+ name with the sanction of the registrar. (3) Where a licence granted in pursuance of the last foregoing section of this Act to a company the name of which contains the words “Chamber of Commerce’’ is revoked. the companv shall 578 SECRETARIAL PRACTICE within a period of six weeks from the date of the revocation or such longer period as the Board of Trade may think fit to allow, change its name to a name which does not contain those words. If a company makes default in complying with the requirements of this subsection, it shall be liable to a fine not exceeding fifty pounds for every day during which the default continues. (4) Where a company changes its name, the registrar shall enter the new name on the register in place of the former name, and shall issue a certificate of incorporation altered to meet the circumstances of the case. (5) The change of name shall not affect any rights or obligations of the company, or render defective any legal proceedings by or against the company, and any legal proceedings that might have been continued or commenced against it by its former name may be continued or commenced against it by its new name. Effect of memorandum and articles. Provision as to memorandum and articles of companies limited by guarantee. General Provisions with vespect to Memorandum and Articles. 20.—(1) Subject to the provisions of this Act, the memorandum and articles shall, when registered, bind the company and the members thereof to the same extent as if they respectively had been signed and sealed by each member, and contained covenants on the part of each member to observe all the provisions of the memorandum and of the articles. (2) All money payable by any member to the company under the memorandum or articles shall be a debt due from him to the company, and in England be of the nature of a specialty debt. 21.—(1) In the case of a company limited by guarantee and not having a share capital, and registered on or after the first day of January, nineteen hundred and one, every provision in the memorandum or articles or in any resolution of the company purporting to give any person a right to participate in the divisible profits of the company otherwise than as a member shall be void. (2) For the purpose of the provisions of this Act relating to the memorandum of a company limited by guarantee and of this section, every provision in the memorandum or articles, or in any resolution, of a company limited by guarantee and registered on or after the date aforesaid, purporting to divide the undertaking of the company into shares or interests shall be treated as a provision for a share capital, notwithstanding that the nominal amount or number of the shares or interests is not specified thereby. Alterations in 22, Notwithstanding anything in the memorandum or articles bin vg iid of a company, no member of the company shall be bound by an ing liability to alteration made in the memorandum or articles after the date es , on which he became a member, if and so far as the alteration requires to bind existing him to take or subscribe for more shares than the number held Egrhers with: by him at the date on which the alteration is made, or in any way "increases his liability as at that date to contribute to the share capital of, or otherwise to pay money to, the company: COMPANIES ACT, 1029 579 Provided that this section shall not apply in any case where the member agrees in writing, either before or after the alteration is made to be bound therebv. 23.—(1) A company shall, on being so required by any member send to him a copy of the memorandum and of the articles, if any and a copy of any Act of Parliament which alters the memorandum, subject to payment, in the case of a copy of the memorandum and of the articles, of one shilling or such less sum as the company may prescribe, and, in the case of a copy of an Act, of such sum not exceeding the published price thereof as the company may require. (2) If a company makes default in complying with this section the company and every officer of the company who is in default s’ be liable for each offence to a fine not exceeding one pound. Copies of memorandum and articles to be given to members 24.—(1) Where an alteration is made in the memorandum of Issued copies of : memorandum to a company, every copy of the memorandum issued after the date empody of the alteration shall be in accordance with the alteration. alterations. (2) If, where any such alteration has been made, the company at any time after the date of the alteration issues any copies of the memorandum which are not in accordance with the alteration, it shall be liable to a fine not exceeding one pound for each copy so issued, and every officer of the company who is in default shall be liable to the like penalty. Membership of Company. 25.—(1) The subscribers of the memorandum of a company shall be deemed to have agreed to become members of the company, and on its registration shall be entered as members in its register of members. (2) Every other person who agrees to become a member of a company, and whose name is entered in its register of members shall be a member of the company Definition of member. Private Companies. 26.—(1) For the purposes of this Act, the expression “private Meaning of company’ means a company which by its articles— Jrvate | restricts the right to transfer its shares: and limits the number of its members to fifty, not including persons who are in the employment of the company and persons who, having been formerly in the employment of the company, were while in that employment, and have continued after the determination of that emplovment be, members of the company; and prohibits any invitation to the public to subscribe * shares or debentures of the company. (2) Where two or more persons hold one or more shares mn a company jointly, they shall. for the purposes of this section. be treated as a sinele member 380 SECRETARIAL PRACTICE Seimiiance 27.—(1) If a company, being a private company, alters its articles pany ceases to ill such manner that they no longer include the provisions which, De, oo enjoy under the last foregoing section of this Act, are required to be ary included in the articles of a company in order to constitute it a private company, the company shall, as on the date of the alteration, cease to be a private company and shall within a period of fourteen days after the said date, deliver to the registrar of companies for registration a prospectus or a statement in lieu of prospectus in the form and containing the particulars set out in the Third Schedule to this Act. (2) If default is made in complying with sub-section (1) of this section, the company and every officer of the company who is in default shall be liable to a default fine of fifty pounds. (3) Where the articles of a company include the provisions aforesaid but default is made in complying with any of those provisions, the company shall cease to be entitled to the privileges and exemptions conferred on private companies under the provisions contained in section twenty-eight, subsection (3) of section one hundred and ten, subsection (1) of section one hundred and thirty and paragraph (4) of section one hundred and sixty-eight of this Act, and thereupon the said provisions shall apply to the company as if it were not a private company: Provided that the court, on being satisfied that the failure to comply with the conditions was accidental or due to inadvertence or to some other sufficient cause, or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any other person interested and on such terms and conditions as seem to the court just and expedient, order that the company be relieved from such consequences as aforesaid. Reduction of Number of Members below Legal Minimum. Prohibition of 28. Ifatany time the number of members of a company is reduced, Sh in the case of a private company, below two, or, in the case of any usiness with . . 7 fewer than seven Other company, below seven, and it carries on business for more ne case of than six months while the number is so reduced, every person pany, two who is a member of the company during the time that it so carries members. on business after those six months and is cognisant of the fact that it is carrying on business with fewer than two members, or seven members, as the case may be, shall be severally liable for the payment of the whole debts of the company contracted during that time, and may be severally sued therefor. Contracts, &c. Form of 29.—(1) Contracts on behalf of a company may ‘be made as contracts, follows :— (a) A contract which if made between private persons would be by law required to be in writing, and if made according to English law to be under seal, may be made on behalf of the company in writing under the common seal of the company: COMPANIES ACT, 1929 Hed (b) A contract which if made between private persons would be by law required to be in writing, signed by the parties to be charged therewith, may be made on behalf of the company in writing signed by any person acting under its authority, express or implied: A contract which if made between private persons would by law be valid although made by parol only, and not reduced into writing, may be made by parol on behalf of the company by any person acting under its authority, express or implied. (2) A contract made according to this section shall be effectual in law, and shall bind the company and its successors and all other parties thereto. (3) A contract made according to this section may be varied or discharged in the same manner in which it is authorised by this section to be made. 4) A deed to which a company is a party shall be held to be validly executed in Scotland on behalf of the company if it is executed in accordance with the provisions of this Act or is sealed with the common seal of the company and subscribed on behalf of the company by two of the directors and the secretary of the company, and such subscription on behalf of the company shall be binding whether attested by witnesses or not. 'c) 30. A bill of exchange or promissory note shall be deemed to have been made, accepted, or endorsed on behalf of a company if made, accepted, or endorsed in the name of, or by or on behalf or on account of, the company by any person acting under its authority. Bills of exchange and promissory notes. 31.—(x) A company may, by writing under its common seal, Execution of empower any person, either generally or in respect of anv specified deeds abroad. matters, as its attorney, to execute deeds on its behalf an «ny place not situate in the United Kingdom. ‘2) A deed signed by such an attorney on behalf of the company and under his seal shall bind the company and have the same effect as if it were under its common seal. 32.—(1) A company whose objects require or comprise the ower for cransaction of business in foreign countries may, if authorised ppl ip pave by its articles, have for use in any territory, district, or place not use abroad. situate in the United Kingdom, an official seal, which shall be a facsimile of the common seal of the company, with the addition on its face of the name of every territory, district, or place where it is to be used. (2) A deed or other document to which an official seal is duly affixed shall bind the company as if it had been sealed with the common seal of the company. (3) A company having an official seal for use in any such territory, district or place may, by writing under its common seal, authorise any person appointed for the purpose in that territory. 582 SECRETARIAL PRACTICE district or place, to affix the official seal to any deed or other document to which the company is party in that territory, district or place. Authentication of documents. (4) The authority of any such agent shall, as between the company and any person dealing with the agent, continue during the period, if any, mentioned in the instrument conferring the authority, or if no period is there mentioned, then until notice of the revocation or determination of the agent’s authority has been given to the person dealing with him. (5) The person affixing any such official seal shall, by writing under his hand, certify on the deed or other instrument, to which the seal is affixed, the date on which and the place at which it is affixed. Authentication of Documents. 33. A document or proceeding requiring authentication by a company may be signed by a director, secretary, or other authorised officer of the company, and need not be under its common seal. Part II. SHARE CAPITAL AND DEBENTURES. Prospectus. Dating and 34.—(1) A prospectus issued by or on behalf of a company or ata ° in relation to an intended company shall be dated, and that date shall, unless the contrary is proved, be taken as the date of publication of the prospectus. (2) A copy of every such prospectus, signed by every person who is named therein as a director or proposed director of the company, or by his agent authorised in writing, shall be delivered to the registrar of companies for registration on or before the date of its publication, and no such prospectus shall be issued until a copy thereof has been so delivered for registration. (3) The registrar shall not register any prospectus unless it is dated, and the copy thereof signed, in manner required by this section. (4) Every prospectus shall state on the face of it that a copy has been delivered for registration as required by this section. (5) If a prospectus is issued without a copy thereof being so delivered, the company, and every person who is* knowingly a party to the issue of the prospectus, shall be liable to a fine not exceeding five pounds for every day from the date of the issue of the prospectus until a copy thereof is so delivered. Specific require- 3D~—(I) Every prospectus issued by or on behalf of a company, ments asto or by or on behalf of any person who is or has been engaged or ym interested in the formation of the company, must state the matters COMPANIES ACT, 1929 583 specified in Part I of the Fourth Schedule to this Act and set out the reports specified in Part II of that Schedule, and the said Parts I and II shall have effect subject to the provisions contained in Part III of the said Schedule. (2) A condition requiring or binding an applicant for shares in or debentures of a company to waive compliance with any requirement of this section, or purporting to affect him with notice of any contract, document, or matter not specifically referred to in the prospectus, shall be void. (3) It shall not be lawful to issue any form of application for shares in or debentures of a company unless the form is issued with a prospectus which complies with the requirements of this section: Provided that this subsection shall not apply if it is shown that the form of application was issued either— {a) in connection with a bond fide invitation to a person to enter into an underwriting agreement with respect to the shares or debentures; or in relation to shares or debentures which were not offered to the public. If any person acts in contravention of the provisions of this subsection, he shall be liable to a fine not exceeding five hundred pounds. 4) In the event of non-compliance with or contravention of any of the requirements of this section, a director or other person responsible for the prospectus shall not incur any liability by reason of the non-compliance or contravention, if— (a) as regards any matter not disclosed, he proves that he was not cognisant thereof; or ne proves that the non-compliance or contravention arose from an honest mistake of fact on his part; or the non-compliance or contravention was in respect of matters which in the opinion of the court dealing with the case were immaterial or was otherwise such as ought, in the opinion of that court, having regard to all the circumstances of the case, reasonably to be excused: Provided that, in the event of failure to include in a prospectus a statement with respect to the matters specified in paragraph 15 of Part I of the Fourth Schedule to this Act, no director or other person shall incur any liability in respect of the failure unless it be proved that he had knowledge of the matters not disclosed. (5) This section shall not apply to the issue to existing members or debenture holders of a company of a prospectus or form of application relating to shares in or debentures of the company, whether an applicant for shares or debentures will or will not have the right to renounce in favour of other persons, but subject as aforesaid, this section shall apply to a prospectus or a form of application whether issued on or with reference to the formation of a company or subsequently. €) 584 SECRETARIAL PRACTICE (6) Nothing in this section shall limit or diminish any liability which any person may incur under the general law or this Act apart from this section. Restriction on 36.—(1) A company limited by shares or a company limited by Sltorailon of cod guarantee and having a share capital shall not previously to the in prospectus or Statutory meeting vary the terms of a contract referred to in the et ny! prospectus, or statement in lieu of prospectus, except subject to the approval of the statutory meeting. (2) This section shall not apply to a private company. Liability for 37.—(1) Where a prospectus invites persons to subscribe for prospectus. shares in or debentures of a company— (a) every person who is a director of the company at the time of the issue of the prospectus; and (b) every person who has authorised himself to be named and is named in the prospectus as a director or as having agreed to become a director either immediately or after an interval of time; and (c) every person being a promoter of the company; and (d) every person who has authorised the issue of the prospectus, shall be liable to pay compensation to all persons who subscribe for any shares or debentures on the faith of the prospectus for the loss or damage they may have sustained by reason of any untrue statement therein, or in any report or memorandum appearing on the face thereof, or by reference incorporated therein or issued therewith, unless it is proved— (i) that having consented to become a director of the company he withdrew his consent before the issue of the prospectus, and that it was issued without his authority or consent; or that the prospectus was issued without his knowledge or consent, and that on becoming aware of its issue he forthwith gave reasonable public notice that it was issued without his knowledge or consent; or that after the issue of the prospectus and before allotment thereunder, he, on becoming aware of any untrue statement therein, withdrew his consent thereto, and gave reasonable public notice of the withdrawal, and of the reason therefor; or (iv) that— (a) as regards every untrue statement not purporting to be made on the authority of an expert or of a public official document or statement, he had reasonable ground to believe, and did up to the time of the allotment of the shares or debentures, as the case may be, believe, that the statement was true; and (b) as regards every untrue statement purporting to be a statement by an expert or contained in what purports to be a copy of or extract from a report or valuation of COMPANIES ACT, TG72 an expert, it fairly represented the statement, or was a correct and fair copy of or extract from the report or valuation; and \¢) as regards every untrue statement purporting to Je a statement made by an official person or contained in what purports to be a copy of or extract from a public official document, it was a correct and fair representation of the statement or copy of or extract from the document: Provided that a person shall be liable to pay compensation as aforesaid if it is proved that he had no reasonable ground to believe that the person making any such statement, report or valuation as is mentioned in paragraph (iv) (b) of this subsection was competent to make it. (2) Where the prospectus contains the name of a person as a director of the company, or as having agreed to become a director thereof, and he has not consented to become a director, or has withdrawn his consent before the issue of the prospectus, and has not authorised or consented to the issue thereof, the directors of the company, except any without whose knowledge or consent the prospectus was issued, and any other person who authorised the issue thereof, shall be liable to indemnify the person named as aforesaid against all damages, costs, and expenses to which he may be made liable by reason of his name having been inserted in the prospectus, or in defending himself against any action or legal proceedings brought against him in respect thereof. (3) Every person who, by reason of his being a director or named as a director or as having agreed to become a director, or of his having authorised the issue of the prospectus, becomes liable to make any payment under this section may recover contribution, as in cases of contract, from any other person who, if sued separately, would have been liable to make the same payment, unless the person who has become so liable was, and that other person was not, guilty of fraudulent misrepresentation. (4) For the purposes of this section— The expression “promoter” means a promoter who was a party to the preparation of the prospectus, or of the portion thereof containing the untrue statement, but does not include any person by reason of his acting in a professional capacity for persons engaged in procuring the formation of the company: expression “‘expert’’ includes engineer, valuer, accountant, and any other person whose profession gives authoritv to a statement made bv him. 38.—(1) Where a company allots or agrees to allot any shares in or debentures of the company with a view to all or any of those shares or debentures being offered for sale to the public, any document by which the offer for sale to the public is made shall for all purposes be deemed to be a prospectus issued by the company, and all enactments and rules of law as to the contents of prospectuses Document conaining offer of shares or debenures for sale to be deemed prospectus. 386 SECRETARIAL PRACTICE and to liability in respect of statements in and omissions from prospectuses, or otherwise relaing to prospectuses, shall apply and have effect accordingly, as if the shares or debentures had been offered to the public for subscription and as if persons accepting the offer in respect of any shares or debentures were subscribers for those shares or debentures, but without prejudice to the liability, if any, of the persons by whom the offer is made, in respect of misstatements contained in the document or otherwise in respect thereof. (2) For the purposes of this Act, it shall, unless the contrary is proved, be evidence that an allotment of, or an agreement to allot, shares or debentures was made with a view to the shares or debentures being offered for sale to the public if it is shown— (a) that an offer of the shares or debentures or of any of them for sale to the public was made within six months after the allotment or agreement to allot; or that at the date when the offer was made the whole consideration to be received by the company in respect of the shares or debentures had not been so received. (3) Section thirty-four of this Act as applied by this section shall have effect as though the persons making the offer were persons named in a prospectus as directors of a company, and section thirty-five of this Act as applied by this section shall have effect as if it required a prospectus to state in addition to the matters required by that section to be stated in a prospectus— (a) the net amount of the consideration received or to be received by the company in respect of the shares or debentures to which the offer relates; and the place and time at which the contract under which the said shares or debentures have been or are to be allotted may be inspected. (4) Where a person making an offer to which this section relates is a company or a firm, it shall be sufficient if the document aforesaid is signed on behalf of the company or firm by two directors of the company or not less than half of the partners, as the case may be, and any such director or partner may sign by his agent authorised in writing. Allotment. Prohibition of 39.—(1) No allotment shall be made of any share capital of a allotment unless company offered to the public for subscription unless the amount scription stated in the prospectus as the minimum amount which, in the poceiveds opinion of the directors, must be raised by the issue of share capital in order to provide for the matters specified in paragraph 5 in Part I. of the Fourth Schedule to this Act has been subscribed, and the sum payable on application for the amount so stated has been paid to and received by the company. For the purposes of this subsection, a sum shall be deemed to have been paid to and received by the company if a cheque COMPANIES ACT, 1929 587 J for that sum has been received in good faith by the company and the directors of the company have no reason for suspecting that the cheque will not be paid. (2) The amount so stated in the prospectus shall be reckoned exclusively of any amount payable otherwise than in cash and is in this Act referred to as “the minimum subscription.” (3) The amount payable on application on each share shalj not be less than five per cent. of the nominal amount of the share, {4) If the conditions aforesaid have not been complied with on the expiration of forty days after the first issue of the prospectus, all money received from applicants for shares shall be forthwith repaid to them without interest, and, if any such money is not so repaid within forty-eight days after the issue of the prospectus, the directors of the company shall be jointly and severally liable to repay that money with interest at the rate of five per centum per annum from the expiration of the forty-eighth day: Provided that a director shall not be liable if he proves that the default in the repayment of the money was not due to any misconduct or negligence on his part. (5) Any condition requiring or binding any applicant for shares to waive compliance with any requirement of this section shall be void. (6) This section, except subsection (3) thereof, shall not apply to any allotment of shares subsequent to the first allotment o! shares offered to the public for subscription. 40.—(1) A company having a share capital which does not issue a prospectus on or with reference to its formation, or which nas issued such a prospectus but has not proceeded to allot any of the shares offered to the public for subscription, shall not allot any of its shares or debentures unless at least three days before the first allotment of either shares or debentures there has been delivered to the registrar of companies for registration a statement in lieu of prospectus, signed by every person who is named therein as a director or a proposed director of the company or by his agent authorised in writing, in the form and containing the particulars set out in the Fifth Schedule to this Act. (2) This section shall not apply to a private company, (3) If a company acts in contravention of this section, the company and every director of the company who knowingly authorises or permits the contravention shall be liable to a fine not exceedng one hundred pounds. 41.—(1) An allotment made by a company to an applicant in contravention of the provisions of the two last foregoing sections of this Act, shall be voidable at the instance of the applicant within one month after the holding of the statutory meeting of the company and not later, or, in any case where the company is not required to hold a statutory meeting, or where the allotment is made after Prohibition of illotment in certain cases inless statement mn lieu of prosspectus delivered to registrar. Effect of irregus lar allotment. 538 SECRETARIAL PRACTICE the holding of the statutory meeting, within one month after the date of the allotment, and not later, and shall be so voidable notwithstanding that the company is in course of being wound up. (2) If any director of a company knowingly contravenes, or permits or authorises the contravention of, any of the provisions of the said sections with respect to allotment, he shall be liable to compensate the company and the allottee respectively for any loss, damages, or costs which the company or the allottee may have sustained or incurred thereby: Provided that proceedings to recover any such loss, damages, or costs shall not be commenced after the expiration of two years from the date of the allotment, Return as to allotments. 54 & 5° Vic c. 39. 42.—(1x) Whenever a company limited by shares or a company limited by guarantee and having a share capital makes any allotment of its shares, the company shall within one month thereafter deliver to the registrar of companies for registration— 1a) a return of the allotments, stating the number and nominal amount of the shares comprised in the allotment, the names, addresses, and descriptions of the allottees, and the amount, if any, paid or due and payable on each share; and in the case of shares allotted as fully or partly paid up otherwise than in cash, a contract in writing constituting the title of the allottee to the allotment together with any contract of sale, or for services or other consideration in respect of which that allotment was made, such contracts being duly stamped, and a return stating the number and nominal amount of shares so allotted, the extent to which they are to be treated as paid up, and the consideration for which they have been allotted. ) (2) Where such a contract as above mentioned is not reduced to writing, the company shall within one month after the allotment deliver to the registrar of companies for registration the prescribed particulars of the contract stamped with the same stamp duty as would have been payable if the contract had been reduced to writing, and those particulars shall be deemed to be an instrument within the meaning of the Stamp Act, 1891, and the registrar may, as a condition of filing the particulars, require that the duty payable thereon be adjudicated under section twelve of that Act. (3) If default is made in complying with this section, every director, manager, secretary, or other officer of the company, who is knowingly a party to the default, shall be liable to a fine not exceeding fifty pounds for every day during which the default continues: Provided that, in case of default in delivering to the registrar of companies within one month after the allotment any document required to be delivered by this section, the company, or any person liable for the default, may apply to the court for relief, and the COMPANIES ACT, 1929 589 court, if satisfied that the omission to deliver the document was accidental or due to inadvertence or that it is just and equitable to grant relief, may make an order extending the time for the delivery of the document for such period as the court may think proper. Commissions and Discounts. 43.—(x) It shall be lawful for a company to pay a commission ower to pay to any person in consideration of his subscribing or agreeing to misione and subscribe, whether absolutely or conditionally, for any shares in prohibition of the company, or procuring or agreeing to procure subscriptions, £3ment of all whether absolute or conditional, for any shares in the company ve discounts, if— ; the payment of the commission is authorised by the articles; and the commission paid or agreed to be paid does not exceed ten per cent. of the price at which the shares are issued or the amount or rate authorised by the articles, whichever is the less; and the amount or rate per cent. of the commission paid or agreed to be paid is— (i) in the case of shares offered to the public for subscription, disclosed in the prospectus; or (1) in the case of shares not offered to the public for subscription, disclosed in the statement in lieu of prospectus, or in a statement in the prescribed form signed in iike manner as a statment in lieu of prospectus and delivered before the payment of the commission to the registrar of companies for registration, and, where a circular or notice, not being a prospectus, inviting subscription for the shares is issued, also disclosed in that circular or notice; and the number of shares which persons have agreed for a commission to subscribe absolutely is disclosed in manner aforesaid. v (2) Save as aforesaid, no company shall apply any of its shares or capital money either directly or indirectly in payment of any commission, discount, or allowance, to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares of the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares in the company, whether the shares or money be so applied by being added to the purchase money of any property acquired by the company or to the contract price of any work to be executed for the company, or the money be paid out of the nominal purchase money or contract price, or otherwise. (3) Nothing in this section shall affect the power of any company to pay such brokerage as it has heretofore been lawiul for a companv to nav 590 SECRETARIAL PRACTICE (4) A vendor to, promoter of, or other person who receives payment in money or shares from, a company shall have and shall be deemed always to have had power to apply any part of the money or shares so received in payment of any commission, the payment of which, if made directly by the company, would have been legal under this section. (5) If default is made in complying with the provisions of this section relating to the delivery to the registrar of the statement in the prescribed form, the company and every officer of the company who is in default shall be liable to a fine not exceeding twenty-five pounds. Statement in balance sheet as to commissions and discounts. Prohibition of provision of financial assistance by company for purchase of its own shares. 44.—(1) Where a company has paid any sums by way of commission in respect of any shares or debentures, or allowed any sums by way of discount in respect of any debentures, the total amount so paid or allowed, or so much thereof as has not been written off, shall be stated in every balance sheet of the company until the whole amount thereof has been written off. (2) If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a default fine. 45.—(1) Subject as provided in this section, it shall not be lawful ‘or a company to give, whether directly or indirectly, and whether by means of a loan, guarantee, the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase made or to be made by any person of any shares in the company: Provided that nothing in this section shall be taken to prohibit— (a) where the lending of money is part of the ordinary business of a company, the lending of money by the company in the ordinary course of its business; the provision by a company, in accordance with any scheme for the time being in force, of money for the purchase by trustees of fully-paid shares in the company to be held by or for the benefit of employees of the company, including any director holding a salaried employment or office in the company; the making by a company of loans to persons, other than directors, bond fide in the employment of the company with a view to enabling those persons to purchase fullypaid shares in the company to be held by themselves by way of beneficial ownership. (2) The aggregate amount of any outstanding loans made under the authority of provisos (b) and (¢) to subsection (1) of this section shall be shown as a separate item in every balance sheet of the company. (3) If a company acts in contravention of this section, the company and every officer of the company who is in default shall be liable to a fine not exceeding one hundred pounds. COMPANIES ACT, 1929 591 [ssue of Redeemable Preference Shares and Shares at Discount. 46.—(1) Subject to the provisions of this section, a company limited by shares may, if so authorised by its articles, issue preference shares which are, or at the option of the company are to be liable, to be redeemed: Provided that— fa) no such shares shall be redeemed except out of profits of the company which would otherwise be available for dividend or out of the proceeds of a fresh issue of shares made for the purposes of the redemption; no such shares shall be redeemed unless they are fully paid; where any such shares are redeemed otherwise than out of the proceeds of a fresh issue, there shall out of profits which would otherwise have been available for dividend be transferred to a reserve fund, to be called “the capital redemption reserve fund,” a sum equal to the amount applied in redeeming the shares, and the provisions of this Act relating to the reduction of the share capital of a company shall, except as provided in this section, apply as if the capital redemption reserve fund were paid-up share capital of the company; where any such shares are redeemed out of the proceeds of a fresh issue, the premium, if any, payable on redemption, must have been provided for out of the profits of the company before the shares are redeemed. (2) There shall be included in every balance sheet of a company which has issued redeemable preference shares a statement specifying what part of the issued capital of the company consists of such shares and the date on or before which those shares are, or are to be liable, to be redeemed. if a company fails to comply with the provisions of this subsection, the company and every officer of the company who is in default shall be liable to a fine not exceeding one hundred pounds. (3) Subject to the provisions of this section, the redemption of preference shares thereunder may be effected on such terms and in such manner as may be provided by the articles of the com: pany. 2) Power to issue redeemable preference shares. (4) Where in pursuance of this section a company has redeemed or is about to redeem any preference shares, it shall have power to issue shares up to the nominal amount of the shares redeemed or to be redeemed as if those shares had never been issued, and accordingly the share capital of the company shall not for the purposes of any enactments relating to stamp duty be deemed to be increased by the issue of shares in pursuance of this subsection: Provided that, where new shares are issued before the redemption of the old shares, the new shares shall not, so far as relates to stamp duty, be deemed to have been issued in pursuance of this subsection unless the old shares are redeemed within one month after the issue of the new shares. Power to issue shares at a discount. 592 SECRETARIAL PRACTICE (5) Where new shares have been issued in pursuance of the last foregoing subsection, the capital redemption reserve fund may, notwithstanding anything in this section, be applied by the company, up to an amount equal to the nominal amount of the shares so issued, in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares. 47.—(1) Subject as provided in this section, it shall be lawful for a company to issue at a discount shares in the company of a class already issued: Provided that— (a) the issue of the shares at a discount must be authorised by resolution passed in general meeting of the company, and must be sanctioned by the court; the resolution must specify the maximum rate of discount at which the shares are to be issued; not less than one year must at the date of the issue have elapsed since the date on which the company was entitled to commence business; the shares to be issued at a discount must be issued within one month after the date on which the issue is sanctioned by the court or within such extended time as the court may allow. (2) Where a company has passed a resolution authorising the issue of shares at a discount, it may apply to the court for an order sanctioning the issue, and on any such application the court, if, having regard to all the circumstances of the case, it thinks proper so to do, may make an order sanctioning the issue on such terms and conditions as it thinks fit. (3) Every prospectus relating to the issue of the shares and every balance sheet issued by the company subsequently to the issue of the shares must contain particulars of the discount allowed on the issue of the shares or of so much of that discount as has not been written off at the date of the issue of the document in question. If default is made in complying with this subsection, the company and every officer of the company who is in default shall be liable to a default fine. (d) Miscellaneous Provisions as to Shave Capital. Power of com 48. A company, if so authorised by its articles, may do any one pany to armange or more of the following things— erent on ng (1) Make arrangements on the issue of shares for a difference ‘ between the shareholders in the amounts and times of payment of calls on their shares: Accept from any member the whole or a part of the amount remaining unpaid on any shares held by him, although no part of that amount has been called up: Pay dividend in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others. COMPANIES ACT, 1929 503 49. A limited company may by special resolution determine that any portion of its share capital which has not been already called up shall not be capable of being called up, except in the event and for the purposes of the company being wound up, and thereupon that portion of its share capital shall not be capable of being called up except in the event and for the purposes aforesaid. 50.—(1) A company limited by shares or a company limited Dower of Some by guarantee and having a share capital, if so authorised by its ry SY articles, may alter the conditions of its memorandum as follows, its share capital. that is to say, it may— (@) increase its share capital by new shares of such amount as it thinks expedient; consolidate and divide all or any of its share capital “i. shares of larger amount than its existing shares; convert all or any of its paid-up shares into stock, and reconvert that stock into paid-up shares of any denomination; subdivide its shares, or any of them, into shares of smaller amount than is fixed by the memorandum, so, however, that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived; cancel shares which, at the date of the passing of the resolution in that behalf, have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled. (2) The powers conferred by this section must be exercised by the company in general meeting. (3) A cancellation of shares in pursuance of this section shall not be deemed to be a reduction of share capital within the meaning of this Act. 51.—(1) If a company having a share capital has— (a) consolidated and divided its share capital into shares of larger amount than its existing shares; or converted any shares into stock; or re-converted stock into shares: or subdivided its shares or any of them; or redeemed any redeemable preference shares; or cancelled any shares, otherwise than in connection with a reduction of share capital under section fifty-five of this Reserve liability of limited company. e) Act, it shall within one month after so doing give notice thereof to the registrar of companies specifying, as the case may be, the shares consolidated, divided, converted, subdivided. redeemed or cancelled, or the stock re-converted. (2) If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a default fine. 504 SECRETARIAL PRACTICE Notice ofin- * B52.~—(1) Where a company having a share capital, whether its ore share shares have or have not been converted into stock, has increased its share capital beyond the registered capital, it shall within fifteen days after the passing of the resolution authorising the increase, give to the registrar of companies notice of the increase, and the registrar shall record the increase. (2) The notice to be given as aforesaid shall include such particulars as may be prescribed with respect to the classes of shares affected and the conditions subject to which the new shares have been or are to be issued, and there shall be forwarded to the registrar of companies together with the notice a printed copy of the resolution authorising the increase. (3) If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a default fine. Power of un- 53. An unlimited company having a share capital may, by its Ee pany resolution for registration as a limited company in pursuance of rasoEve Share this Act, do either or both of the following things, namely :— en (x) Increase the nominal amount of its share capital by increasing the nominal amount of each of its shares, but subject to the condition that no part of the increased capital shall be capable of being called up except in the event and for the purposes of the company being wound up; Provide that a specified portion of its uncalled share capital shall not be capable of being called up except in the event and for the purposes of the company being wound up. Power of com- 54.—(1) Where any shares of a company are issued for the pany lo pay purpose of raising money to defray the expenses of the construction capital in certain Of any works or buildings or the provision of any plant which cannot cases. be made profitable for a lengthened period, the company may pay interest on so much of that share capital as is for the time being paid up for the period and subject to the conditions and restrictions in this section mentioned, and may charge the sum so paid by way of interest to capital as part of the cost of construction of the work or building, or the provision of plant: : Provided that— (a) No such payment shall be made unless it is authorised by the articles or by special resolution: No such payment, whether authorised by the articles or by special resolution, shall be made without the previous sanction of the Board of Trade: Before sanctioning any such payment the Board of Trade may, at the expense of the company, appoint a person to inquire and report to them as to the circumstances of the case, and may, before making the appointment, require the company to give security for the payment of the costs of the inquiry: COMPANIES ACT, 1929 595 The payment shall be made only for such period as may be determined by the Board of Trade, and that period shall in no case extend beyond the close of the half year next after the half year during which the works or buildings have been actually completed or the plant provided: The rate of interest shall in no case exceed four per cent. per annum or such other rate as may for the time being pe prescribed by Order in Council: The payment of the interest shall not operate as a reduction of the amount paid up on the shares in respect of which it is paid: The accounts of the company shall show the share capital on which, and the rate at which, interest has been paid out of capital during the period to which the accounts relate: Nothing in this section shall affect any company to which 57 & 58 Vict the Indian Railways Act, 1894, as amended by any cia. ’ subsequent enactment, applies. (2) If default is made in complying with proviso (g) to subsection (1) of this section, the company and every officer of the company who is in default shall be liable to a fine not exceeding fifty pounds. Reduction of Share Capital. 55.—(1) Subject to confirmation by the court, a company limited by shares or a company limited by guarantee and having a share capital may, if so authorised by its articles, by special resolution reduce its share capital in any way, and in particular, without prejudice to the generality of the foregoing power, may— {a) extinguish or reduce the liability on any of its shares in respect of share capital not paid up; or either with or without extinguishing or reducing liability on any of its shares, cancel any paid-up share capital which is lost or unrepresented by available assets; or either with or without extinguishing or reducing liability on any of its shares, pay off any paid-up share capital which is in excess of the wants of the company, and may, if and so far as is necessary, alter its memorandum by reducing the amount of its share capital and of its shares accordingly. (2) A special resolution under this section is in this Act refer to as ‘‘a resolution for reducing share capital.” 56.—(1) Where a company has passed a resolution for reducing share capital, it may apply by petition to the court for an order confirming the reduction. (2) Where the proposed reduction of share capital involves either diminution of liability in respect of unpaid share capital or the payment to any shareholder of any paid-up share capital, and in any other case if the court so directs, the following provisions shall have effect, subject nevertheless to the next following sub-section ;(— special resoluion for reduction of share capital. Application to court for confirming order, objections by creditors, and settlement of list of objecting creditors. -s 7 SECRETARIAL PRACTICE Every creditor of the company who at the date fixed by the court is entitled to any debt or clair which, if that date were the commencement of the winding up of the company, would be admissible in proof against the company, shall be entitled to object to the reduction: The court shall settle a list of creditors so entitled to object, and for that purpose shall ascertain, as far as possible without requiring an application from any creditor, the names of those creditors and the nature and amount of their debts or claims, and may publish notices fixing a day or days within which creditors not entered on the list are to claim to be so entered or are to be excluded from the right of objecting to the reduction: Where a creditor entered on the list whose debt or claim is not discharged or has not determined does not consent to the reduction, the court may, if it thinks fit, dispense with the consent of that creditor, on the company securing payment of his debt or, claim by appropriating, as the court may direct, the following amount: — (i) If the company admits the full amount of the debt or claim, or, though not admitting it, is willing to provide for it, then the full amount of the debt or claim; (ii) If the company does not admit and is not willing to provide for the full amount of the debt or claim, or if the amount is contingent or not ascertained, then an amount fixed by the court after the like inquiry and adjudication as if the company were being wound up bv the court. (a) ) ) (3) Where a proposed reduction of share capital involves either the diminution of any liability in respect of unpaid share capital or the payment to any shareholder of any paid-up share capital, the court may, if having regard to any special circumstances of the case it thinks proper so to do, direct that subsection (2) of this section shall not apply as regards any class or any classes of creditors. Order confirming 57.—(1) The court, if satisfied, with respect to every creditor of eon md + the company who under the last foregoing section is entitled to on making such object to the reduction, that either his consent to the reduction has oetder, been obtained or his debt or claim has been discharged or has determined, or has been secured, may make an order confirming the reduction on such terms and conditions as it thinks fit. (2) Where the court makes any such order, it may— (a) if for any special reason it thinks proper so to do, make an order directing that the company shall, during such period, commencing on or at any time after the date of the order, as is specified in the order, add to its name as the last words thereof the words “and reduced’; and make an order requiring the company to publish as the court directs the reasons for reduction or such other in- COMPANIES ACT, 1929 597 iormation in regard thereto as the court may think expedient with a view to giving proper information to the public, and, if the court thinks fit, the causes which led to the reduction. (3) Where a company is ordered to add to its name the words “and reduced,” those words shall, until the expiration of the period specified in the order, be deemed to be part of the name of the company. 58.—(1) The registrar of companies, on production to him of an order of the court confirming the reduction of the share capital of a company, and the delivery to him of a copy of the order and of a minute approved by the court, showing with respect to the share capital of the company, as altered by the order, the amount of the share capital, the number of shares into which it is to be divided, and the amount of each share, and the amount, if any, at the date of the registration deemed to be paid up on each share, shall register the order and minute. Registration of order and minute of reduction. (2) On the registration of the order and minute, and not before, the resolution for reducing share capital as confirmed by the order so registered shall take effect. (3) Notice of the registration shall be published in such manner as the court may direct. 4) The registrar shall certify under his hand the registration of the order and minute, and his certificate shall be conclusive evidence that all the requirements of this Act with respect to reduction of share capital have been complied with, and that the share capital of the company is such as is stated in the minute. {5) The minute when registered shall be deemed to be substituted for the corresponding part of the memorandum, and shall be valid and alterable as if it had been originally contained therein. (6) The substitution of any such minute as aforesaid for part of the memorandum of the company shall be deemed to be an alteration of the memorandum within the meaning of section twentv-four of this Act 59.—(1) In the case of a reduction of share capital, a member Liability of of the company, past or present, shall not be liable in respect of members in g . . respect of reany share to any call or contribution exceeding in amount the guid shares difference, if any, between the amount of the share as fixed by the minute and the amount paid, or the reduced amount, if any, which is to be deemed to have been paid, on the share, as the case may be: Provided that, if any creditor, entitled in respect of any debt or claim to object to the reduction of share capital, is, by reason of his ignorance of the proceedings for reduction, or of their nature and effect with respect to his claim, not entered on the list of creditors, and, after the reduction, the company is unable, within the meaning of the provisions of this Act with respect to winding up by the court, to pay the amount of his debt or claim then—— 363 SECRETARIAL PRACTICE every person who was a member of the company at the date of the registration of the order for reduction and minute, shall be liable to contribute for the payment of that debt or claim an amount not exceeding the amount which he would have been liable to contribute if the company had commenced to be wound up on the day before the said date; and if the company is wound up, the court, on the application of any such creditor and proof of his ignorance as aforesaid, may, if it thinks fit, settle accordingly a list of persons so liable to contribute, and make and enforce calls and orders on the contributories settled on the list, as if they were ordinary contributories in a winding up. (2) Nothing in this section shall affect the rights of the contributories among themselves. Penalty on cons 60. If any director, manager, secretary or other officer of the name of creditor, COMPpany— (1) wilfully conceals the name of any creditor entitled to object to the reduction; or 2) wilfully misrepresents the nature or amount of the debt or claim of any creditor; or (3) aids, abets or is privy to any such concealment or misrepresentation as aforesaid, he shall be guilty of a misdemeanour. Variation of Shareholders’ Righis. Rights of holders of special classes of shares. 61.—(1) If in the case of a company, the share capital of which is divided into different classes of shares, provision is made by the memorandum or articles for authorising the variation of the rights attached to any class of shares in the company, subject to the consent of any specified proportion of the holders of the issued shares of that class or the sanction of a resolution passed at a separate meeting of the holders of those shares, and in pursuance of the said provision the rights attached to any such class of shares are at any time varied, the holders of not less in the aggregate than fifteen per cent. of the issued shares of that 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 application is made, the variation shall not have effect unless and until it is confirmed by the court. (2) An application under this section must be made within seven days after the date on which the consent was given or the resolution was passed, as the case may be, and may be made on behalf of the shareholders entitled to make the application by such one or more of their number as they may appoint in writing for the purpose. COMPANIES ACT, 1929 599 {3) On any such application the court, after hearing the applicant and any other persons who apply to the court to be heard and appear to the court to be interested in the application, may, if it is satisfied, having regard to all the circumstances of the case, that the variation would unfairly prejudice the shareholders of the class represented by the applicant, disallow the variation and shall, if not so satisfied, confirm the variation. (4) The decision of the court on any such application shall be Anal. (5) The company shall within fifteen days after the making of an order by the court on any such application forward a copy of the order to the registrar of companies, and, if default is made in complying with this provision, the company and every officer of the company who is in default shall be liable to a default fine. (6) The expression ‘variation’ in this section includes abrogation and the expression ‘‘ varied ’’ shall be construed accordingly. Transfer of Shaves and Debentures, Evidence of Title, &c. 62.—(1) The shares or other interest of any member in a company shall be personal estate, transferable in manner provided by the articles of the company, and shall not be of the nature of real estate. (2) Each share in a company having a share capital shall be distinguished by its appropriate number. 63. Notwithstanding anything in the articles of a company, it shall not be lawful for the company to register a transfer of shares in or debentures of the company unless a proper instrument of transfer has been delivered to the company: Provided that nothing in this section shall prejudice any power of the company to register as shareholder or debenture holder any person to whom the right to any shares in or debentures of the company has been transmitted by operation of law. 64. A transfer of the share or other interest of a deceased member of a company made by his personal representative shall, although the personal representative is not himself a member of the company, be as valid as if he had been such a member at the time of the execution of the instrument of transfer. 65. On the application of the transferor of any share or interest in a company, the company shall enter in its register of members the name of the transferee in the same manner and subject to the same conditions as if the application for the entry were made by the transferee. 66.—(1) If a company refuses to register a transfer of any shares or debentures, the company shall, within two months after the date on which the transfer was lodged with the company, send to the transferee notice of the refusal. Nature of shares. Transfer not to pe registered except on production of 1nstrument of transfer. Transfer by personal representative. Registration of ransfer at request of transferor. Notice of refusal ‘0 register rransfer, Duties of company with respect to issue of certificates, SECRETARIAL PRACTICE (2) If default is made in complying with this section, the company and every director, manager, secretary or other officer of the company who is knowingly a party to the default shall be liable to a fine not exceeding five pounds for every day during which ‘he default continues. 67.—(1) Every company shall, within two months after the allotment of any of its shares, debentures, or debenture stock, and within two months after the date on which a transfer of any such shares, debentures, or debenture stock, is lodged with the company, complete and have ready for delivery the certificates of all shares, the debentures, and the certificates of all debenture stock allotted or transferred, unless the conditions of issue of the shares, debentures, or debenture stock otherwise provide. The expression ‘transfer’ for the purpose of this subsection means a transfer duly stamped and otherwise valid, and does not include such a transfer as the company is for any reason entitled to refuse to register and does not register. (2) If default is made in complying with this section, the company and every director, manager, secretary or other officer of the company who is knowingly a party to the default shall be liable to a fine not exceeding five pounds for every day during which the default continues. (3) If any company on whom a notice has been served requiring the company to make good any default in complying with the provisions of subsection (1) of this section fails to make good the default within ten days after the service of the notice, the court may, on the application of the person entitled to have the certificates or the debentures delivered to him, make an order directing the company and any officer of the company to make good the default within such time as may be specified in the order, and any such order may provide that all costs of and incidental to the application shall be borne by the company or by any officer of the company responsible for the default. Certificate to be 08. A certificate, under the common seal of the company, specifyevidence of title. ing any shares held by any member, shall be primé facie evidence of the title of the member to the shares. Evidence of 69. The production to a company of any document which is by grant of probate. Jaw sufficient evidence of probate of the will, or letters of administration of the estate, or confirmation as executor, of a deceased person having been granted to some person shall be accepted by the company, notwithstanding anything in its articles, as sufficient evidence of the grant. Issue and effect ~~ 70.—(I) A company limited by shares, if so authorised by its of ShaTe WHTTaTIE articles, may, with respect to any fully paid-up shares, issue under ’ its common seal a warrant stating that the bearer of the warrant is entitled to the shares therein specified, and may provide, by coupons or otherwise, for the payment of the future dividends on the shares included in the warrant. COMPANIES ACT, 192¢ (2) Such a warrant as aforesaid is in this Act termed a ‘‘share warrant.” (3) A share warrant shall entitle the bearer thereof to the shares therein specified, and the shares may be transferred bv lelivery of the warrant. 71. If any person falsely and deceitfully personates any owner of any share or interest in any company, or of any share warrant or coupon, issued in pursuance of this Act, and thereby obtains or endeavours to obtain any such share or interest or share warrant or coupon, or receives or endeavours to receive any money due to any such owner, as if the offender were the true and lawful owner, he shall be guilty of felony, and shall on conviction thereof be liable, at the discretion of the court, to be kept in penal servitude for life or for any term not less than three years. 72.—(1) If in Scotland any person— {a) with intent to defraud, forges or alters, or offers, utters, disposes of, or puts off, knowing the same to be forged or altered, any share warrant or coupon, or any document purporting to be a share warrant or coupon, issued in pursuance of this Act; or by means of any such forged or altered share warrant, coupon, or document, purporting as aforesaid, demands or endeavours to obtain or receive any share or interest in any company under this Act, or to receive any dividend or money payable in respect thereof, knowing the warrant, coupon, or document to be forged or altered; he shall be guilty of felony and shall on conviction thereof be liable at the discretion of the court to be kept in penal servitude for lif: or for any term not less than three years. } (2) If in Scotland any person without lawful authority excuse, proof whereof shall lie on him— (a) engraves or makes on any plate, wood, stone, or other material any share warrant or coupon purporting to be— (1) a share warrant or coupon issued or made by any particular company in pursuance of this Act; or (i) a blank share warrant or coupon so issued made; or (iii) a part of such a share warrant or coupon; or uses any such plate, wood, stone, or other material for the making or printing of any such share warrant or coupon, or of any such blank share warrant or coupon, or any nart thereof respectively; or knowingly has in his custody or possession any such nlate, wood, stone, or other material; he shall be guilty of felony, and shall on conviction thereof be liable, at the discretion of the court, to be kept in penal servitude for any term not exceeding fourteen years and not less than three vears. or Penalty for personation of shareholder. Offences in conection with share warrants in Scotland, Right of debenture holders and shareholders to inspect register of debenture holders and to have copies of trust deed. Perpetual debentures. z =. SECRETARIAL PRACTICE Special Provisions as to Debentures. 73.—(1) Every register of holders of debentures of a company shall, except when duly closed, be open to the inspection of the registered holder of any such debentures, and of any holder of shares in the company, but subject to such reasonable restrictions as the company may in general meeting impose, so that not less than two hours in each day shall be allowed for inspection. For the purposes of this subsection, a register shall be deemed to be duly closed if closed in accordance with provisions contained in the articles or in the debentures or, in the case of debenture stock, in the stock certificates, or in the trust deed or other document securing the debentures or debenture stock, during such period or periods, not exceeding in the whole thirty days in any year, as may be therein specified. (2) Every registered holder of debentures and every holder of shares in a company may require a copy of the register of the holders of debentures of the company or any part thereof on payment of sixpence for every hundred words required to be copied. (3) A copy of any trust deed for securing any issue of debentures shall be forwarded to every holder of any such debentures at his request on payment in the case of a printed trust deed of the sum of one shilling or such less sum as may be prescribed by the company, or, where the trust deed has not been printed, on payment of sixpence for every hundred words required to be copied. (4) Ifinspection is refused, or a copy is refused or not forwarded, the company and every officer of the company who is in default shall be liable to a fine not exceeding five pounds, and further shall be liable to a default fine of two pounds. (5) Where a company is in default as aforesaid, the court may by order compel an immediate inspection of the register or direct that the copies required shall be sent to the person requiring them. 74. A condition contained in any debentures or in any deed for securing any debentures, whether issued or executed before or after the commencement of this Act, shall not be invalid by reason only that the debentures are thereby made irredeemable or redeemable only on the happening of a contingency, however remote, or on the expiration of a period, however long, any rule of equity to the contrary notwithstanding. Power to re- 75.—(1) Where either before or after the commencement of this igh Dadesmed Act a company has redeemed any debentures previously issued, certain cases. then— . (4) unless any provision to the contrary, whether express or implied, is contained in the articles or in any contract entered into by the company; or unless the company has, by passing a resolution to that effect or by some other act, manifested its intention that the debentures shall be cancelled. COMPANIES ACT, 1929 503 the company shall have, and shall be deemed always to have had, power to re-issue the debentures, either by re-issuing the same debentures or by issuing other debentures in their place. {2) On a re-issue of redeemed debentures the person entitled to the debentures shall have, and shall be deemed always to have had, the same priorities as if the debentures had never been redeemed. (3) Where a company has power to re-issue debentures which have been redeemed, particulars with respect to the debentures which can be so re-issued shall be included in every balance sheet of the company. {4) Where a company has either before or after the passing of this Act deposited any of its debentures to secure advances from time to time on current account or otherwise, the debentures shall not be deemed to have been redeemed by reason only of the account of the company having ceased to be in debit whilst the debentures remained so deposited. (5) The re-issue of a debenture or the issue of another debenture in its place under the power by this section given to, or deemed to have been possessed by, a company, whether the re-issue or issue was made before or after the passing of this Act, shall be treated as the issue of a new debenture for the purposes of stamp duty, but it shall not be so treated for the purposes of any provision limiting the amount or number of debentures to be issued: Provided that any person lending money on the security of a debenture re-issued under this section which appears to be duly stamped may give the debenture in evidence in any proceedings for enforcing his security without payment of the stamp duty or any penalty in respect thereof, unless he had notice or, but for his negligence, might have discovered, that the debenture was not duly stamped, but in any such case the company shall be liable to pay the proper stamp duty and penalty. (6) Where any debentures which have been redeemed before the date of the commencement of this Act are re-issued subsequently to that date, the re-issue of the debentures shall not prejudice any right or priority which any person would have had under or by virtue of any mortgage or charge created before the date of the commencement of this Act, if section one hundred and four of the Companies (Consolidation) Act, 1908, as originally enacted, had been enacted in this Act instead of this section. 3 Edw. 7. c. 69. 76. A contract with a company to take up and pay for any Specific performdebentures of the company mav be enforced by an order for specific anes of conieaeis performance. debentures. 77. It is hereby declared that, notwithstanding anything contained in the statute of the Scots Parliament of 1696, chapter twenty-five, debentures to bearer issued in Scotland are valid and binding according to their terms. Validity of lebentures to dearer in Scot. land. 604 SECRETARIAL PRACTICE Pry 2 78.—(1) Where, in the case of a company registered in England, ar either a receiver is appointed on behalf of the holders of any deben-2 Soaring tures of the company secured by a floating charge, or possession is prionity to taken by or on behalf of those debenture holders of any property Salm uiller comprised in or subject to the charge, then, if the company is not ge at the time in course of being wound up, the debts which in every winding-up are under the provisions of Part V of this Act relating to preferential payments to be paid in priority to all other debts, shall be paid out of any assets coming to the hands of the receiver or other person taking possession as aforesaid in priority to any claim for principal or interest in respect of the debentures. (2) The periods of time mentioned in the said provisions of Part V of this Act shall be reckoned from the date of the appointment of the receiver or of possession being taken as aforesaid, as the case may be. (3) Any payments made under this section shall be recouped as far as may be out of the assets of the company available for payment of general creditors. Part III, REGISTRATION OF CHARGES, Registration of charges created by companies registered in England. Registyation of Charges with Registrav of Companies. 79.—(1) Subject to the provisions of this Part of this Act, every charge created after the fixed date by a company registered in England and being a charge to which this section applies shall, so far as any security on the company’s property or undertaking is conferred thereby, be void against the liquidator and any creditor of the company, unless the prescribed particulars of the charge, together with the instrument, if any, by which the charge is created or evidenced, are delivered to or received by the registrar of companies for registration in manner required by this Act within twentyone days after the date of its creation, but without prejudice to any contract or obligation for repayment of the money thereby secured, and when a charge becomes void under this section the money secured thereby shall immediately become payable. (2) This section applies to the following charges:— (a) a charge for the purpose of securing any issue of debentures; (b) a charge on uncalled share capital of the company; (¢) a charge created or evidenced by an instrument which, if executed by an individual, would require registration as a bill of sale; (d) a charge on land, wherever situate, or any interest therein; (¢) a charge on book debts of the company; (f) a floating charge on the undertaking or property of the company; COMPANIES ACT, 1929 hos (g) a charge on calls made but not paid; (#) a charge on a ship or any share in a ship; (f) a charge on goodwill, on a patent or a licence under a patent, on a trademark or on a copyright or a licence under a copyright. (3) In the case of a charge created out of the United Kingdom comprising solely property situate outside the United Kingdom, the delivery to and the receipt by the registrar of a copy verified in the prescribed manner of the instrument by which the charge is created or evidenced, shall have the same effect for the purposes of this section as the delivery and receipt of the instrument itself, and twenty-one days after the date on which the instrument or copy could, in due course of post, and if despatched with due diligence, have been received in the United Kingdom, shall be substituted for twenty-one days after the date of the creation of the charge, as the time within which the particulars and instrument or copy are to be delivered to the registrar. {4) Where a charge is created in the United Kingdom but comprises property outside the United Kingdom, the instrument creating or purporting to create the charge may be sent for registration under this section notwithstanding that further proceedings may be necessary to make the charge valid or effectual according to the law of the country in which the property is situate. (5) Where a charge comprises property situate in Scotland or Northern Ireland and registration in the country where the property is situate is necessary to make the charge valid or effectual according to the law of that country, the delivery to and the receipt by the registrar of a copy verified in the prescribed manner of the instrument by which the charge is created or evidenced, together with a certificate in the prescribed form stating that the charge was presented for registration in Scotland or Northern Ireland, as the case may be, on the date on which it was so presented shall, for the purposes of this section, have the same effect as the delivery and receipt of the instrument itself. (6) Where a negotiable instrument has been given to secure the payment of any book debts of a company the deposit of the instrument for the purpose of securing an advance to the company shall not for the purposes of this section be treated as a charge on those book debts. (7) The holding of debentures entitling the holder to a charge on land shall not for the purposes of this section be deemed to be an interest in land. (8) Where a series of debentures containing, or giving by reference to any other instrument, any charge to the benefit of which the debenture holders of that series are entitled pari passu is created by a company, it shall for the purposes of this section be sufficient if there are delivered to or received by the registrar within twenty-one days after the execution of the deed containing the 506 SECRETARIAL PRACTICE charge or, if there is no such deed, after the execution of any debentures of the series, the following particulars:— (a) the total amount secured by the whole series; and (b) the dates of the resolutions authorising the issue of the series and the date of the covering deed, if any, by which the security is created or defined; and (c) a general description of the property charged; and (@d) the names of the trustees, if any, for the debenture holders: together with the deed containing the charge, or, if there is no such deed, one of the debentures of the series. Provided that, where more than one issue is made of debentures in the series, there shall be sent to the registrar for entry in the register particulars of the date and amount of each issue, but an omission to do this shall not affect the validity of the debentures issued, (9) Where any commission, allowance, or discount has been paid or made either directly or indirectly by a company to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any debentures of the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any such debentures, the particulars required to be sent for registration under this section shall include particulars as to the amount or rate per cent. of the commission, discount, or allowance so paid or made, but omission to do this shall not affect the validity of the debentures issued: Provided that the deposit of any debentures as security for any debt of the company shall not for the purposes of this subsection be treated as the issue of the debentures at a discount. (10) In this Part of this Act— (a) the expression ‘charge’ includes mortgage; (b) the expression ‘“the fixed date” means in relation to the charges specified in paragraphs (a) to (f), both inclusive, of subsection (2) of this section, the first day of July, nineteen hundred and eight, and in relation to the charges specified in paragraphs (g) to (¢), both inclusive, of the said subsection, the commencement of this Act. Duty of company to register charges created by company. 80.—(1) It shall be the duty of a company to send to the registrar of companies for registration the particulars of every charge created by the company and of the issues of debentures of a series, requiring registration under the last foregoing section, but registration of any such charge may be effected on the application of any person interested therein, (2) Where registration is effected on the application of some person other than the company, that person shall be entitled to recover from the company the amount of any fees properly paid by him to the registrar on the registration. COMPANIES ACT, 1929 6507 (3) If any company makes default in sending to the registrar for registration the particulars of any charge created by the company, or of the issues of debentures of a series, requiring registration as aforesaid, then, unless the registration has been effected on the application of some other person, the company and every director, manager, secretary, or other person, who is knowingly a party to the default shall be liable to a fine not exceeding fifty pounds for svery day during which the default continues. 81.—(1) Where after the commencement of this Act a company registered in England acquires any property which is subject to a charge of any such kind as would, if it had been created by the company after the acquisition of the property, have been required to be registered under this Part of this Act, the company shall cause the prescribed particulars of the charge, together with a copy (certified in the prescribed manner to be a correct copy) of the instrument, if any, by which the charge was created or is evidenced, to be delivered to the registrar of companies for registration in manner required by this Act within twenty-one days after the date on which the acquisition is completed: Provided that, if the property is situate and the charge was created outside Great Britain, twenty-one days after the date on which the copy of the instrument could in due course of post, and if despatched with due diligence, have been received in the United Kingdom shall be substituted for twenty-one days after the completion of the acquisition as the time within which the particulars and the copy of the instrument are to be delivered to the registrar. 2) If default is made in complying with this section, the company and every officer of the company who is in default shall pe liable to a default fine of fifty pounds. 82.—(1) The registrar of companies shall keep, with respect to cach company, a register in the prescribed form of all the charges requiring registration under this Part of this Act, and shall, on payment of the prescribed fee, enter in the register with respect to such charges the following particulars:— (a) in the case of a charge to the benefit of which the holders of a series of debentures are entitled, such particulars as are specified in subsection (8) of section seventy-nine of this Act; in the case of any other charge— b) Duty of com->any to register :harges existing yn property acquired. Register of :harges to be kept by registrar nf companies. (i) if the charge is a charge created by the company, the date of its creation, and if the charge was a charge existing on property acquired by the company, the date of the acquisition of the property; and (ii) the amount secured by the charge; and (iif) short particulars of the property charged; and ‘iv’ the persons entitled to the charge. 608 SECRETARIAL PRACTICE (2) The registrar shall give a certificate under his hand of the registration of any charge registered in pursuance of this Part of this Act, stating the amount thereby secured, and the certificate shall be conclusive evidence that the requirements of this Part of this Act as to registration have been complied with. (3) The register kept in pursuance of this section shall be open to inspection by any person on payment of the prescribed fee, not exceeding one shilling for each inspection. (4) The registrar shall keep a chronological index, in the prescribed form and with the prescribed particulars, of ‘the charges entered in the register. Endorsement of 83.—(1) The company shall cause a copy of every certificate of ate of on Tegistration given under the last foregoing section to be endorsed debentures. on every debenture or certificate of debenture stock which is issued by the company, and the payment, of which is secured by the charge so registered: Provided that nothing in this subsection shall be construed as requiring a company to cause a certificate of registration of any charge so given to be endorsed on any debenture or certificate of debenture stock issued by the company before the charge was created. (2) If any person knowingly and wilfully authorises or permits the delivery of any debenture or certificate of debenture stock which under the provisions of this section is required to have endorsed on it a copy of a certificate of registration without the copy being so endorsed upon it, he shall, without prejudice to any other liability, be liable to a fine not exceeding one hundred pounds. 84. The registrar of companies may, on evidence being given to his satisfaction that the debt for which any registered charge was given has been paid or satisfied, order that a memorandum of satisfaction be entered on the register, and shall, if required, furnish the company with a copy thereof. Entry of satisfaction, Rectification of register of charges. 85. The court, on being satisfied that the omission to register a charge within the time required by this Act, or that the omission or misstatement of any particular with respect to any such charge or in a memorandum of satisfaction, was accidental, or due to inadvertence or to some other sufficient cause, or is not of a nature to prejudice the position of creditors or shareholders of the company, or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any person interested, and on such terms and conditions as seem to the court just and expedient, order that the time for registration shall be extended, or, as the case may be, that the omission or misstatement shall be rectified. Registration of ~~ 86.—(1) If any person obtains an order for the appointment of enforcement of 3 : iy a receiver or manager of the property of a company, or appoints such a receiver or manager under any powers contained in anv COMPANIES ACT, 1929 600 instrument, he shall, within seven days from the date of the order or of the appointment under the said powers, give notice of the fact to the registrar of companies, and the registrar shall, on payment of the prescribed fee, enter the fact in the register of charges. (2) Where any person appointed receiver or manager of the property of a company under the powers contained in any instrument ceases to act as such receiver or manager, he shall, on so ceasing, give the registrar of companies notice to that effect, and the registrar shall enter the notice in the register of charges. (3) If any person makes default in complying with the requirements of this section, he shall be liable to a fine not exceeding ive pounds for every day during which the default continues. Provisions as to Company’s Register of Charges and as to Cop: of Instruments creating Charges. 87. Every company shall cause a copy of every instrument Copies of instrucreating any charge requiring registration under this Part of this Jets creating 2 ges to be Act to be kept at the registered office of the company: kept by com-Provided that, in the-case of a series of uniform debentures, a Paoycopy of one debenture of the series shall be sufficient. 88.—(1) Every limited company shall keep at the registered office of the company a register of charges and enter therein all charges specifically affecting property of the company and all loating charges on the undertaking or any property of the company, giving in each case a short description of the property charged, the amount of the charge, and, except in the case of securities to bearer. the names of the persons entitled thereto. (2) If any director, manager, or other officer of the company <nowingly and wilfully authorises or permits the omission of anv :ntry required to be made in pursuance of this section, he shall ‘-iable to a fine not exceeding fifty pounds. 89.—(1) The copies of instruments creating any charge requiring registration under this Part of this Act with the registrar of companies, and the register of charges kept in pursuance of the last foregoing section, shall be open during business hours (but subject to such reasonable restrictions as the company in general meeting may impose, so that not less than two hours in each day shall be allowed for inspection) to the inspection of any creditor or member of the company without fee, and the register of charges shall also be open to the inspection of any other person on payment of such fee, not exceeding one shilling for each inspection, as the company may prescribe. (2) If inspection of the said copies or register is refused, any officer of the company refusing inspection, and every director and manager of the company authorising or knowingly and wilfully permitting the refusal, shall be liable to a fine not exceeding five pounds, and a further fine not exceeding two pounds for every day during which the refusal continues. Company's register of ~harges. Right to inspect copies of instrunents creating nortgages and :harges and com-’any’s register f charges. HID SECRETARIAL PRACTICE (3) If any such refusal occurs in relation to a company registered in England, the court may by order compel an immediate inspection of the copies or register. Application of Part III. to Companies incorporated outside England, prplication of 90. The provisions of this Part of this Act shall extend to charges charges created, on property in England which are created, and to charges on property and property in England which is acquired, after the commencement of this ject to charge 1 qn . ‘ acquired by Act by a company (whether a company within the meaning of boratod outside this Act or not) incorporated outside England which has an estab-England, lished place of business in England. Transitional Provision as to matters vequived to be registered under this Act, but not under formev Acls. Provision as to 91.—(1) It shall be the duty of a company within six months Shupges created, after the commencement of this Act to send to the registrar ot ges on . . . . . property ac- companies for registration the prescribed particulars of— i A (a) any charge created by the company before the date of the commencement commencement of this Act and remaining unsatisfied at 7 ach, that date, which would have been required to be registered under the provisions of paragraphs (g), (#) and (i) of subsection (2) of section seventy-nine of this Act or under the orovisions of section ninety of this Act, if the charge had been created after the commencement of this Act; and any charge to which any property acquired by the company before the commencement of this Act is subject and which would have been required to be registered under the provisions of section eighty-one of this Act or under the provisions of section ninety of this Act, if the property had been acquired after the commencement of this Act. (2) The registrar, on payment of the prescribed fee, shall enter the said particulars on the register kept by him in pursuance of this Part of this Act. (3) If a company fails to comply with this section, the company and every director, manager, secretary or other officer of the company, or other person who is knowingly a party to the default shall be liable to a fine not exceeding fifty pounds for every day during which the default continues: Provided that the failure of the company shall not prejudice any rights which any person in whose favour the charge was made may have thereunder. (4) For the purposes of this section, the expression ‘company includes a company (whether a company within the meaning of this Act or not) incorporated outside England which has an established place of business in England. COMPANIES ACT, 1929 I Part IV, VIANAGEMENT AND ADMINISTRATION, Registered Office and Name, 92.—(1) A company shall, as from the day on which it begins to carry on business or as from the twenty-eighth day after the date of its incorporation, whichever is the earlier, have a registered office to which all communications and notices may be addressed. (2) Notice of the situation of the registered office, and of any change therein, shall be given within twenty-eight days after the ate of the incorporation of the company or of the change, as the case may be, to the registrar of companies, who shall record the same. The inclusion in the annual return of a company of a statement as to the address of its registered office shall not be taken to satisfy the obligation imposed by this subsection, (3) If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a default fine. 93.—(1) Every company— (a) shall paint or affix, and keep painted or affixed, its name on the outside of every office or place in which its business is carried on, in a conspicuous position, in letters easily legible; shall have its name engraven in legible characters on its seal; shall have its name mentioned in legible characters in all notices, advertisements, and other official publications of the company, and in all bills of exchange, promissory notes, endorsements, cheques, and orders for money or goods purporting to be signed by or on behalf of the company, and in all bills of parcels, invoices, receipts, and letters of credit of the company. (2) If a company does not paint or affix its name in manner directed by this Act, the company and every officer of the company who is in default shall be liable to a fine not exceeding five pounds, and if a company does not keep its name painted or affixed in manner so directed, the company and every officer of the company who is in default shall be liable to a default fine. (3) If a company fails to comply with paragraph (b) or paragraph (c) of subsection (1) of this section, the companv 1 Me liable to a fine not exceeding fiftv pounds. (4) If a director, manager. - officer of a compan: person on its behalf—-(a) uses or authorises the use of any seal purporting to be a seal of the company whereon its name is not so engraven as aforesaid: or registered ofhice of company. Publication of 1ame by -ompany. co SECRETARIAL PRACTICE b) issues or authorises the issue of any notice, advertisement, or other official publication of the company, or signs or authorises to be signed on behalf of the company any bill of exchange, promissory note, endorsement, cheque, or order for money or goods, wherein its name is not mentioned in manner aforesaid; or issues or authorises the issue of any bill of parcels, invoice, receipt, or letter of credit of the company, wherein its name is not mentioned in manner aforesaid: lc) he shall be liable to a fine not exceeding fifty pounds, and shall further be personally liable to the holder of the bill of exchange, promissory note, cheque, or order for money or goods, for the amount thereof, unless it is duly paid by the company. Restrictions on Commencement of Business, Restrictions on commencement of business. 94.—(1) Where a company having a share capital has issued a prospectus inviting the public to subscribe for its shares, the company shall not commence any business or exercise any borrowing powers anless— (a) shares held subject to the payment of the whole amount thereof in cash have been allotted to an amount not less in the whole than the minimum subscription; and every director of the company has paid to the company, on each of the shares taken or contracted to be taken by him and for which he is liable to pay in cash, a proportion equal to the proportion payable on application and allotment on the shares offered for public subscription; and there has been delivered to the registrar of companies for registration a statutory declaration by the secretary or one of the directors, in the prescribed form, that the aforesaid conditions have been complied with. (2) Where a company having a share capital has not issued a prospectus inviting the public to subscribe for its shares, the company shall not commence any business or exercise any borrowing powers, unless— (a) there has been delivered to the registrar of companies for registration a statement in lieu of prospectus; and every director of the company has paid to the company, on each of the shares taken or contracted to be taken by him and for which he is liable to pay in cash, a proportion equal to the proportion payable on application and allotment on the shares payable in cash; and there has been delivered to the registrar of companies for registration a statutory declaration by the secretary or one of the directors in the prescribed from that paragraph (b) of this subsection has been complied with. COMPANIES ACT, 1929 h13 (3) The registrar of companies shall, on the delivery to him of the said statutory declaration, and, in the case of a company which is required by this section to deliver a statement in lieu of prospectus, of such a statement, certify that the company is entitled to commence business, and that certificate shall be conclusive evidence that the company is so entitled. 4) Any contract made by a company before the date at which it is entitled to commence business shall be provisional only, and shall not be binding on the company until that date, and on that date it shall become binding. (5) Nothing in this section shall prevent the simultaneous offer for subscription or allotment of any shares and debentures or the receipt of any money payable on application for debentures. (6) If any company commences business or exercises borrowing powers in contravention of this section, every person who is responsible for the contravention shall, without prejudice to any other liability, be liable to a fine not exceeding fifty pounds for every day during which the contravention continues. (7) Nothing in this section shall apply to a) a private company; or b) a company registered before the first day of January, nineteen hundred and one; or a company registered before the first day of July, nineteen hundred and eight, which has not issued a prospectus inviting the public to subscribe for its shares. Register of Members. 95.—(1) Every company shall keep in one or more books a Register of register of its members, and enter therein the following particulars :— members. ‘a) The names and addresses, and the occupations, if any, of the members, and in the case of a company having a share capital a statement of the shares held by each member, distinguishing each share by its number, and of the amount paid or agreed to be considered as paid on the shares of each member; The date at which each person was entered in the register as a member; The date at which any person ceased to be a member: Provided that, where the company has converted any of its shares into stock and given notice of the conversion to the registrar of companies, the register shall show the amount of stock held by each member instead of the amount of shares and the particulars relating to shares specified in paragraph (a) of this subsection. (2) If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a default fine. ) Index of members of company. 514 SECRETARIAL PRACTICE 96.—(1) Every company having more than fifty members shall, unless the register of members is in such a form as to constitute in itself an index, keep an index of the names of the members of the company and shall, within fourteen days after the date on which any alteration is made in the register of members, make any necessary alteration in the index. (2) The index, which may be in the form of a card index, shall in respect of each member contain a sufficient indication to enable the account of that member in the register to be readily found. (3) If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a default fine. Prvisiqos as to 97,—(1) On the issue of a share warrant the company shall latins to Strike out of its register of members the name of the member then share warrants. entered therein as holding the shares specified in the warrant as if he had ceased to be a member, and shall enter in the register the following particulars, namely: — (a) The fact of the issue of the warrant; (b) A statement of the shares included in the warrant, distinguishing each share by its number; and The date of the issue of the warrant. (2) The bearer of a share warrant shall, subject to the articles of the company, be entitled, on surrendering it for cancellation, to have his name entered as a member in the register of fnembers. (3) The company shall be responsible for any loss incurred by any person by reason of the company entering in the register the name of the bearer of a share warrant in respect of the shares therein specified without the warrant being surrendered and cancelled. (4) Until the warrant is surrendered, the particulars specified in subsection (1) of this section shall be deemed to be the particulars required by this Act to be entered in the register of members, and, on the surrender, the date of the surrender must be entered. (5) Subject to the provisions of this act, the bearer of a share warrant may, if the articles of the company so provide, be deemed to be a member of the company within the meaning of this Act, either to the full extent or for any purposes defined in the articles. Inspection of register of members. 98.—(1) The register of members, commencing from the date of the registration of the company, and the index of the names of members, shall be kept at the registered office of the company, and, except when the register is closed under the provisions of this Act, shall during business hours (subject to such reasonable restrictions as the company in general meeting may impose, so that not less than two hours in each day be allowed for inspection) be open to the inspection of any member without charge and of any other person on payment of one shilling, or such less sum as the company may prescribe, for each inspection, COMPANIES ACT, 1929 615 (2) Any member or other person may require a copy of the register, or of any part thereof, on payment of sixpence, or such less sum as the company may prescribe, for every hundred words or fractional part thereof required to be copied. The company shall cause any copy so required by any person to be sent to that person within a period of ten days commencing on the day next after the day on which the requirement is received by the company. (3) If any inspection required under this section is refused or if any copy required under this section is not sent within the proper period, the company and every officer of the company who is in default shall be liable in respect of each offence to a fine not exceeding two pounds, and further to a default fine of two pounds. 4) In the case of any such refusal or default, the court may by order compel an immediate inspection of the register and index or direct that the copies required shall be sent to the persons requiring them. 99. A company may, on giving notice by advertisement in some newspaper circulating in the district in which the registered office of the company is situate, close the register of members for any time or times not exceeding in the whole thirty days in each vear. 100.—(1) If— (a) the name of any person is, without sufficient cause, entered in or omitted from the register of members of a company; or default is made or unnecessary delay takes place in entering on the register the fact of any person having ceased to be a member; the person aggrieved, or any member of the company, or the company, may apply to the court for rectification of the register. (2) Where an application is made under this section, the court may either refuse the application or may order rectification of the register and payment by the company of any damages sustained by any party aggrieved. (3) On an application under this section the court may decide any question relating to the title of any person who is a party to the application to have his name entered in or omitted from the register, whether the question arises between members or alleged members, or between members or alleged members on the one hand and the company on the other hand, and generally may decide any question necessary or expedient to be decided for rectification of the register. (4) In the case of a company required by this Act to send a list of its members to the registrar of companies, the court, when making an order for rectification of the register, shall by its order direct notice of the rectification to be given to the registrar. 'b) 101. No notice of any trust, expressed, implied, or constructive, shall be entered on the register, or be receivable by the registrar, in the case of companies registered in England. Power to close register. Power of court 0 rectify register. Trusts not to be :ntered on register in England. SECRETARIAL PRACTICE Register to be 102. The register of members shall be prima facie evidence of any svidence. matters by this Act directed or authorised to be inserted therein. Power for company to keep dominion register, Regulations «&. to dominion register. Dominion Register. 103.—(1) A company having a share capital whose objects comprise the transaction of business in any part of His Majesty’s dominions outside Great Britain, the Channel Islands, or the Isle of Man may cause to be kept in any such part of His Majesty's dominions in which it transacts business a branch register of members resident in that part (in this Act called a * dominion register”). (2) The company shall give to the registrar of companies notice of the situation of the office where any dominion register is kept and of any change in its situation, and if it is discontinued of its discontinuance, and any such notice shall be given within fourteen days of the opening of the office or of the change or discontinuance, as the case may be. (3) If default is made in complying with subsection (2) of this section, the company and every officer of the company who is in default shall be liable to a default fine. (4) References to a colonial register occurring in any articles registered before the commencement of this Act shall be construed as references to a dominion register. 104.—(1) A dominion register shall be deemed to be part of the company’s register of members (in this and the next following section called “the principal register”). (2) It shall be kept in the same manner in which the principal register is by this Act required to be kept except that the advertisement before closing the register shall be inserted in some newspaper circulating in the district where the dominion register is kept, and that any competent court in that part of His Majesty’s dominions where the register is kept may exercise the same jurisdiction of rectifying the register as is under this Act exerciseable by the court, and that the offences of refusing inspection or copies of a dominion register, and of authorising or permitting the refusal may be prosecuted summarily before any tribunal having summary criminal jurisdiction in that part of His Majesty’s dominions. (3) The company shall transmit to its registered office a copy of every entry in its dominion register as soon as may be after the entry is made, and shall cause to be kept at its registered office, duly entered up from time to time, a duplicate of its dominion register. Every such duplicate shall, for all the purposes of this Act, be deemed to be part of the principal register. (4) Subject to the provisions of this section with respect to the duplicate register, the shares registered in a dominion register shall be distinguished from the shares registered in the principal register, and no transaction with respect to any shares registered in a dominion register shall, during the continuance of that registration, be registered in any other register. COMPANIES ACT, 1929 617 (5) A company may discontinue to keep a dominion register, and thereupon all entries in that register shall be transferred to some other dominion register kept by the company in the same part of His Majesty's dominions, or to the principal register. (6) Subject to the provisions of this Act, any company may, by its articles, make such provisions as it may think fit respecting the keeping of dominion registers. \7) If default is made in complying with subsection (3) of this section, the company and every officer of the company who is i» lefault shall be liable to a default fine. 105. An instrument of transfer of a share registered in a dominion register, other than such a register kept in Northern Ireland, shall be deemed to be a transfer of property situate out of the United Kingdom, and, unless executed in any part of the United Kingdom, shall be exempt from stamp duty chargeable in Great Britain. 106.—(1) The Foreign Jurisdiction Act, 1890, shall have effect as if the last three foregoing sections of this Act were included among the enactments which by virtue of section five of that Act may be applied by Order in Council to foreign countries in which for the time seing His Majesty has jurisdiction. (2) His Majesty may by Order in Council direct that the said sections, including any enactments for the time being in force amending or substituted for those sections, shall extend, with or without any exceptions, adaptations or modifications specified in the Order, to any territories under His Majesty’s protection to which those sections cannot be extended under the Foreign Jurisdiction Act, 1890, as amended by subsection (1) of this section. His Majesty may by Order in Council revoke or vary any Order made under this subsection. 107.—(1) If by virtue of the law in force in any part of His Majesty’s dominions outside Great Britain companies incorporated ander that law have power to keep in Great Britain branch registers of their members resident in Great Britain, His Majesty may by Order in Council direct that sections ninety-eight and one hundred of this Act shall, subject to any modifications and adaptations specified in the Order, apply to and in relation to any such branch registers kept in Great Britain as they apply to and in relation to the registers of companies within the meaning of this Act. {2) For the purposes of this section, the expression ‘‘His Majesty's dominions” includes any territory which is under His Majesty’s protection or in respect of which a mandate under the League of Nations has been accepted by His Majesty. Stamp duties in :ase of shares registered in lominion registers. Power to extend provisions as to dominion registers to other countries, 53 & 54 Vict. 3.17 Provisions as to sranch registers »f dominion companies kept n the United Kingdom. Annual Return. 108.—(1) Every company having a share capital shall once at Annual return least in every year make a return containing a list of all persons who, di do on the fourteenth dav after the first or only ordinary general meeting a share cabital. 618 SECRETARIAL PRACTICE in the year, are members of the company, and of all persons who have ceased to be members since the date of the last return or, in the case of the first return, of the incorporation of the company. (2) The list must state the names, addresses, and occupations of all the past and present members therein mentioned, and the number of shares held by each of the existing members at the date of the return, specifying shares transferred since the date of the last return or, in the case of the first return, of the incorporation of the company by persons who are still members and have ceased to be members respectively and the dates of registration of the transfers; and, if the names therein are not arranged in alphabetical order, must have annexed to it an index sufficient to enable the name of any person in the list to be readily found: Provided that, where the company has converted any of its shares into stock and given notice of the conversion to the registrar of companies, the list must state the amount of stock held by éach of the existing members instead of the amount of shares and the particulars relating to shares hereinbefore required. (3) The return must also state the address of the registered office of the company and must contain a summary distinguishing between shares issued for cash and shares issued as fully or partly paid up otherwise than in cash, and specifying the following particulars :— (a) The amount of the share capital of the company, and the number of the shares into which it is divided; The number of shares taken from the commencement of the company up to the date of the return; The amount called up on each share; The total amount of calls received; The total amount of calls unpaid: The total amount of the sums, if any, paid by way of commission in respect of any shares or debentures; Particulars of the discount allowed on the issue of any shares issued at a discount, or of so much of that discount as has not been written off at the date on which the return is made; The total amount of the sums, if any, allowed by way of discount in respect of any debentures, since the date of the last return; {(f) The total number of shares forfeited ; (#) The total amount of shares for which share warrants are outstanding at the date of the return; The total amount of share warrants issued and surrendered respectively since the date of the last return; {m) The number of shares comprised in each share warrant; (n) All such particulars with respect to the persons who at the date of the return are the directors of the company as are by this Act required to be contained wlth respect to directors in the register of the directors of a company; COMPANIES ACT, 1920 61q The total amount of the indebtedness of the company in respect of all mortgages and charges which are required (or, in the case of a company registered in Scotland, which, if the company had been registered in England, would be required) to be registered with the registrar of companies under this Act, or which would have been required so to be registered if created after the first day of July, nineteen aundred and eight. {4) The return shall be in accordance with the form set out in the Sixth Schedule to this Act, or as near thereto as circumstances admit. (5) In the case of a company keeping a dominion register, the particulars of the entries in that register shall, so far as they relate to matters which are required to be stated in the return, be included in the return made next after copies of those entries are received at the registered office of the company. 109.—(1) Every company not having a share capital shall once at least in every calendar year make a return stating— {a) the address of the registered office of the company; {b) all such particulars with respect to the persons who at the date of the return are the directors of the company as are by this Act required to be contained with respect to directors in the register of directors of a company. (2) There shall be annexed to the return a statement containing particulars of the total amonnt of the indebtedness of the company in respect of all mortgages and charges which are required (or, in the case of a company registered in Scotland, which, if the company had been registered in England, would be required) to be registered with the registrar of companies under this Act, or which would have been required so to be registered if created after the first day of July. nineteen hundred and eight. 110.—(1) The annual return must be contained in a separate part of the register of members, and must be completed within twenty-eight days after the first or only general meeting in the year, and the company must forthwith forward to the registrar of companies a copy signed by a director or by the manager or by the secretary of the company. (2) Section ninety-eight of this Act shall apply to the annual return as it applies to the register of members. (3) Except where the company is a private company, or is an assurance company which has complied with the provisions of subsection (4) of section seven of the Assurance Companies Act, 1909, the annual return shall include a written copy, certified by a director or the manager or secretary of the company to be a true copy, of the last balance sheet which has been audited by the company’s auditors, including every document required by law to be annexed thereto, together with a copy of the report of the auditors thereon certified as Annual return to be made by company not having share capital. General provisions as to annual returns. 7 Edw. 7. c. 49 520 SECRETARIAL PRACTICE aforesaid, and if any such balance sheet is in a foreign language there shall also be annexed to it a translation thereof in English, certified in the prescribed manner to be a correct translation : Provided that, if the said last balance sheet did not comply with the requirements of the law as in force at the date of the audit with respect to the form of balance sheets there shall be made such additions to and corrections in the said copy as would have been required to be made in the said balance sheet in order to make it comply with the said requirements, and the fact that the said copy has been so amended shall be stated thereon. (4) If a company fails to comply with this section or either of the two last foregoing sections of this Act, the company and every officer of the company who is in default shall be liable to a default Aine. (5) For the purposes of subsection (4) of this section, the expression “officer,” and for the purposes of the last two foregoing sections of this Act the expression ‘‘director,”” shall include any person in accordance with whose directions or instructions the directors of the company are accustomed to act. Certificates to be 111. A private company shall send with the annual return required sent by private by section one hundred and eight of this Act a certificate signed by a company mith director or the secretary of the company that the company has not, since the date of the last return, or, in the case of a first return, since the date of the incorporation of the company, issued any invitation to the public to subscribe for any shares or debentures of the company, and, where the annual return discloses the fact that the number of members of the company exceeds fifty, also a certificate so signed that the excess consists wholly of persons who under paragraph (b) of subsection (1) of section twenty-six of this Act, are not to be included in reckoning the number of fifty. Annual general meeting. Meetings and Proceedings. 112.—(1) A general meeting of every company shall be held once at the least in every calendar year, and not more than fifteen months after the holding of the last preceding general meeting. (2) If default is made in holding a meeting of the company in accordance with the provisions of this section, the company, and every director or manager of the company who is knowingly a party to the default shall be liable to a fine not exceeding fifty pounds. (3) If default is made as aforesaid, the court may, on the application of any member of the company, call, or direct the calling of, a general meeting of the company. Statutory 113.—(1) Every company limited by shares and every company sng end limited by guarantee and having a share capital shall, within a period of not less than one month nor more than three months from the date at which the company is entitled to commence business, hold a general meeting of the members of the company, which shall be called ‘the statutory meeting.”’ COMPANIES ACT, 1929 621 (2) The directors shall, at least seven days before the day on which the meeting is held, forward a report (in this Act referred to as “the statutory report’) to every member of the company. (3) The statutory report shall be certified by not less than two directors of the company, or where there are less than two directors, by the sole director and manager, and shall state— (a) the total number of shares allotted, distinguishing shares allotted as fully or partly paid up otherwise than in cash, and stating in the case of shares partly paid up the extent to which they are so paid up, and in either case the consideration for which they have been allotted; the total amount of cash received by the company in respect of all the shares allotted, distinguished as aforesaid; an abstract of the receipts of the company and of the payments made thereout, up to a date within seven days of the late of the report, exhibiting under distinctive headings the receipts of the company from shares and debentures and other sources, the payments made thereout, and particulars concerning the balance remaining in hand, and an account or estimate of the preliminary expenses of the company; the names, addresses, and descriptions of the directors, auditors, if any, managers, if any, and secretary of the company; and the particulars of any contract, the modification of which is to be submitted to the meeting for its approval, together with the particulars of the modification or proposed modification. c) 4) The statutory report shall, so far as it relates to the shares allotted by the company, and to the cash received in respect of such shares, and to the receipts and payments of the company on capital account, be certified as correct by the auditors, if any, of the comnany. (5) The directors shall cause a copy of the statutory report, certified as required by this section, to be delivered to the registrar of companies for registration forthwith after the sending thereof to the members of the company. (6) The directors shall cause a list showing the names, descriptions, and addresses of the members of the company, and the number of shares held by them respectively, to be produced at the commencement of the meeting, and to remain open and accessible to any member of the company during the continuance of the meeting. (7) The members of the company present at the meeting shall be at liberty to discuss any matter relating to the formation of the company, or arising out of the statutory report, whether previous notice has been given or not, but no resolution of which notice has not been given in accordance with the articles may be passed. 500 SECRETARIAL PRACTICE (8) The meeting may adjourn from time to time, and at any adjourned meeting any resolution of which notice has been given-in accordance with the articles, either before or subsequently to the former meeting, may be passed, and the adjourned meeting shall have the same powers as an original meeting. (9) In the event of any default in complying with the provisions of this section every director of the company who is guilty of or who knowingly and wilfully authorises or permits the default shall be lable to a fine not exceeding fifty pounds. (10) This section shall not apply to a private company. 114.—(1) The directors of a company, notwithstanding anything in its articles, shall, on the requisition of members of the company aolding at the date of the deposit of the requisition not less than onetenth of such of the paid-up capital of the company as at the date of the deposit carries the right of voting at general meetings of the company, or, in the case of a company not having a share capital, members of the company representing not less than one-tenth of the total voting rights of all the members having at the said date a right to vote at general meetings of the company, forthwith proceed duly to convene an extraordinary general meeting of the company. (2) The requisition must state the objects of the meeting, and must be signed by the requisitionists and deposited at the registered office of the company, and may consist of several documents in like form, each signed by one or more requisitionists. (3) If the directors do not within twenty-one day from the date of the deposit of the requisition proceed duly to convene a meeting, the requisitionists, or any of them representing more than one-half of the total voting rights of all of them, may themselves convene a meeting, but any meeting so convened shall not be held after the expiration of three months from the said date. (4) A meeting convened under this section by the requisitionists shall be convened in the same manner, as nearly as possible, as that in which meetings are to be convened by directors. (5) Any reasonable expenses incurred by the requisitionists by reason of the failure of the directors duly to convene a meeting shall be repaid to the requisitionists by the company, and any sum so repaid shall be retained by the .company out of any sums due or to become due from the company by way of fees or other remuneration in respect of their services to such of the directors as were in default. (6) For the purposes of this section, the directors shall, in the case of a meeting at which a resolution is to be proposed as a special resolution, be deemed not to have duly convened the meeting if they do not give such notice thereof as is required by section one hundred and seventeen of this Act. Provisions as to ~~ 115.—(1) The following provisions shall have effect in so far as meetings and the articles of the company do not make other provision in that votes. behalf — COMPANIES ACT, 1929 623 (@) a meeting of a company, other than a meeting for the passing of a special resolution, may be called by seven days’ notice in writing; notice of the meeting of a company shall be served on every member of the company in the manner in which notices are required to be served by Table A, and for the purpose of this paragraph the expression ‘Table A’ means that Table as for the time being in force; two or more members holding not less than one-tenth of the issued share capital or, if the company has not a share capital, not less than five per cent. in number of the members of the company may call a meeting; in the case of a private company two members, and in the case of any other company three members, personally present shall be a quorum; any member elected by the members present at a meeting may be chairman thereof; in the case of a company originally having a share capital, every member shall have one vote in respect of each share or each ten pounds of stock held by him, and in any other case every member shall have one vote. 'd) e) f) 2) If for any reason it is impracticable to call a meeting of a company in any manner in which meetings of that company may be called, or to conduct the meeting of the company in manner prescribed by the articles or this Act, the court may, either of its own motion or on the application of any director of the company or of any member of the company who would be entitled to vote at the meeting, order a meeting of the company to be called, held and conducted in such manner as the court thinks fit, and where any such order is made may give such ancillary or consequential directions as it thinks expedient, and any meeting called, held and conducted in accordance with any such order shall for all purposes be deemed to be a meeting of the company duly called, held and conducted. 116.—(1) A corporation, whether a company within the meaning Representation of this Act or not, may— ans ot (a) if it is a member of another corporation, being a company OLper Sompmies within the meaning of this Act, by resolution of its directors or other governing body authorise such person as it thinks fit to act as its representative at any meeting of the company or at any meeting of any class of members of the company; if it is a creditor (including a holder of debentures) of another corporation, being a company within the meaning of this Act, by resolution of its directors or other governing body authorise such person as it thinks fit to act as its representative at any meeting of any creditors of the company held in pursuance of this Act or of any rules made thereunder, or in pursuance of the provisions contained in any debenture or trust deed, as the case may be. 624 SECRETARIAL PRACTICE (2) A person authorised as aforesaid shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual shareholder, creditor, or holder of debentures, of that other company. Provisions as to extraordinary and special resolutions. 117.—(1) A resolution shall be an extraordinary resolutio.. when it has been passed by a majority of not less than three-fourths of such members as, being entitled so to do, vote in person or, where proxies are allowed, by proxy, at a general meeting of which notice specifying the intention to propose the resolution as an extraordinary resolution has been duly given. (2) A resolution shall be a special resolution when it has been passed by such a majority as is required for the passing of an extraordinary resolution and at a general meeting of which not less than twenty-one days’ notice, specifying the intention to propose the resolution as a special resolution, has been duly given: . Provided that, if all the members entitled to attend and vote at any such meeting so agree, a resolution may be proposed and passed as a special resolution at a meeting of which less than twentyone days’ notice has been given. (3) At any meeting at which an extraordinary resolution or a special resolution is submitted to be passed, a declaration of the chairman that the resolution is carried shall, unless a poll is demanded, be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution. (4) At any meeting at which an extraordinary resolution or a special resolution is submitted to be passed a poll shall be taken to be effectively demanded, if demanded— (a) by such number of members for the time being entitled under the articles to vote at the meeting as may be specified in the articles, so, however, that it shall not in any case be necessary for more than five members to make the demand; or if no provision is made by the articles with respect to the right to demand the poll, by three members so entitled or by one member or two members so entitled, if that member holds or those two members together hold not less than fifteen per cent. of the paid-up share capital of the company. (5) When a poll is demanded in accordance with this section, in computing the majority on the poll reference shall be had to the number of votes to which each member is entitled by virtue of this Act, or of the articles of the company. (6) For the purposes of this section, notice of a meeting shall be deemed to be duly given and the meeting to be duly held when the notice is given and the meeting held in manner provided by this Act or the articles. COMPANIES ACT, 1929 hos 118.—(1) A printed copy of every resolution or agreement to which this section applies shall, within fifteen days after the passing or making thereof, be forwarded to the registrar of companies and recorded by him. (2) Where articles have been registered, a copy of every such resolution or agreement for the time being in force shall be embodied In or annexed to every copy of the articles issued after the passing of the resolution or the making of the agreement. 13) Where articles have not been registered, a printed copy of every such resolution or agreement shall be forwarded to any member at his request, on payment of one shilling or such less sum as the company may direct. (4) This section shall apply to— ia) Special resolutions; (() Extraordinary resolutions; ‘c’ Resolutions which have been agreed to by all the members of a company, but which, if not so agreed to, would not have been effective for their purpose unless, as the case may be, they had been passed as special resolutions or as extraordinary resolutions; Resolutions or agreements which have been agreed to by all the members of some class of shareholders, but which, if not so agreed to, would not have been effective for their purpose unless they had been passed by some particular majority or otherwise in some particular manner, and all resolutions or agreements which effectively bind all the members of any class of shareholders though not agreed to by all those members; Resolutions requiring a company to be wound up voluntarily, passed under paragraph (a) of subsection (1) of section two hundred and twenty-five of this Act. Registration and copies of certain resolutions and Agreements. (5) If a company fails to comply with subsection (1) of this section, the company and every officer of the company who is in default shall be liable to a default fine of two pounds. (6) If a company fails to comply with subsection (2) or subsection (3) of this section, the company and every officer of the company who is in default shall be liable to a fine not exceeding one pound for each copy in respect of which default is made. {7) For the purposes of the last two foregoing subsections, a liquidator of the company shall be deemed to be an officer of t- - company. 119. Where after the commencement passed at an adjourned meeting of I {ils (@) a company; (b; the holders of any class of shares in ‘ce the directors of a companv: “et a resolutirw company S Resolutions passed at adjourned meetings. 526 SECRETARIAL PRACTICE the resolution shall for all purposes be treated as having been passed on the date on which it was in fact passed, and shall not be deemed to have been passed on any earlier date. Minutes of 120.—(1) Every company shall cause minutes of all proceedings proceedings of 7 . ) meetings and Of general meetings, and where there are directors or managers, of directors. all proceedings at meetings of its directors or of its managers, to be entered in books kept for that purpose. (2) Any such minute if purporting to be signed by the chairman of the meeting at which the proceedings were had, or by the chairman of the next succeeding meeting, shall be evidence of the proceedings. (3) Where minutes have been made in accordance with the provisions of this section of the proceedings at any general meeting of the company or meeting of directors or managers, then, until the contrary is proved, the meeting shall be deemed to have been duly held and convened, and all proceedings had thereat to have been duly had, and all appointments of directors, managers, or liquidators, shall be deemed to be valid. Inspection of minute books. 121.—(1) The books containing the minutes of proceedings of any general meeting of a company held after the commencement of this Act shall be kept at the registered office of the company, and shall during business hours (subject to such reasonable restrictions as the company may by its articles or in general meeting impose, so that no less than two hours in each day be allowed for inspection) be open to the inspection of any member without charge. (2) Any member shall be entitled to be furnished within seven days after he has made a request in that behalf to the company with a copy of any such minutes as aforesaid at a charge not exceeding sixpence for every hundred words. (3) If any inspection required under this section is refused or if any copy required under this section is not sent within the proper time, the company and every officer of the company who is in default shall be liable in respect of each offence to a fine not exceeding two pounds and further to a default fine of two pounds. (4) In the case of any such refusal or default, the court may by order compel an immediate inspection of the books in respect of all proceedings of general meetings or direct that the copies required shall be sent to the persons requiring them. Accounts and Audit. Keepingofbooks ~~ 122,—(1) Every company shall cause to be kept proper books of oF aon, account with respect to— {a) all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place; (b) all sales and purchases of goods by the company; (c) the assets and liabilities of the company. COMPANIES ACT, 1929 627 (2) The books of account shall be kept at the registered office of the company or at such other place as the directors think fit, and shall at all times be open to inspection by the directors. (3) If any person being a director of a company fails to take all reasonable steps to secure compliance by the company with the requirements of this section, or has by his own wilful act been the cause of any default by the company thereunder, he shall, in respect of each offence, be liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding two hundred pounds: Provided that a person shall not be sentenced to imprisonment for an offence under this section unless, in the opinion of the court dealing with the case, the offence was committed wilfully. 123.—(1) The directors of every company shall at some date not later than eighteen months after the incorporation of the company and subsequently once at least in every calendar year lay before the company in general meeting a profit and loss account or, in the case of a company not trading for profit, an income and expenditure account for the period, in the case of the first account, since the incorporation of the company, and, in any other case, since the preceding account, made up to a date not earlier than the date of the meeting by more than nine months, or, in the case of a company carrying on business or having interests abroad, by more than twelve months: Provided that the Board of Trade, if for any special reason they think fit so to do, may, in the case of any company, extend the period of eighteen months aforesaid, and in the case of any company and with respect to any year extend the periods of nine and twelve months aforesaid. ’rofit and loss iccount and >alance sheet. (2) The directors shall cause to be made out in every calendar year, and to be laid before the company in general meeting, a balance sheet as at the date to which the profit and loss account, or the income and expenditure account, as the case may be, is made up, and there shall be attached to every such balance sheet a report by the directors with respect to the state of the company’s affairs, the amount, if any, which they recommend should be paid by way of dividend, and the amount, if any, which they propose to carry to the reserve fund, general reserve or reserve account shown speciically on the balance sheet, or to a reserve fund, general reserve or reserve account to be shown specifically on a subsequent balance sheet {3) If any person being a director of a company fails to take all reasonable steps to comply with the provisions of this section, he shall, in respect of each offence, be liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding two hundred pounds: Provided that a person shall not be sentenced to imprisonment for an offence under this section unless in the opinion of the court dealing with the case, the offence was committed wilfr} 628 SECRETARIAL PRACTICE Soprents of 124 —(1) Every balance sheet of a company shall contain a alance sheet. summary of the authorised share capital and of the issued share capital of the company, its liabilities and its assets, together with such particulars as are necessary to disclose the general nature of the liabilities and the assets of the company and to distinguish between the amounts respectively of the fixed assets and of the floating assets, and shall state how the values of the fixed assets have been arrived at. (2) There shall be stated under separate headings in the balance sheet, so far as they are not written off— (a) the preliminary expenses of the company; and (b) any expenses incurred in connection with any issue of share capital or debentures; and if it is shown as a separate item in or is otherwise ascertainable from the books of the company, or from any contract for the sale or purchase of any property to be acquired by the company, or from any documents in the possession of the company relating to the stamp duty payable in respect of any such contract or the conveyance of any such property, the amount of the goodwill and of any patents and trademarks as so shown or ascertained. 2) (3) Where any liability of the company is secured otherwise than by operation of law on any assets of the company, the balance sheet shall include a statement that that liability is so secured, but it shall not be necessary to specify in the balance sheet the assets on which the liability is secured. (4) The provisions of this section are in addition to other provisions of this Act requiring other matters to be stated in balance sheets. Assets consisting 125. Where any of the assets of a company consist of shares in, of shares in sub- : . sidiary com- or amounts owing (whether on account of a loan or otherwise) panies to be set from a subsidiary company or subsidiary companies, the aggregate out separately amount of those assets, distinguishing shares and indebtedness, shall be set out in the balance sheet of the first-mentioned company separately from all its other assets, and where a company is indebted, whether on account of a loan or otherwise, to a subsidiary company or subsidiary companies, the aggregate amount of that indebtedness shall be set out in the balance sheet of that company separately from 211 its other liabilities. Beane sheet to 126.—(1) Where a company (in this section referred to as “the ears oat holding company ”’) holds shares either directly or through a nominee subsidiary in a subsidiary company or in two or more subsidiary companies, Opes there shall be annexed to the balance sheet of the holding company a statement, signed by the persons by whom in pursuance of section one hundred and twenty-nine of this Act the balance sheet is signed, stating how the profits and losses of the subsidiary company, or, where there are two or more subsidiary companies, the aggregate profits COMPANIES ACT, 1929 629 and losses of those companies, have, so far as they concern the aolding company, been dealt with in, or for the purposes of, the accounts of the holding company, and in particular how, and to what extent— provision has been made for the losses of a subsidiary company either in the accounts of that company or of the holding company, or of both; and losses of a subsidiary company have been taken into account by the directors of the holding company in arriving at the profits and losses of the holding company as disclosed ln its accounts: Provided that it shall not be necessary to specify in any such statement the actual amount of the profits or losses of any subsidiary company, or the actual amount of any part of any such profits or losses which has been dealt with in any particular manner. (2) If in the case of a subsidiary company the auditors’ report on the balance sheet of the company does not state without qualification that the auditors have obtained all the information and explanations they have required and that the balance sheet is properly drawn up so as to exhibit a true and correct view of the state of the company's affairs according to the best of their information and the explanations given to them and as shown by the books of the company, the statement which is to be annexed as aforesaid to the balance sheet of the holding company shall contain particulars of the manner in which the report is qualified. (3) For the purposes of this section, the profits or losses of a subsidiary company mean the profits or losses shown in any accounts of the subsidiary company made up to a date within the period to which the accounts of the holding company relate, or, if there are no such accounts of the subsidiary company available at the time when the accounts of the holding company are made up, the profits or losses shown in the last previous accounts of the subsidiary company which became available within that period. (4) If for any reason the directors of the holding company are unable to obtain such information as is necessary for the preparation of the statement aforesaid, the directors who sign the balance sheet shall so report in writing and their report shall be annexed to the balance sheet in lieu of the statement. 127.—(1) Where the assets of a company consist in whole or in Meaning of part of shares in another company, whether held directly or through Any a nominee and whether that other company is a company within the meaning of this Act or not, and— the amount of the shares so held is at the time when the accounts of the holding company are made up more than fifty per cent. of the issued share capital of that other company or such as to entitle the company to more than fifty per cent. of the voting power in that other company: 630 SECRETARIAL PRACTICE the company has power (not being power vested in it by virtue only of the provisions of a debenture trust deed or by virtue of sharesissued to it for the purpose in pursuance of those provisions) directly or indirectly to appoint the majority of the directors of that other company, that other company shall be deemed to be a subsidiary company within the meaning of this Act, and the expression ‘subsidiary company” in this Act means a company in the case of which the conditions of this section are satisfied. (2) Where a company the ordinary business of which includes the lending of money holds shares in another company as security only, no account shall for the purpose of determining under this section whether that other company is a subsidiary company be taken of the shares so held. Ageoninty bo gt 128.—(1) The accounts which in pursuance of this Act are to be as to loans to, laid before every company in general meeting shall, subject to the and remunera- provisions of this section, contain particulars showing— tion of, directors, fee. (a) the amount of any loans which during the period to which the accounts relate have been made either by the company or by any other person under a guarantee from or on a security provided by the company to any director or officer of the company, including any such loans which were repaid during the said period; and the amount of any loans made in manner aforesaid to any director or officer at any time before the period aforesaid and outstanding at the expiration thereof; and the total of the amount paid to the directors as remuneration for their services, inclusive of all fees, percentages, or other emoluments, paid to or receivable by them by or from the company or by or from any subsidiary company. The provisions of subsection (1) of this section with respect to loans shall not apply— in the case of a company the ordinary business of which includes the lending of money, to a loan made by the company in the ordinary course of its business; or to a loan made by the company to any employee of the company if the loan does not exceed two thousand pounds and is certified by the directors of the company to have been made in accordance with any practice adopted or about to be adopted by the company with respect to loans to its employees. (3) The provisions of subsection (1) of this section with respect to the remuneration paid to directors shall not apply in relation to a managing director of the company, and in the case of any other director who holds any salaried employment or office in the company there shall not be required to be included in the said total amount any sums paid to him except sums paid by way of directors’ fees. (c) COMPANIES ACT, 1929 631 (4) If in the case of any such accounts as aforesaid the requirements of this section are not complied with, it shall be the duty >f the auditors of the company by whom the accounts are examined to include in their report on the balance sheet of the company, so far as they are reasonably able to do so, a statement giving the required particulars. (5) In this section the expression ‘emoluments’ includes fees, percentages and other payments made or consideration given, directly or indirectly, to a director as such, and the money value of any allowances or perquisites belonging to his office. 129.—(1) Every balance sheet of a company shall be signed on Signing of behalf of the board by two of the directors of the company, or, if balance sheet. there is only one director, by that director, and the auditors’ report shall be attached to the balance sheet, and the report shall be read before the company in general meeting, and shall be open to inspection by any member. (2) In the case of a banking company registered after the qfteenth day of August, eighteen hundred and seventy-nine, the balance sheet must be signed by the secretary or manager, if any, and where there are more than three directors of the company by at least three of those directors, and where there are not more than three directors by all the directors. (3) If any copy of a balance sheet which has not been signed as required by this section is issued, circulated, or published, or if any copy of a balance sheet is issued, circulated, or published without having a copy of the auditors’ report attached thereto, the company, and every director, manager, secretary, or other officer of the company who is knowingly a party to the default, shall on conviction be liable to a fine not exceeding fifty pounds. 130.—(1) In the case of a company not being a private company— fa) a copy of every balance sheet, including every document required by law to be annexed thereto, which is to be laid before the company in general meeting, together with a copy of the auditors’ report, shall, not less than seven Jays before the date of the meeting, be sent to all persons entitled to receive notices of general meetings of the company, any member of the company, whether he is or is not entitled to have sent to him copies of the company’s balance sheets, and any holder of debentures of the company, shall be entitled to be furnished on demand without charge with a copy of the last balance sheet of the company, including every document required by law to be annexed thereto, together with a copy of the auditors’ report on the balance sheet. If default is made in complying with paragraph (a) of this subsection, the company and every officer of the company who is in default shall be liable to a fine not exceeding twenty pounds, and if, Right to receive copies of balance sheets and auditors’ report. h32 SECRETARIAL PRACTICE where any person makes a demand for a document with which he is by virtue of paragraph (b) of this subsection entitled to be furnished, default is made in complying with the demand within seven days after the making thereof, the company and every director, manager, secretary or other officer of the company who is knowingly a party to the default shall be liable to a fine not exceeding five pounds for every day during which the default continues, unless it is proved that that person has already made a demand for and been furnished with a copy of the document. (2) In the case of a company being a private company, any member shall be entitled to be furnished, within seven days after he has made a request in that behalf to the company, with a copy of the balance sheet and auditors’ report at a charge not exceeding sixpence for every hundred words. If default is made in furnishing such a copy to any member who demands it and tenders to the company the amount of the proper charge therefor, the company and every officer of the company who is in default shall be liable to a default fine. Banking and 131.—(1) Every company, being a limited banking company or companics to an insurance company or a deposit, provident, or benefit society, publish periodi- shall, before it commences business, and also on the first Monday in cal statement. pebruary and the. first Tuesday in August in every year during which it carries on business, make a statement in the form set out in the Seventh Schedule to this Act, or as near thereto as circumstances admit. (2) A copy of the statement shall be put up in a conspicuous place in the registered office of the company, and in every branch office or place where the business of the company is carried on. (3) Every member and every creditor of the company shall be entitled to a copy of the statement, on payment of a sum not exceeding sixpence. 9 Edw. 7, c. 49. (4) If default is made in complying with this section, the company and every director and manager of the company who knowingly and wilfully authorises or permits the default shall be liable to a fine not exceeding five pounds for every day during which the default continues. (5) For the purposes of this Act a company which carries on the business of insurance in common with any other business or businesses shall be deemed to be an insurance company. (6) This section shall not apply to any assurance company to which the provisions of the Assurance Companies Act, 1909, as to the accounts and balance sheet to be prepared annually and deposited by such a company apply, if the company complies with those provisions. Appointment 132.—(1) Every company shall at each annual general meeting ion of auditers, appoint an auditor or auditors to hold office until the next annual general meeting, COMPANIES ACT, 1929 633 (2) If an appointment of auditors is not made at an annual general meeting, the Board of Trade may, on the application of any member of the company, appoint an auditor of the company for the current year. (3) A person, other than a retiring auditor, shall not be capable of being appointed auditor at an annual general meeting unless notice of an intention to nominate that person to the office of auditor has been given by a member to the company not less than fourteen days before the annual general meeting, and the company shall send a copy of any such notice to the retiring auditor, and shall give notice thereof to the members, either by advertisement or in any other mode allowed by the articles, not less than seven days vefore the annual general meeting: Provided that if, after notice of the intention to nominate an auditor has been so given, an annual general meeting is called for a date fourteen days or less after the notice has been given, the notice, though not given within the time required by this subsection, shall be deemed to have been properly given for the purposes thereof, and the notice to be sent or given by the company may, instead of being sent or given within the time required by this subsection, be sent or given at the same time as the notice of the annual general meeting. (4) Subject as hereinafter provided, the first auditors of the company may be appointed by the directors at any time before the first annual general meeting, and auditors so appointed shall hold office until that meeting: Provided that— (a) the company may at a general meeting of which notice has been served on the auditors in the same manner as on members of the company remove any such auditors and appoint in their place any other persons being persons who have been nominated for appointment by any member of the company and of whose nomination notice has been given to the members of the company not less than seven days before the date of the meeting; and if the directors fail to exercise their powers under this subsection, the company in general meeting may appoint the first auditors, and thereupon the said powers of the directors shall cease. b) (5) The directors may fill any casual vacancy in the office of auditor, but while any such vacancy continues the surviving or continuing auditor or auditors, if any, may act. (6) The remuner: tion of the auditors of a company shall be fixed by the company in general meeting, except that the remunerasion of an auditor appointed before the first annual general meeting, or of an auditor appointed to fill a casual vacancy, may be fixed by the directors, and that the remuneration of an auditor appointed by the Board of Trade mav be fixed by the Board. 634 SECRETARIAL PRACTICE Disqualification ~~ 133,—(1) None of the following persons shall be qualified for for appointment 5 hointment as auditor of a company— (a) a director or officer of the company; (b) except where the company is a private company, a person who is a partner of or in the employment of an officer of the company; (¢) a body corporate. (2) Nothing in this section shall disqualify a body corporate from acting as auditor of a company if acting under an appointment made before the third day of August, nineteen hundred and twentyeight, but subject as aforesaid any body corporate which acts as auditor of a company shall be liable to a fine not exceeding one hundred pounds. (3) In the application of this section to Scotland the expression “body corporate” does not include a firm. Auditors’ report 134,—(1) The auditors shall make a report to the members on A to the accounts examined by them, and on every balance sheet laid books and right before the company in general meeting during their tenure of office, fo attend general and the report shall state— (a) whether or not they have obtained all the information and explanations they have required; and whether, in their opinion, the balance sheet referred to in the report is properly drawn up so as to exhibit a true and correct view of the state of the company’s affairs according to the best of their information and the explanations given to them, and as shown by the books of the company. (2) Every auditor of a company shall have a right of access at all times to the books and accounts and vouchers of the company, and shall be entitled to require from the directors and officers of the company such information and explanation as may be necessary for the performance of the duties of the auditors: "Provided that, in the case of a banking company which was registered after the fifteenth day of August, eighteen hundred and seventy-nine, and which has branch banks beyond the limits of Europe, it shall be sufficient if the auditor is allowed access to such copies and extracts from such books and accounts of any such branch as have been transmitted to the head office of the company in Great Britain. (3) The auditors of a company shall be entitled to attend any general meeting of the company at which any accounts: which have been examined or reported on by them are to be laid before the company and to make any statement or explanation they desire with respect to the accounts. COMPANIES ACT, 1928 ~ Ie va 7 at Inspection. 135.—(1) The Board of Trade may appoint one or more competent inspectors to investigate the affairs of a company and to report thereon in such manner as the Board direct— In the case of a banking company having a share capital, on the application of members holding not less than onethird of the shares issued: In the case of any other company having a share capital, on the application of members holding not less than onetenth of the shares issued: In the case of a company not having a share capital, on the application of not less than one-fifth in number of the persons on the company’s register of members. (2) The application shall be supported by such evidence as the Board of Trade may require for the purpose of showing that the applicants have good reason for, and are not actuated by malicious motives in, requiring the investigation, and the Board may, before appointing an inspector, require the applicants to give security, to an amount not exceeding one hundred pounds, for payment of the costs of the inquiry. (3) Itshall be the duty of all officers and agents of the company to produce to the inspectors all books and documents in their custody Or power. 4) An inspector may examine on oath the officers and agents of the company in relation to its business. and may administer an oath accordingly. (5) If any officer or agent of the company refuses to produce to the inspectors any book or document which it is his duty under this section so to produce, or refuses to answer any question which is put to him by the inspectors with respect to the affairs of the company, the inspectors may certify the refusal under their hand to the court, and the court may thereupon enquire into the case, and after hearing any witnesses who may be produced against or on behalf of the alleged offender and after hearing any statement which may be offered in defence, punish the offender in like manner as if he had been guilty of contempt of the court. (6) On the conclusion of the investigation the inspectors shall report their opinion to the Board of Trade, and a copy of the report shall be forwarded by the Board to the registered office of the company, and a further copy shall, at the request of the applicants for the investigation, be delivered to them. The report shall be written or printed, as the Board direct. 136.—(1) If from any report made under the last foregoing section t appears to the Board of Trade that any person has been guilty of any offence in relation to the company for which he is criminally liable the Board shall proceed as follows — [nvestigation of affairs of company by Board of Trade nspectors. Proceedings on report by inspectors. 16 & 17 Geo, 5. C. Q. 536 SECRETARIAL PRACTICE (1) in the case of an offence in England, if it appears to the Board that the case is one in which the prosecution ought to be undertaken by the Director of Public Prosecutions, the Board shall refer the matter to him; in the case of an offence in Scotland the Board shall refer the matter to the Lord Advocate. (ii) (2) If where any matter is referred to the Director of Public Prosecutions under this section he considers that the case is one in which a prosecution ought to be instituted and, further, that it is desirable in the public interest that the proceedings in the prosecution should be conducted by him, he shall institute proceedings accordingly, and it shall be the duty of all officers and agents of the company, past and present (other than the defendant in the proceedings), to give to him all assistance in connection with the prosecution which they are reasonably able to give. For the purposes of this subsection, the expression “agents” in relation to a company shall be deemed to include the bankers and solicitors of the company and any persons employed by the company as auditors, whether those persons are or are not officers of the company. (3) The expenses of and incidental to an investigation under the last preceding section of this Act (in this subsection referred to as ‘the expenses’) shall be defrayed as follows: — Where as a result of the investigation a prosecution is instituted by the Director of Public Prosecutions or by or on behalf of the Lord Advocate, the expenses shall be defrayed by the Board of Trade; In any other case the expenses shall be defrayed by the company unless the Board of Trade think proper to direct, as the Board are hereby authorised to do, that they shall either be paid by the applicants or in part by the company and in part by the applicants: Provided that— (i) if the company fails to pay the whole or any part of the sum which it is liable to pay under this subsection, the applicants shall make good the deficiency up to the amount by which the security given by them under the last preceding section exceeds the amount, if any, which they have under this subsection been directed by the Board to pay; and . (ii) any balance of the expenses not defrayed either by the company or the applicants shall be defrayed by the Board. (4) Subsection (3) of section thirteen of the Economy (Miscellaneous Provisions) Act, 1926 (which provides for the issue out of the Bankruptcy and Companies Winding-up (Fees) Account of sums towards meeting the charges estimated by the Board of Trade in respect of salaries and expenses under this Act in relation to the winding-up of companies in England) shall have effect as if COMPANIES ACT, 1929 hs expenses to be defrayed by the Board under this section were expenses incurred by the Board under this Act in relation to the winding-up of companies in England. 137.—(1) A company may by special resolution appoint inspectors to investigate its affairs. (2) Inspectors so appointed shall have the same powers and duties as inspectors appointed by the Board of Trade, except that, stead of reporting to the Board, they shall report in such manner and to such persons as the company in general meeting may direct. (3) If any officer or agent of the company refuses to produce to the inspectors any book or document which it is his duty under this section so to produce, or refuses to answer any question which Is put to him by the inspectors with respect to the affairs of the company, he shall be liable to be proceeded against in the same manner as if the inspectors had been inspectors appointed by the Board of Trade. 138. A copy of the report of any inspectors appointed under this Act, authenticated by the seal of the company whose affairs they have investigated, shall be admissible in any legal proceeding as evidence of the opinion of the inspectors in relation to any matter contained in the report. Power of company to appoint nspectors. Report of inspectors to be svidence. Directors and Managers. 139.—(1) Every company registered after the commencement of Number of this Act shall have at least two directors. directors. (2) This section shall not apply to a private company. 140.—(1) A person shall not be capable of being appointed Restrictions on director of a company by the articles, and shall not be named as a nit director or proposed director of a company in a prospectus issued of director. by or on behalf of the company, or as proposed director of an intended company in a prospectus issued in relation to that intended company, or in a statement in lieu of prospectus delivered to the registrar by or on behalf of a company, unless, before the registration of the articles or the publication of the prospectus, or the delivery of the statement in lieu of prospectus, as the case may be, he has by himself or by his agent authorised in writing— (a) signed and delivered to the registrar of companies for registration a consent in writing to act as such director: and either— (i) signed the memorandum for a number of shares aot less than his qualification, if any; or (ii) taken from the company and paid or agreed .. pay for his qualification shares, if any; or (iii) signed and delivered to the registrar for registradon an undertaking in writing to take from the company and pay for his qualification shares. if anv: or A=" SECRETARIAL PRACTICE (iv) made and delivered to the registrar for registration a statutory declaration to the effect that a number of shares, not less than his qualification, if any, are registered in his name. (2) Where a person has signed and delivered as aforesaid an undertaking to take and pay for his qualification shares, he shall, as regards those shares, be in the same position as if he had signed the memorandum for that number of shares. (3) On the application for registration of the memorandum and articles of a company the applicant shall deliver to the registrar a list of the persons who have consented to be directors of the company, and, if this list contains the name of any person who has not so consented, the applicant shall be liable to a fine not exceeding fifty pounds. (4) This section shall not apply to— (a) a company not having a share capital; or (b) a private company; or (c) a company which was a private company before becoming a public company; or (d) a prospectus issued by or on behalf of a company after the expiration of one year from the date on which the company was entitled to commence business. Qualification of director or manager. 141.—(1) Without prejudice to the restrictions imposed by the last foregoing section, it shall be the duty of every director who is by the articles of the company required to hold a specified share qualification, and who is not already qualified, to obtain his qualification within two months after his appointment, or such shorter time as may be fixed by the articles. (2) For the purpose of any provision in the articles requiring a director or manager to hold a specified share qualification, the bearer of a share warrant shall not be deemed to be the holder of the shares specified in the warrant. (3) The office of director of a company shall be vacated if the director does not within two months from the date of his appointment, or within such shorter time as may be fixed by the articles, obtain his qualification, or if after the expiration of the said period or shorter time he ceases at any time to hold his qualification. (4) A person vacating office under this section shall be incapable of being re-appointed director of the company until he has obtained his qualification. (5) If after the expiration of the said period or shorter time any unqualified person acts as a director of the company, he shall be liable to a fine not exceeding five pounds for every day between the expiration of the said period or shorter time or the day on which he ceased to be qualified, as the case may be, and the last day on which it is proved that he acted as a director. COMPANIES ACT, 1929 639 142.—(1) If any person being an undischarged bankrupt acts as director of, or directly or indirectly takes part in or is concerned in the management of, any company except with the leave of the court by which he was adjudged bankrupt, he shall be liable on conviction on indictment to imprisonment for a term not exceeding two years, or on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding five hundred pounds, or to both such imprisonment and fine: Provided that a person shall not be guilty of an offence under this section by reason that he, being an undischarged bankrupt, has acted as director of, or taken part or been concerned in the management of, a company, if he was on the third day of August, nineteen hundred and twenty-eight, acting as director of, or taking part or being concerned in the management of, that company and has continuously so acted, taken part, or been concerned since that date and the bankruptcy was prior to that date. {2) In England the leave of the court for the purposes of this section shall not be given unless notice of intention to apply therefor has been served on the official receiver and it shall be the duty of the official receiver, if he is of opinion that it is contrary to the public interest that any such application should be granted, to attend on the hearing of and oppose the granting of the application. (3) In this section the expression ‘company’ includes an unregistered company and a company incorporated outside Great Britain which has an established place of business within Great Britain, and the expression ‘‘official receiver’’ means the official receiver in bankruptcy. (4) Subsection (1) of this section in its application to Scotland shall have effect as if the words ‘‘sequestration of his estates was awarded’ were substituted for the words ‘“he was adjudged bankrupt.”’ Provisions as to indischarged sankrupts acting as directors. 143. The acts of a director or manager shall be valid notwith- Validity of acts standing any defect that mav afterwards be discovered in his °f directors. appointment or qualification. 144.—(1) Every company shall keep at its registered office a Register of register of its directors or managers containing with respect to each directors. of them the following particulars, that is to sayin the case of an individual, his present christian name and surname, any former christian name or surname, his usual residential address, his nationality, and, if that nationality is not the nationality of origin, his nationality of origin, and his business occupation, if any, or, if he has no business occupation but holds any other directorship or directorships, particulars of that directorshp or of some one of those directorships; and in the case of a corporation, its corporate name ‘nd registered or principal office. 540 - SECRETARIAL PRACTICE (2) The company shall, within the periods respectively mentioned in this subsection, send to the registrar of companies a return in the prescribed form containing the particulars specified in the said register and a notification in the prescribed form of any change among its directors or in any of the particulars contained in the register. The period within which the said return is to be sent shall be a period of fourteen days from the appointment of the first directors of the company, and the period within which the said notification of a change is to be sent shall be fourteen days from the happening thereof. {3) The register to be kept under this section shall during business hours (subject to such reasonable restrictions as the company may by its articles or in general meeting impose, so that not less than two hours in each day be allowed for inspection) be open to the inspection of any member of the company without charge and of any other person on payment of one shilling, or such less sum as the company may prescribe, for each inspection. 4) If any inspection required under this section is refused or if default is made in complying with subsection (1) or subsection (2) of this section, the company and every officer of the company who is in default shall be liable to a default fine. (5) In the case of any such refusal, the court may by order compel an immediate inspection of the register. (6) For the purposes of this section, a person in accordance with whose directions or instructions the directors of a company are accustomed to act shall be deemed to be a director and officer of the company. Particulars with 145.—(1) Every company to which this section applies shall, tespect wo die in all trade catalogues, trade circulars, showcards and business catalogues, letters on or in which the company’s name appears and which are circulars, &. issued or sent by the company to any person in any part of His Majesty's dominions, state in legible characters with respect to every director being a corporation, the corporate name, and with respect to every director being an individual, the following particulars— (a) his present christian name, or the initials thereof, and present surname; (b) any former christian names and surnames; (¢) his nationality, if not British; (4d) his nationality of origin, if his nationality is not the nationality of origin: Provided that, if special circumstances exist which render it in the opinion of the Board of Trade expedient that such an exemption should be granted, the Board may by order grant, subject to such conditions as may be specified in the order, exemption from the obligations imposed by this subsection. COMPANIES ACT, 1929 h1-{2) This section shall apply to— ‘a) every company registered under this Act or the Acts repealed by this Act unless it was registered before the twenty-third day of November, nineteen hundred and sixteen; and every company incorporated outside Great Britain which has an established place of business within Great Britain, unless it had established such a place of business before the said date; and every company licensed under the Moneylenders Act, 17 & 18 Geo. 5. 1927, whenever it was registered or whenever it estab- © 2% lished a place of business. (3) If a company makes default in complying with this section, every director of the company shall be liable on summary conviction for each offence to a fine not exceeding five pounds, and, in the case of a director being a corporation, every director, secretary and officer of the corporation, who is knowingly a party to the default, shall be liable to a like penalty: Provided that in England no proceedings shall be instituted under this section except by, or with the consent of, the Board of [rade. (4) For the purposes of this section— fa) the expression “director” includes any person in accordance with whose directions or instructions the directors of the company are accustomed to act: (b) the expression ‘‘christian name” includes a forename; {¢) the expression ‘‘initials” include a recognised abbreviation of a christian name; in the case of a peer or person usually known by a title different from his surname, the expression ‘“surname” means that title; references to a former christian name or surname do not include— (1) in the case of a peer or a person usually known by a British title different from his surname, the name by which he was known previous to the adoption of or succession to the title; or ii) in the case of natural born British subjects, a former christian name or surname where that name or surname was changed or disused before the person Dearing the name attained the age of eighteen years; or (iii) in the case of a married woman, the name or surname by which she was known previous to the marriage; the expression ‘“showcards’ means cards containing or exhibiting articles dealt with, or samples or representations thereof. Limited company may have directors with unlimited liability. 542 SECRETARIAL PRACTICE 146.—(1) In a limited company the liability of the directors or managers, or of the managing director, may, if so provided by the memorandum, be unlimited. (2) In a limited company in which the liability of a director or manager is unlimited, the directors or managers of the company, if any, and the member who proposes a person for election or appointment to the office of director or manager, shall add to that proposal a statement that the liability of the person holding that office will be unlimited, and the promoters, directors, managers, and secretary, if any, of the company, or one of them, shall, before the person accepts the office or acts therein, give him notice in writing that his liability will be unlimited. (3) If any director, manager, or proposer makes default in adding such a statement, or if any promotor, director, manager, or secretary makes default in giving such a notice, he shall be liable to a fine not exceeding one hundred pounds, and shall also be liable for any damage which the person so elected or appointed may sustain from the default, but the liability of the person elected or appointed shall not be affected by the default. Special resolu- 147.—(1) A limited company, if so authorised by its articles, ng may, by special resolution, alter its memorandum so as to render liability of unlimited the liability of its directors, or managers, or of any manalm aging director. (2) Upon the passing of any such special resolution the provisions thereof shall be as valid as if they had been originally contained in the memorandum. Statement as to remuneration of directors to be furnished to shareholders. 148.—(1) Subject as hereinafter provided, the directors of a company shall, on a demand in that behalf made to them in writing by members of the company entitled to not less than one-fourth of the aggregate number of votes to which all the members of the company are together entitled, furnish to all the members of the company within a period of one month from the receipt of the demand a statement, certified as correct, or with such qualifications as may be necessary, by the auditors of the company, showing as respects each of the last three preceding years in respect of which the accounts of the company have been made up the aggregate amount received in that year by way of remuneration or other emoluments by persons being directors of the company, whether as such directors or otherwise in connection with the management of the affairs of the company, and there shall, in respect of any such diretor who is— (a) a director of any other company which is in relation to the first-mentioned company a subsidiary company; or (b) by virtue of the nomination, whether direct or indirect, of the company a director of any other company; be included in the said aggregate amount any remuneration or other emoluments received by him for his own use whether as a director of, or otherwise in connection with the management of the affairs of. that other company: COMPANIES ACT, 1929 543 Provided that— (i) a demand for a statement under this section shall be of no effect if the company within one month after the date on which the demand is made resolve that the statement shall not be furnished; and it shall be sufficient to state the total aggregate of all sums paid to or other emoluments received by all the directors in each year without specifying the amount received by any individual. 11) {2) In computing for the purpose of this section the amount of any remuneration or emoluments received by any director, the amount actually received by him shall, if the company has paid on his behalf any sum by way of income tax (including super-tax and surtax) in respect of the remuneration or emoluments, be increased by the amount of the sum so paid. (3) If any director fails to comply with the requirements of this section, he shall be liable to a fine not exceeding fifty pounds. 4) In this section the expression “emoluments” includes fees, percentages and other payments made or consideration given, directly or indirectly, to a director as such, and the money value of any allowances or perquisites belonging to his office. 149.—(1) Subject to the provisions of this section, it shall be the Disclosure by duty of a director of a company who is in any way, whether directly ivectore of or indirectly, interested in a contract or proposed contract with the contracts. company to declare the nature of his interest at a meeting of the directors of the company. (2) In the case of a proposed contract the declaration required by this section to be made by a director shall be made at the meeting of the directors at which the question of entering into the contract is first taken into consideration, or if the director was not at the date of that meeting interested in the proposed contract, at the next meeting of the directors held after he became so interested, and in a case where the director becomes interested in a contract after it is made, the said declaration shall be made at the first meeting of the directors held after the director becomes so interested. (3) For the purpose of this section, a general notice given to the directors of a company by a director to the effect that he is a member of a specified company or firm and is to be regarded as Interested in any contract which may, after the date of the notice, be made with that company or firm shall be deemed to be a sufficient declaration of interest in relation to any contract so made. (4) Any director who fails to comply with the provisions of this section shall be liable to a fine not exceeding one hundred pounds. (5) Nothing in this section shall be taken to prejudice the operation of any rule of law restricting directors of a company from having any interest in contracts with the company Provision as to payments received by direc tors for loss of office or on retirement. 644 SECRETARIAL PRACTICE 150.—(1) It is hereby declared that it is not lawful in connection with the transfer of the whole or any part of the undertaking or property of a company for any payment to be made to any director of the company by way of compensation for loss of office, or as consideration for or in connection with his retirement from office, unless particulars with respect to the proposed payment, including the amount thereof, have been disclosed to the members of the company and the proposal approved by the company. (2) Where a payment which is hereby declared to be illegal is made to a director of the company, the amount received shall be deemed to have been received by him in trust for the company. (3) Where a payment is to be made as aforesaid to a director of a company in connection with the transfer to any persons, as a result of an offer made to the general body of shareholders, of all or any of the shares in the company, it shall be the duty of that director to take all reasonable steps to secure that particulars with respect to the proposed payment, including the amount thereof, shall be included in or sent with any notice of the offer made for their shares which is given to any shareholders. (4) If any such director fails to take reasonable steps as aforesaid or if any person who has been properly required by any such director to include the said particulars in or send them with any such notice fails so to do, he shall be liable to a fine not exceeding twenty-five pounds, and if the requirements of the last foregoing subsection are not complied with in relation to any such payment as is mentioned in the said subsection, any sum received by the director on account of the payment shall be deemed to have been received by him in trust for any persons who have sold their shares as a result of the offer made. (5) If in connection with any such transfer as aforesaid the price to be paid to a director of the company whose office is to be abolished or who is to retire from office for any shares in the company held by him is in excess of the price which could at the time have been obtained by other holders of the like shares or any valuable consideration is given to any such director, the excess or the money value of the consideration, as the case may be, shall, for the purposes of this section, be deemed to have been a payment made to him by way of compensation for loss of office or as consideration for or in connection with his retirement from office. (6) Nothing in this section shall be taken to prejudice the operation of any rule of law requiring disclosure to be made with respect to any such payments as are mentioned in this section or with respect to any other like payments made or to be made to the directors of a company. Provisions as to 151. If in the case of any company provision is made by the gninent of articles or by any agreement entered into between any person and directors. the company for empowering a director or manager of the company to assign his office as such to another person, anv assignment of COMPANIES ACT, 1929 645 office made in pursuance of the said provision shall, notwithstanding anything to the contrary contained in the said provision, be of no effect unless and until it is approved by a special resolution of the company. Avoidance of Provisions in Articles or Contracts relieving Officers from Liability. 152. Subject as hereinafter provided, any provision, whether Fepiions gs to contained in the articles of a company or in any contract with a Sy company or otherwise, for exempting any director, manager or auditors. officer of the company, or any person (whether an officer of the company or not) employed by the company as auditor from, or indemnifying him against, any liability which by virtue of any rule of Jaw would otherwise attach to him in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the company shall be void : Provided that— ia) in relation to any such provision which is in force at the date of the commencement of this Act, this section shall have effect only on the expiration of a period of six months from that date; and nothing in this section shall operate to deprive any person of any exemption or right to be indemnified in respect of anything done or omitted to be done by him while anv such provision was is force: and notwithstanding anything in this section, a company may, in pursuance of any such provision as aforesaid, indemnify any such director, manager, officer or auditor against any liability incurred by him in defending any proceedings, whether civil or criminal, in which judgment is given in his favour or in which he is acquitted or in connection with any application under section three hundred and seventy-two of this Act in which relief is granted to him by the court. Arrangements and Reconstructions. 153.—(1) Where a compromise or arrangement is proposed between Power to com a company and its creditors or any class of them, or between the Jrogilse wiih company and its members or any class of them, the court may, on members. the application in a summary way of the company or of any creditor or member of the company, or, in the case of a company being wound up, of the liquidator, order a meeting of the creditors or class of creditors, or of the members of the company or class of members, as the case may be, to be summoned in such manner as the court directs. (2) If a majority in number representing three-fourths in value of the creditors or class of creditors, or members or class of members, as the case may be, present and voting either in person or by proxy at the meeting, agree to any compromise or arrangement, the com- 646 SECRETARIAL PRACTICE promise or arrangement shall, if sanctioned by the court, be binding on all the creditors or the class of creditors, or on the members or class of members, as the case may be, and also on the company or, in the case of a company in the course of being wound up, on the liquidator and contributories of the company. (3) An order made under subsection (2) of this section shall have no effect until an office copy of the order has been delivered to the registrar of companies for registration, and a copy of every such order shall be annexed to every copy of the memorandum of the company issued after the order has been made, or, in the case of a company not having a memorandum, of every copy so issued of the instrument constituting or defining the constitution of the company. (4) If a company makes default in complying with subsection (3) of this section, the company and every officer of the company who is in default shall be liable to a fine not exceeding one pound for each copy in respect of which default is made. (5) In this section the expression “company” means any company liable to be wound up under this Act, and the expression “arrangement” includes a re-organisation of the share capital of the company by the consolidation of shares of different classes or by the division of shares into shares of different classes or by both those methods. Provisions for 154.—(1) Where an application is made to the court under the last ane re. 4 foregoing section of this Act for the sanctioning of a compromise or amalgamation of arrangement proposed between a company and any such persons companies. as are mentioned in that section, and it is shown to the court that the compromise or arrangement has been proposed for the purposes of or in connection with a scheme for the reconstruction of any company or companies or the amalgamation of any two or more companies, and that under the scheme the whole or any part of the undertaking or the property of any company concerned in the scheme fin this section referred to as ‘“‘a transferor company”) is to be transferred to another company (in this section referred to as “the transferee company ”), the court may, either by the order sanctioning the compromise or arrangement or by any subsequent order, make provision for all or any of the following matters: — (a) the transfer to the transferee company of the whole or any part of the undertaking and of the property or liabilities of any transferor company; the allotting or appropriation by the transferee company of any shares, debentures, policies, or other like interests in that company which under the compromise or arrangement are to be allotted or appropriated by that company to or for any person; the continuation by or against the transferee company of any legal proceedings pending by or against any transferor company; COMPANIES ACT, 1929 (d) the dissolution, without winding up, of any transferor company; the provision to be made for any persons, who within such time and in such manner as the court direct, dissent from the compromise or arrangement; such incidental, consequential and supplemental matters as are necessary to secure that the reconstruction or amalgamation shall be fully and effectively carried out. (2) Where an order under this section provides for the transfer of property or liabilities, that property shall, by virtue of the order, be transferred to and vest in, and those liabilities shall, by virtue of the order, be transferred to and become the liabilities of, the transferee company, and in the case of any property, if the order so directs, freed from any charge which is by virtue of the compromise or arrangement to cease to have effect. (3) Where an order is made under this section, every company in relation to which the order is made shall cause an office copy thereof to be delivered to the registrar of companies for registration within seven days after the making of the order, and if default is made in complying with this subsection, the company and every officer of the company who is in default shall be liable to a default fine. (4) In this section the expression ‘‘ property’ includes property, rights and powers of every description, and the expression “liabilities” includes duties. (3) Notwithstanding the provisions of subsection (5) of the last foregoing section, the expression ‘company’ in this section does not include any company other than a company within the meaning of this Act. (A 155.—(1) Where a scheme or contract involving the transfer of shares or any class of shares in a company (in this section referred to as ‘‘the transferor company’) to another company, whether a company within the meaning of this Act or not (in this section referred to as ‘‘the transferee company”), has within four months after the making of the offer in that behalf by the transferee company been approved by the holders of not less than nine-tenths in value of the shares affected, the transferee company may, at any time within two months after the expiration of the said four months, give notice in the prescribed manner to any dissenting shareholder that it desires to acquire his shares, and where such a notice is given the transferee company shall, unless on an application made by the dissenting shareholder within one month from the date on which the notice was given the court thinks fit to order otherwise, be entitled and bound to acquire those shares on the terms on which under the scheme or contract the shares of the approving shareholders are to be transferred to the transferee company: Provided that, where any such scheme or contract has been so approved at any time before the commencement of this Act, the court may by order, on an application made to it by the transferee company within two months after the commencement of this Act, Power to acquire shares of shareholders dissenting from scheme or contract approved by majority. 548 SECRETARIAL PRACTICE authorise notice to be given under this section at any time within fourteen days after the making of the order, and this section shall apply accordingly, except that the terms on which the shares of the dissenting shareholder are to be acquired shall be such terms as the court may by the order direct instead of the terms provided by the scheme or contract. (2) Where a notice has been given by the transferee company under this section and the court has not, on an application made by the dissenting shareholder, ordered to the contrary, the transferee company shall, on the expiration of one month from the date on which the notice has been given, or, if an application to the court by the dissenting shareholder is then pending, after that application has been disposed of, transmit a copy of the notice to the transferor company and pay or transfer to the transferor company the amount or other consideration representing the price payable by the transferee company for the shares which by virtue of this section that company is entitled to acquire, and the transferor company shall thereupon register the transferee company as the holder of those shares. (3) Any sums received by the transferor company under this section shall be paid into a separate bank account, and any such sums and any other consideration so received shall be held by that company on trust for the several persons entitled to the shares in respect of which the said sums or other consideration were respectively received. (4) In this section the expression ‘dissenting shareholder” includes a shareholder who has not assented to the scheme or contract and any shareholder who has failed or refused to transfer his shares to the transferee company in accordance with the scheme or contract. Part V. Winbping Up. (i) PRELIMINARY. Modes of Winding Up. Modes of 156.—(1) The winding up of a company may be either— Winding vp. (a) by the court; or (6) voluntary; or (c) subject to the supervision of the court. (2) The provisions of this Act with respect to winding up apply, unless the contrary appears, to the winding up of a company in any of those modes. Contvibutories. Liability as 157.—(1) In the event of a company being wound up, every ny present and past member shall be liable to contribute to the assets members. of the company to an amount sufficient for payment of its debts and COMPANIES ACT, 1929 649 liabilities, and the costs, charges, and expenses of the winding up, and for the adjustment of the rights of the contributories among themselves, subject to the provisions of subsection (2) of this section and the following qualifications: — (a) a past member shall not be liable to contribute if he has ceased to be a member for one year or upwards before the commencement of the winding up: (b) a past member shall not be liable to contribute in respect of any debt or liability of the company contracted after he ceased to be a member: (c) a past member shall not be liable to contribute unless it appears to the court that the existing members are unable to satisfy the contributions required to be made by them in pursuance of this Act: (d) in the case of a company limited by shares no contribution shall be required from any member exceeding the amount, if any, unpaid on the shares in respect of which he is liable as a present or past member: (e) in the case of a company limited by guarantee, no contribution shall, subject to the provisions of subsection (3) of this section, be required from any member exceeding the amount undertaken to be contributed by him to the assets of the company in the event of its being wound up: nothing in this Act shall invalidate any provision contained in any policy of insurance or other contract whereby the liability of individual members on the policy or contract is restricted, or whereby the funds of the company are alone made liable in respect of the policy or contract: f) (2) a sum due to any member of a company, in his character of a member, by way of dividends, profits or otherwise, shall not be deemed to be a debt of the company, payable to that member in a case of competition between himself and any other creditor not a member of the company, but any such sum may be taken into account for the purpose of the final adjustment of the rights of the contributories among themselves. (2) In the winding up of a limited company, any director or manager, whether past or present, whose liability is, under the provisions of this Act, unlimited, shall, in addition to his liability (if any) to contribute as an ordinary member, be liable to make a further contribution as if he were at the commencement of the winding up a member of an unlimited company: Provided that— fa) a past director or manager shall not be liable to make such further contribution if he has ceased to hold office for a year or upwards before the commencement of the winding up: 340 SECRETARIAL PRACTICE (b) a past director or manager shall not be liable to make such further contribution in respect of any debt or liability of the company contracted after he ceased to hold office: subject to the articles of the company, a director or manager shall not be liable to make such further contribution unless the court deems it necessary to require that contribution in order to satisfy the debts and liabilities of the company, and the costs, charges, and expenses of the winding up. (3) In the winding up of a company limited by guarantee which has a share capital, every member of the company shall be liable, in addition to the amount undertaken to be contributed by him to the assets of the company in the event of its being wound up, to contribute to the extent of any sums unpaid on any shares held by him. Definition of contributory. Nature of liability of contributorv. Contributories in case of death of member. 158. The term ‘‘contributory’’ means every person liable to contribute to the assets of a company in the event of its being wound 1p, and for the purposes of all proceedings for determining, and all proceedings prior to the final determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory. 159. The liability of a contributory shall create a debt (in Engand of the nature of a specialty) accruing due from him at the time when his liability commenced, but payable at the times when calls are made for enforcing the liability. 160.—(1) If a contributory dies either before or after he has been placed on the list of contributories, his personal representatives, and the heirs and legatees of heritage of his heritable estate in Scotland, shall be liable in a due course of administration to contribute to the assets of the company in discharge of his liability and shall be contributories accordingly. (2) Where thé personal representatives are placed on the list of contributories, the heirs or legatees of heritage need not be added, but they may be added as and when the court thinks fit. (3) If in England the personal representatives make default in paying any money ordered to be paid by them, proceedings may be taken for administering the estate of the deceased contributory, and for compelling payment thereout of the money due. Contributories 161. If a contributory becomes bankrupt, either before or after prc of he has been placed on the list of contributories— member. (1) his trustee in bankruptcy shall represent him for all the purposes of the winding-up, and shall be a contributory accordingly, and may be called on to admit to proof against the estate of the bankrupt, or otherwise to allow to be paid (2] COMPANIES ACT, 1929 651 out of his assets in due course of law, any money due from the bankrupt in respect of his liability to contribute to the assets of the company; and there may be proved against the estate of the bankrupt the estimated value of his liability to future calls as well as ca’ already made. 162.—(1) The husband of a female contributory married before Provision as to the date of the commencement of the Married Women’s Property married women. Act, 1882, or the Married Women’s Property (Scotland) Act, 1881, $48 Vict. as the case may be, shall, during the continuance of the marriage, 4+ 7 4s Vict. be liable, as respects any liability attaching to any shares acquired ©“ by her before that date, to contribute to the assets of the company the same sum as she would have been liable to contribute if she had not married, and he shall be a contributory accordingly. (2) Subject as aforesaid, nothing in this Act shall affect the provisions of the Married Women’s Property Act, 1882, or the Married Women’s Property (Scotland) Act, 1881. (ii) Winping Up By THE COUR: Jurisdiction. 163.—(1) The High Court shall have jurisdiction to wind up any company registered in England. (2) In the case of a company whose registered office is situate within the jurisdiction of the Chancery Court of the County Palatine of Lancaster or the Chancery Court of the County Palatine of Durham, the palatine court shall have concurrent jurisdiction with the High Court to wind up the company. (3) Where the amount of the share capital of a company paid up or credited as paid up does not exceed ten thousand pounds, the county court of the district in which the registered office of the company is situate shall, subject to the provisions of this section, have concurrent jurisdiction with the High Court to wind up the company. Jurisdiction to wind up companies registered in England. {4) Where a company is formed for working mines within the stannaries and is not shown to be working mines beyond the limits of the stannaries or to be engaged in any other undertaking beyond those limits, or to have entered into a contract for such working or undertaking, the court exercising the stannaries jurisdiction shall, whatever may be the amount of the capital of the company and wherever the registered office of the company is situate, have con: current jurisdiction with the High Court to wind up the company. (5) The Lord Chancellor may by order exclude a county court from having jurisdiction under this Act, and for the purposes of that jurisdiction may attach its district, or any part thereof, to any other county court, and may revoke or vary any such order. 59 & 60 Vict. C. 45. 552 SECRETARIAL PRACTICE In exercising his powers under this section, the Lord Chancellor shall provide that a county court shall not have jurisdiction under this Act unless it has for the time being jurisdiction in bankruptcy. An order made under this provision shall not affect any jurisdiction or powers vested in any county court under or by virtue of the Stannaries Jurisdiction (Abolition) Act, 1896. (6) Every court in England having jurisdiction under this Act to wind up a company shall for the purposes of that jurisdiction have all the powers of the High Court, and every prescribed officer of the court shall perform any duties which an officer of the High Court may discharge by order of the judge thereof or otherwise in relation to the winding up of a company. (7) Nothing in this section shall invalidate a proceeding by reason of its being taken in a wrong court. (8) For the purposes of this section, the expression ‘registered office” means the place which has longest been the registered office of the company during the six months immediately preceding the presentation of the petition for winding-up. Conduct of 164.—(1) Subject to any order made under section fifty-seven winding » High OF section sixty A. of the Supreme Court of Judicature (Consolidation) Dou in Eng- Act, 1925, and without prejudice to the power to make orders of 15 & 16 Geo. 5. transfer under that Act, the jurisdiction of the High Court to wind C. 49 up companies in England under this Act shall, as the Lord Chancellor may from time to time by general order direct, be exercised either by such judge or judges of the Chancery Division of the High Court as the Lord Chancellor may assign for the purpose or by the judge or judges for the time being exercising the bankruptcy jurisdiction of the High Court. (2) The Lord Chancellor may give directions as aforesaid either generally or with respect to any specified classes of cases. (3) Provision may be made by general rules for regulating the exercise of the said jurisdiction of the High Court under this Act. Transfer of pro- 165.—(1) The winding up of a company by the court in England sings on or any proceedings in the winding up may at any time and at any another and ~~ Stage, and either with or without application from any of the parties statement of thereto, be transferred from one court to another court, or may be ibid UY retained in the court in which the proceedings were commenced, although it may not be the court in which they ought to have been commenced. (2) The powers of transfer given by the foregoing provisions of this section may, subject to and in accordance with general rules, be exercised by the Lord Chancellor or by any judge of the High Court having jurisdiction under this Act, or, as regards any case within the jurisdiction of any other court, by the judge of that court. COMPANIES ACT, 1929 652 (3) If any question arises in any winding up proceeding in a county court which all the parties to the proceeding, or which one of them and the judge of the court, desire to have determined in the first instance in the High Court, the judge shall state the facts in the form of a special case for the opinion of the High Court, and thereupon the special case and the proceedings, or such of them as may be required, shall be transmitted to the High Court for the purposes of the determination. 166.—(1) The Court of Session shall have jurisdiction to wind up any company registered in Scotland. (2) When the Court of Session is in vacation, the jurisdiction conferred on that court by this section may, subject to the provisions of this Act, be exercised by the Lord Ordinary on the Bills. (3) Where the amount of the share capital of a company paid up or credited as paid up does not exceed ten thousand pounds, the sheriff court of the sheriffdom in which the registered office of the company is situate shall have concurrent jurisdiction with the Court of Session to wind up the company: Provided that— (a) it shall be lawful for the Court of Session, if it appears to the court having regard to the amount of the assets of the company expedient to do so, to remit to any sheriff court any petition presented to the Court of Session for winding up any such company, or to require any such petition presented to a sheriff court to be remitted to the Court of Session; and it shall be lawful for the Court of Session to require that any such petition as aforesaid presented to one sheriff court be remitted to another sheriff court; and in a winding up in the sheriff court it shall be lawful for the sheriff court to submit a stated case for the opinion of the Court of Session on any question of law arising in that winding up. (4) For the purposes of this section, the expression ‘‘ registered office” means the place which has longest been the registered office of the company during the six months immediately preceding the presentation of the petition for winding up. Cc, 167. Where the Court of Session makes a winding-up order, it may, if it thinks fit, at any time direct all subsequent proceedings in the winding up to be taken before one of the permanent Lords Ordinary, and remit the winding up to him accordingly, and thereupon that Lord Ordinary shall, for the purposes of the winding up, have all the powers and jurisdiction of the court: Provided that the Lord Ordinary may report to the division of the court any matter which may arise in the course of the winding up. Jurisdiction to wind up comnanies in Scotland, Power in Scotland to remit winding up to Lord Ordinary Circumstances in which company may be wound up by court. Definition of inability to pay debts. Provisions as to applications for winding up. 654 SECRETARIAL PRACTICE Cases in which Company may be wound up by Court. 168. A company may be wound up by the court if— (1) the company has by special resolution resolved that the company be wound up by the court: default is made in delivering the statutory report to the registrar or in holding the statutory meeting: the company does not commence its business within a year from its incorporation, or suspends its business for a whole year: the number of members is reduced, in the case of a private company, below two, or, in the case of any other company, below seven: (5) the company is unable to pay its debts: (6) the court is of opinion that it is just and equitable that the company should be wound up. 169. A company shall be deemed to be unable to pay its debts— (1) if a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding fifty pounds then due, has served on the company, by leaving it at the registered office of the company, a demand under his hand requiring the company to pay the sum so due, and the company has for three weeks thereafter neglected to pay the sum, or to secure or compound for it to the reasonable satisfaction of the creditor; or if, in England or Northern Ireland, execution or other process issued on a judgment, decree or order of any court in favour of a creditor of the company is returned unsatisfied in whole or in part; or if, in Scotland, the inducie of a charge for payment on an extract decree, or an extract registered bond, or an extract registered protest have expired without payment being made; or if it is proved to the satisfaction of the court that the company is unable to pay its debts, and, in determining whether a company is unable to pay its debts, the court shall take into account the contingent and prospective liabilities of the company. Petition for Winding Up and Effects thereof. ~ 170.—(1) An application to the court for the winding up of a company shall be by petition, presented subject to the provisions of this section either by the company, or by any creditor or creditors (including any contingent or prospective creditor or creditors), contributory or contributories, or by all or any of those parties, together or separately: COMPANIES ACT, 1929 H5 3 Provided that— (a) A contributory shall not be entitled to present a winding-up petition unless— (i) either the number of members is reduced, in the case of a private company, below two, or, in the case of any other company, below seven; or (ii) the shares in respect of which he is a contributory, or some of them, either were originally allotted to him or have been held by him, and registered in his name, for at least six months during the eighteen months before the commencement of the winding up, or have devolved on him through the death of a former holder; and A winding-up petition shall not, if the ground of the petition is default in delivering the statutory report to the registrar or in holding the statutory meeting, be presented by any person except a shareholder, nor before the expiration of fourteen days after the last day on which the meeting ought to have been held; and The court shall not give a hearing to a winding-up petition presented by a contingent or prospective creditor until such security for costs has been given as the court thinks reasonable and until a prima facie case for winding up has been established to the satisfaction of the court. (b) c) (2) Where a company is being wound up voluntarily or subject to supervision in England, a winding-up petition may be presented by the official receiver attached to the court as well as by any other person authorised in that behalf under the other provisions of this section, but the court shall not make a winding-up order on the petition unless it is satisfied that the voluntary winding up or winding up subject to supervision cannot be continued with due regard to the interest of the creditors or contributories. (3) Where under the provisions of this Part of this Act any person as being the husband of a female contributory is himself a contributory, and a share has during the whole or any part of the six months mentioned in proviso (a) (ii) to subsection (1) of this section been held by or registered in the name of the wife, or by or in the name of a trustee for the wife or for the husband, the share shall, for the purposes of this section, be deemed to have been held bv and registered in the name of the husband. 171.—(1) On hearing a winding-up petition the court may dismiss powers of court it, or adjourn the hearing conditionally or unconditionally, or make on hearing any interim order, or any other order that it thinks fit, but the Destion, court shall not refuse to make a winding-up order on the ground only that the assets of the company have been mortgaged to an amount equal to or in excess of those assets. or that the company has no assets. H56 SECRETARIAL PRACTICE (2) Where the petition is presented on the ground of default in delivering the statutory report to the registrar or in holding the statutory meeting, the court may— (a) instead of making a winding-up order, direct that the statutory report shall be delivered or that a meeting shall be held; and (b) order the costs to be paid by any persons who, in the opinion of the court, are responsible for the default. Pores Su say or 172. At any time after the presentation of a winding-up petition, IE il and before a winding-up order has been made, the company, or company. any creditor or contributory, may— (a) where any action or proceeding against the company is pending in the High Court or Court of Appeal in England or Northern Ireland, apply to the court in which the action or proceeding is pending for a stay of proceedings therein; and where any other action or proceeding is pending against the company, apply to the court having jurisdiction to wind up the company to restrain further proceedings in the action or proceeding; and the court to which application is so made may, as the case may be, stay or restrain the proceedings accordingly on such terms as it thinks fit. Avoids of 173. In a winding up by the court, any disposition of the property ro hy of the company, including things in action, and any transfer of after commence- shares, or alteration in the status of the members of the company, ot of winding ade after the commencement of the winding up, shall, unless the court otherwise orders, be void. Avoidance ot 174.—(1) Where any company registered in England is being in case of Eng. wound up by the court, any attachment, sequestration, distress, or he company execution put in force against the estate or effects of the company wud og after the commencement of the winding up shall be void to all land of Scottish intents. company. (2) The provisions of this section shall, so far as relates to any estate or effects of the company situate in England, apply in the case of a company registered in Scotland as it applies in the case of a company registered in England. Commencement of Winding Ub. Commencement ~~ 175.—(1) Where before the presentation of a petition for the of winding uP bY winding up of a company by the court a resolution has been passed by the company for voluntary winding up, the winding up of the company shall be deemed to have commenced at the time of the passing of the resolution, and unless the court, on proof of fraud or mistake, thinks fit otherwise to direct, all proceedings taken in the voluntary winding up shall be deemed to have been validly taken. COMPANIES ACT, 192: 657 (2) In any other case, the winding up of a company by the court shall be deemed to commence at the time of the presentation of the petition for the winding up. Consequences of Winding-up Order. 176. On the making of a winding-up order, a copy of the order must forthwith be forwarded by the company, or otherwise as may be prescribed, to the registrar of companies, who shall make a minute thereof in his books relating to the company. 177. When a winding-up order has been made, or a provisional Actions stayed liquidator has been appointed, no action or proceeding shall be o%¥ndirg-up proceeded with or commenced against the company except by leave of the court, and subject to such terms as the court may impose. Copy of order to oe forwarded to registrar. 178. An order for winding up a company shall operate in favour Effect of ind of all the creditors and of all the contributories of the company "&"P reer as if made on the joint petition of a creditor and of a contributory. Official Receiver in English Winding Up. 179.—(1) For the purposes of this Act so far as it relates to the Official receiver winding up of companies by the court in England, the term “official pankupley receiver” means the official receiver, if any, attached to the court receiver for for bankruptcy purposes, or, if there is more than one such official Sw receiver, then such one of them as the Board of Trade may appoint, or, if there is no such official receiver, then an officer appointed for the purpose by the Board. (2) Any such officer shall for the purpose of his duties unde this Act be styled ‘‘ the official receiver ”’ 180. If in the case of the winding up of any company by the court in England it appears to the court desirable, with a view to securing the more convenient and economical conduct of the winding up, that some officer, other than the person who would by virtue of the last foregoing section of this Act be the official receiver, should be the official receiver for the purposes of that winding up, the court may appoint that other officer to act as official receiver in that winding up, and the person so appointed shall be deemed to be the official receiver in that winding up for all the purposes of this Act. 181.—(1) Where the court in England has made a winding-up order or appointed a provisional liquidator, there shall, unless the court thinks fit to order otherwise and so orders, be made out and submitted to the official receiver a statement as to the affairs of the company in the prescribed form, verified by affidavit, and showing the particulars of its assets, debts, and liabilities, the names, residences, and occupations of its creditors, the securities held by them respectively, the dates when the securities were respectively given, and such further or other information as may be prescribed or as the official receiver mav require Appointment ot official receiver by Court in certain cases. Statement of company’s affairs to be submitted to official receiver 558 SECRETARIAL PRACTICE (2) The statement shall be submitted and verified by one or more of the persons who are at the relevant date the directors and by the person who is at that date the secretary or other chief officer of the company, or by such of the persons hereinafter in this subsection mentioned as the official receiver, subject to the direction of the court, may require to submit and verify the statement, that is to say, persons— (a) who are or have been directors or officers of the company; (b) who have taken part in the formation of the company at any time within one year before the relevant date; who are in the employment of the company, or have been in the employment of the company within the said year, and are in the opinion of the official receiver capable of giving the information required; who are or have been within the said year officers of or in the employment of a company, which is, or within the said year was, an officer of the company to which the statement relates. (3) The statement shall be submitted within fourteen days from the relevant date, or within such extended time as the official receiver or the court may for special reasons appoint. (4) Any person making or concurring in making the statement and affidavit required by this section shall be allowed, and shall be paid by the official receiver or provisional liquidator, as the case may be, out of the assets of the company, such costs and expenses incurred in and about the preparation and making of the statement and affidavit as the official receiver may consider reasonable, subject to an appeal to the court. (5) If any person, without reasonable excuse, makes default in complying with the requirements of this section, he shall be liable to a fine not exceeding ten pounds for every day during which the default continues. (d) (6) Any person stating himself in writing to be a creditor or contributory of the company shall be entitled by himself or by his agent at all reasonable times, on payment of the prescribed fee, to inspect the statement submitted in pursuance of this section, and to a copy thereof or extract therefrom. (7) Any person untruthfully so stating himself to be a creditor or contributory shall be guilty of a contempt of court and shall, on the application of the liquidator or of the official receiver, be punishable accordingly. (8) In this section the expression ‘‘ the relevant date’ means in a case where a provisional liquidator is appointed, the date of his appointment, and, in a case where no such appointment is made, the date of the winding up order. Report by 182.—(1) In a case where a winding-up order is made, the official official receiver. receiver shall, as soon as practicable after receipt of the statement to be submitted under the last foregoing section, or, in a case where COMPANIES ACT, 1929 656 the court orders that no statement shall be submitted, as soon as practicable after the date of the order, submit a preliminary report to the court— (a) as to the amount of capital issued, subscribed, and paid up, and the estimated amount of assets and liabilities; and (6) if the company has failed, as to the causes of the failure; and whether in his opinion further inquiry is desirable as to any matter relating to the promotion, formation, or failure of the company, or the conduct of the business thereof. (2) The official receiver may also, if he thinks fit, make a further report, or further reports, stating the manner in which the company was formed and whether in his opinion any fraud has been committed by any person in its promotion or formation, or by any director or other officer of the company in relation to the gompany since the formation thereof, and any other matters which in his opinion it is desirable to bring to the notice of the court. (3) If the official receiver states in any such further report as aforesaid that in his opinion a fraud has been committed as aforesaid, the court shall have the further powers provided in sections two hundred and sixteen and two hundred and seventeen of this Act. Liquidators. 183. For the purpose of conducting the proceedings in winding Power of court : . 5 to appoint up a company and performing such duties in reference thereto as liquidators. the court may impose, the court may appoint a liquidator or liquidators. 184.—(1) Subject to the provisions of this section, the court may appoint a liquidator provisionally at any time after the presentation of a winding-up petition. (2) Where the proceedings are in England, the appointment of a provisional liquidator may be made at any time before the making of a winding up order, and either the official receiver or any other fit person may be appointed. (3) Where the proceedings are in Scotland, the appointment of a provisional liquidator may be made at anv time before the first appointment of liquidators. (4) Where a liquidator is provisionally appointed by the court, the court may limit and restrict his powers by the order appointing him. 185. The following provisions with respect to liquidators snal have effect on a winding-up order being made in England :~ (1) The official receiver shall by virtue of his office become the provisional liquidator and shall continue to act as such until he or another person becomes liquidator and is capable of acting as such: Appointment and powers of provisional liquidator. Appointment, style, &c., of liquidators in England. 560 SECRETARIAL PRACTICE (2) The official receiver shall summon separate meetings of the creditors and contributories of the company for the purpose of determining whether or not an application is to be made to the court for appointing a liquidator in the place of the official receiver: The court may make any appointment and order required to give effect to any such determination, and, if there is a difference between the determinations of the meetings of the creditors and contributories in respect of the matter aforesaid, the court shall decide the difference and make such order thereon as the court may think fit: In a case where a liquidator is not appointed by the court, the official receiver shall be the liquidator of the company: The official receiver shall by virtue of his office be the liquidator during any vacancy: A liquidator shall be described, where a person other than the official receiver is liquidator, by the style of “the liquidator,” and, where the official receiver is liquidator, by the style of ‘“the official receiver and liquidator,” of the particular company in respect of which he is appointed, and not by his individual name. 3) 4) (5) (6) Provisions 186. Wherein the winding up of a company by the court in England thar than a person other than the official receiver is appointed liquidator, that official receiver person— faurdator. (x) shall not be capable of acting as liquidator until he has notified his appointment to the registrar of companies and given security in the prescribed manner to the satisfaction of the Board of Trade: shall give the official receiver such information and such access to and facilities for inspecting the books and documents of the company, and generally such aid as may be requisite for enabling that officer to perform his duties under this Act. Provisions as to 187. The following provisions with respect to the liquidators shall yeatons in have effect in a winding up by the court in Scotland :— (1) The court may determine whether any and what security is to be given by a liquidator on his appointment: A liquidator shall be described by the style of ‘the official liquidator” of the particular company in respect of which he is appointed and not by his individual name: Where an order has been made for winding up a company subject to supervision, and an order is afterwards made for winding up by the court, the court may by the lastmentioned or by any subsequent order appoint any person who is then liquidator, either provisionally or permanently, and either with or without any other person, to be liquidator in the winding up by the court. COMPANIES ACT, 192¢ 361 188.—(1) A liquidator appointed by the court may resign or, on General procause shown, be removed by the court. Cs bg (2) Where a person other than the official receiver is appointed liquidator, he shall receive such salary or remuneration by way of percentage or otherwise as the court may direct, and, if more such persons than one are appointed liquidators, their remuneration shall be distributed among them in such proportions as the court directs. (3) A vacancy in the office of a liquidator appointed by the court shall be filled by the court. (4) If more than one liquidator is appointed by the court, the court shall declare whether any act by this Act required or authorised to be done by the liquidator is to be done by all or any one or more of the persons appointed. {5) Subject to the provisions of section two hundred and seventy-eight of this Act, the acts of a liquidator shall be valid notwithstanding any defects that may afterwards be discovered in his appointment or qualification. 189.—(1) Where a winding-up order has been made or where Custody of a provisional liquidator has been appointed, the liquidator, or the po=eey® provisional liquidator, as the case may be, shall take into his custody, or under his control, all the property and things in action to which the company is or appears to be entitled. (2) In a winding up by the court in Scotland, if and so long athere is no liquidator, all the property of the company shall b+ deemed to be in the custody of the court. 190. Where a company is being wound up by the court, the court may on the application of the liquidator by order direct that all or any part of the property of whatsoever description belonging to the company or held by trustees on its behalf shall vest in the liquidator by his official name, and thereupon the property to which the order relates shall vest accordingly, and the liquidator may, after giving such indemnity, if any, as the court may direct, bring or defend in his official name any action or other legal proceeding which relates to that property or which it is necessary to bring or defend for the purpose of effectually winding up the company and recovering its property. Vesting of property of company in liquidator. 191.—(1) The liquidator in a winding up by the court shall have Powers of power with the sanction either of the court or of the comm‘ +=e of liquidator inspection— (a) to bring or defend any action or other legal proc in the name and on behalf of the company: to carry on the business of the company, so far as may bv necessary for the beneficial winding up thereof: to appoint a solicitor or law arent to assist him in the performance of his duties: to pay any classes of creditors iu ruil 5962 SECRETARIAL PRACTICE (e) to make any compromise or arrangement with creditors or persons claiming to be creditors, or having or alleging themselves to have any claim, present or future, certain or contingent, ascertained or sounding only in damages against the company, or whereby the company may be rendered liable: to compromise all calls and liabilities to calls, debts, and liabilities capable of resulting in debts, and all claims, present or future, certain or contingent, ascertained or sounding only in damages, subsisting or supposed to subsist between the company and a contributory, or alleged contributory, or other debtor or person apprehending liability to the company, and all questions in any way relating to or affecting the assets or the winding up of the company, on such terms as may be agreed, and take any security for the discharge of any such call, debt, liability or claim, and give a complete discharge in respect thereof. The liquidator in a winding up by the court shall have } (2) power— (@) to sell the real and personal property and things in action of the company by public auction or private contract, with power to transfer the whole thereof to any person or company, or to sell the same in parcels: to do all acts and to execute, in the name and on behalf of the company, all deeds, receipts, and other documents, and for that purpose to use, when necessary, the company’s seal: to prove, rank, and claim in the bankruptcy, insolvency, or sequestration of any contributory, for any balance against his estate, and to receive dividends in the bankruptcy, insolvency, or sequestration in respect of that balance, as a separate debt due from the bankrupt or insolvent, and rateably with the other separate creditors: 0 draw, accept, make, and indorse any bill of exchange or promissory note in the name and on behalf of the company, with the same effect with respect to the liability of the company as if the bill or note had been drawn, accepted, made, or indorsed by or on behalf of the company in the course of its business: to raise on the security of the assets of the company any money requisite: to take out in his official name letters of administration to any deceased contributary, and to do in his official name any other act necessary for obtaining payment of any money due from a contributory. or his estate which cannot be conveniently done in the name of the company, and in all such cases the money due shall, for the purpose of enabling the liquidator to take out the letters of administration or recover the money, be deemed to be due to the liquaditor himself: (b) ‘c) ‘d) , 2) \ 14) COMPANIES ACT, 1929 663 (g) to appoint an agent to do any business which the liquidator is unable to do himself: to do all such other things as may be necessary for winding up the affairs of the company and distributing its assets. (3) The exercise by the liquidator in a winding up by the court of the powers conferred by this section shall be subject to the control of the court, and any creditor or contributory may apply to the court with respect to any exercise or proposed exercise of any of those powers. (4) In the case of a winding up in Scotland, the court may provide by any order that the liquidator may, where there is no committee of inspection, exercise any of the powers mentioned in paragraph (a) or paragraph (b) of subsection (1) of this section without the sanction or intervention of the court. (5) In a winding up by the court in Scotland, the liquidator shall, subject to general rules, have the same powers as a trustee on a bankrupt estate. 192.—(1) Subject to the provisions of this Act, the liquidator of a company which is being wound up by the court in England shall, in the administration of the assets of the company and in the distribution thereof among its creditors, have regard to any directions that may be given by resolution of the creditors or contributories at any general meeting, or by the committee of inspection, and any directions given by the creditors or contributories at any general meeting shall in case of conflict be deemed to override any directions given by the committee of inspection. (2) The liquidator may summon general meetings of the creditors or contributories for the purpose of ascertaining their wishes, and it shall be his duty to summon meetings at such times as the creditors or contributories, by resolution, either at the meeting appointing the liquidator or otherwise, may direct, or whenever requested in writing to do so by one-tenth in value of the creditors or contributories as the case may be. (3) The liquidator may apply to the court in manner prescribed or directions in relation to any particular matter arising under the winding up. (4) Subject to the provisions of this Act, the liquidator shall use his own discretion in the management of the estate and its distribution among the creditors. (5) If any person is aggrieved by any act or decision of the liquidator, that person may apply to the court, and the court may confirm, reverse, or modify the act or decision complained of, and make such order in the premises as it thinks just. 193. Every liquidator of a company which is being wound up by the court in England shall keep, in manner prescribed, proper books in which he shall cause to be made entries or minutes of proceedings Exercise and control of igquidator’s powers in England. Books to be kept by liquidator in England. b64 SECRETARIAL PRACTICE at meetings, and of such other matters as may be prescribed, and any creditor or contributory may, subject to the control of the court, personally or by his agent inspect anv such books. Payments of liquidator in England into bank. 194.—(1) Every liquidator of a company which is being wound up by the court in England shall, in such manner and at such times as the Board of Trade, with the concurrence of the Treasury, direct, pay the money received by him to the Companies Liquidation Account at the Bank of England, and the Board shall furnish him with a certificate of receipt of the money so paid: Provided that, if the committee of inspection satisfy the Board of Trade that for the purpose of carrying on the business of the company or of obtaining advances, or for any other reason, it is for the advantage of the creditors or contributories that the liquidator should have an account with any other bank, the Board shall, on the application of the committee of inspection, authorise the liquidator to make his payments into and out of such other bank as the committee may select, and thereupon those payments shall be made in the prescribed manner. (2) If any such liquidator at any time retains for more than ten days a sum exceeding fifty pounds, or such other amount as the Board of Trade in any particular case authorise him to retain, then, unless he explains the retention to the satisfaction of the Board, he shall pay interest on the amount so retained in excess at the rate of twenty per cent. per annum, and shall be liable to disallowance of all or such part of his remuneration as the Board may think just, and to be removed from his office by the Board, and shall be liable to pay any expenses occasioned by reason of his default. (3) A liquidator of a company which is being wound up by the court in England shall not pay any sums received by him as liquidator into his private banking account. Audit of liquidator’s accounts in England. 195.—(1) Every liquidator of a company which is being wound up by the court in England shall, at such times as may be prescribed but not less than twice in each year during his tenure of office, send to the Board of Trade, or as they direct, an account of his receipts and payments as liquidator. (2) The account shall be in a prescribed form, shall be made in duplicate, and shall be verified by a statutory declaration in the prescribed form. (3) The Board shall cause the account to be audited and for the purpose of the audit the liquidator shall furnish the Board with such vouchers and information as the Board may require, and the Board may at any time require the production of and inspect any books or accounts kept by the liquidator. (4) When the account has been audited, one copy thereof shall be filed and kept by the Board, and the other copy shall be delivered to the court for filing, and each copy shall be open to the inspection of any creditor, or of any person interested. COMPANIES ACT, 1929 HfL (5) The Board shall cause the account when audited or a summary thereof to be printed, and shall send a printed copy of the account or summary by post to every creditor and contributorv. 196.—(1) The Board of Trade shall take cognizance of the conduct of liquidators of companies which are being wound up by the court in England, and, if a liquidator does not faithfully perform his duties and duly observe all the requirements imposed on him by statute, rules, or otherwise with respect to the performance of his duties, or if any complaint is made to the Board by any creditor or contributory in regard thereto, the Board shall inquire into the matter, and take such action thereon as they may think expedient. Control of Board of Trade over liquidators in England. (2) The Board may at any time require any liquidator of a company which is being wound up by the court in England to answer any inquiry in relation to any winding up in which he is engaged, and may, if the Board think fit, apply to the court to examine him or any other person on oath concerning the winding up. (3) The Board may also direct a local investigation to be made of the books and vouchers of the liquidator. 197.—(1) When the liquidator of a company which is being wound up by the court in England has realised all the property of the company, or so much thereof as can, in his opinion, be realised without needlessly protracting the liquidation, and has distributed a final dividend, if any, to the creditors, and adjusted the rights of the contributories among themselves, and made a final return, if any, to the contributories, or has resigned, or has been removed from his office, the Board of Trade shall, on his application, cause a report on his accounts to be prepared, and, on his complying with all the requirements of the Board, shall take into consideration the report, and any objection which may be urged by any creditor or contributory, or person interested against the release of the liquidator, and shall either grant or withhold the release accordingly, subject nevertheless to an appeal to the High Court. Release of liquidators in England. (2) Where the release of a liquidator is withheld, the court may, on the application of any creditor or contributory, or person interested, make such order as it thinks just, charging the liquidator with the consequences of any act or default which he may have done or made contrary to his duty. (3) An order of the Board of Trade releasing the liquidator shall discharge him from all liability in respect of any act done or default made by him in the administration of the affairs of the company, or otherwise in relation to his conduct as liquidator, but any such order may be revoked on proof that it was obtained by fraud or by suppression or concealment of any material fact. (4) Where the liquidator has not previously resigned or been removed, his release shall operate as a removal of him from his office. HHH SECRETARIAL PRACTICE Committees of Inspection. Mogiings of a. 198.—(1) When a winding-up order has been made by the court contributories to in England, it shall be the business of the separate meetings of determine creditors and contributories summoned for the purpose of determittee of inspec- Mining whether or not an application should be made to the court Lion hall pe for appointing a liquidator in place of the official receiver, to deter-’ mine further whether or not an application is to be made to the court for the appointment of a committee of inspection to act with the liquidator and who are to be members of the committee if appointed. (2) When a winding-up order has been made by the court in Scotland, the liquidator shall summon separate meetings of the creditors and contributories of the company for the purpose of determining whether or not an application is to be made to the court for the appointment of a committee of inspection to act with the liquidator and who are to be the members of the committee if appointed: Provided that, where the winding-up order has been made on the ground that the company is unable to pay its debts, it shall not be necessary for the liquidator to summon a meeting of the contributories. (3) The court may make any appointment and order required to give effect to any such determinatioii, and if there is a difference between the determinations of the meetings of the creditors and contributories in respect of the matters aforesaid the court shall decide the difference and make such order thereon as the court may think fit. Constitution and 199.—(1) A committee of inspection appointed in pursuance of proceedings of this Act shall consist of creditors and contributories of the company inspection. or persons holding general powers of attorney from creditors or contributories in such proportions as may be agreed on by the meetings of creditors and contributories, or as, in case of difference, may be determined by the court: Provided that, where in Scotland a winding-up order has been made on the ground that a company is unable to pay its debts, the committeé shall consist of creditors or persons holding general powers of attorney from creditors. (2) The committee shall meet at such times as they from time to time appoint, and, failing such appointment, at least once a month, and the liquidator or any member of the committee may also call a meeting of the committee as and when he thinks necessary. (3) The committee may act by a majority of their members present at a meeting, but shall not act unless a majority of the committee are present. (4) A member of the committee may resign by notice in writing signed by him and delivered to the liquidator. (5) If a member of the committee becomes bankrupt, or compounds or arranges with his creditors, or is absent from five con- COMPANIES ACT, 1929 667 secutive meetings of the committee without the leave of those members who together with himself represent the creditors or contributories, as the case may be, his office shall thereupon become vacant. (6) A member of the committee may be removed by an ordinary resc’ution at a meeting of creditors, if he represents creditors, or of contributories, if he represents contributories, of which seven days’ notice has been given, stating the object of the meeting. (7) On a vacancy occurring in the committee the liquidator shall forthwith summon a meeting of creditors or of contributories, as the case may require, to fill the vacancy, and the meeting may, by resolution, re-appoint the same or appoint another creditor or contributory to fill the vacancy. (8) The continuing members of the committee, if not less than two. may act notwithstanding any vacancy in the committee. 200. Where in the case of a winding up in England there is no committee of inspection, the Board of Trade may, on the application of the liquidator, do any act or thing or give any direction or permission which is by this Act authorised or required to be done or given by the committee. 201. In the case of a winding up in Scotland, the committee of inspection shall, in addition to the powers and duties conferred and imposed on it by this Act, have such of the powers and duties of commissioners on a bankrupt estate as may be conferred and imposed on committees of inspection by general rules. General Powers of Court in case of Winding-up by Court. 202.—(1) The court may at any time after an order for winding up, on the application either of the liquidator, or the official receiver, or any creditor or contributory, and on proof to the satisfaction of the court that all proceedings in relation to the winding up ought to be stayed, make an order staying the proceedings, either altogether or for a limited time, on such terms and conditions as the court thinks fit. (2) On any application under this section the court may, before making an order, require the official receiver to furnish to the court a report with respect to any facts or matters which are in his opinion relevant to the application. Powers of Board »f Trade in England where no committee of inspection. Additional powers of committee of inspecion in Scotland. Power to stay winding up. 203.—(x) As soon as may be after making a winding-up order, the settlement of court shall settle a list of contributories, with power to rectify the ig ang a register of members in all cases where rectification is required in plication of pursuance of this Act, and shall cause the assets of the company to assets. be collected, and applied in discharge of its liabilities: Provided that, where it appears to the court that it will not be necessary to make calls on or adjust the rights of contributories. the ourt may dispense with the settlement of a list of contributories. 568 SECRETARIAL PRACTICE (2) In settling the list of contributories, the court shall distinguish between persons who are contributories in their own right and persons who are contributories as being representatives of or liable for the debts of others. Delivery of property to liquidator. Payment of debts due by contributory to company and extent to which set-off allowed. Power of court to make calls. 204. The court may, at any time after making a winding-up order, require any contributory for the time being on the list of contributories, and any trustee, receiver, banker, agent or officer of the company to pay, deliver, convey, surrender, or transfer forthwith, or within such time as the court directs, to the liquidator any money, property, or books and papers in his hands to which the company is primé facie entitled. 205.—(1) The court may, at any time after making a winding-up order, make an order on any contributory for the time being on the list of contributories to pay, in manner directed by the order, any money due from him or from the estate of the person whom he represents to the company, exclusive of any money payable by him or the estate by virtue of any call in pursuance of this Act. (2) The court in making such an order may— (a) in the case of an unlimited company, allow to the contributory by way of set-off any money due to him or to the estate which he represents from the company on any independent dealing or contract with the company, but not any money due to him as a member of the company in respect of any dividend or profit; and in the case of a limited company, make to any director or manager whose liability is unlimited or to his estate the like allowance. (3) In the case of any company, whether limited or unlimited, when all the creditors are paid in full, any money due on any account whatever to a contributory from the company may be allowed to him bv wav of set-off against anv subsequent call. (b) 206.—(1) The court may, at any time after making a winding-up order, and either before or after it has ascertained the sufficiency of the assets of the company, make calls on all or any of the contributories for the time being settled on the list of the contributories to the extent of their liability, for payment of any money which the court considers necessary to satisfy the debts and liabilities of the company, and the costs, charges, and expenses of winding up, and for the adjustment of the rights of the contributories among themselves, and make an order for payment of any calls so'made. (2) In making a call the court may take into consideration the probability that some of the contributories may partly or wholly fail to pay the call. Payrient into 207.—(1) The court may order any contributory, purchaser or Sue to company, Other person from whom money is due to the company to pay the amount due into the Bank of England or any branch thereof to the COMPANIES ACT, 1929 564 account of the liquidator instead of to the liquidator, and any such order may be enforced in the same manner as if it had directed payment to the liquidator. (2) All moneys and securities paid or delivered into the Bank of England or any branch thereof in the event of a winding up by the court shall be subject in all respects to the orders of the court. 208.—(1) An order made by the court on a contributory shall, Order on consubject to any right of appeal, be conclusive evidence that the money, fine vom ce if any, thereby appearing to be due or ordered to be paid is due. (2) All other pertinent matters stated in the order shall be taken to be truly stated as against all persons and in all proceedings, except proceedings in Scotland against the heritable estate of a deceased contributory, in which case the order shall be only prima facie evidence for the purpose of charging his heritable estate, unless his heirs or legatees of heritage were on the list of contributories at the time of the order being made. 209.—(1) Where in proceedings in England the official receiver becomes the liquidator of a company, whether provisionally or otherwise, he may, if satisfied that the nature of the estate or business of the company, or the interests of the creditors or contributories generally, require the appointment of a special manager of the estate or business of the company other than himself, apply to the court, and the court may on such application, appoint a special manager of the said estate or business to act during such time as the court may direct, with such powers, including any of the powers of a receiver or manager, as may be entrusted to him by the court. (2) The special manager shall give such security and accoun in such manner as the Board of Trade direct. (3) The special manager shall receive such remuneration as rn be fixed by the court. 210. The court may fix a time or times within which creditors are to prove their debts or claims, or to be excluded from the benefit of any distribution made before those debts are proved. 211. The court shall adjust the rights of the contributories among themselves, and distribute any surplus among the persons entitled thereto. Appointment in England of special manager. Power to exclude creditors not proving in time. Adjustment of rights of contnbutories. 212. The court may, at any time after making a winding-up Inspection of order, make such order for inspection of the books and papers of the books by and company by creditors and contributories as the court thinks just, and contributories. any books and papers in the possession of the company may be inspected by creditors or contributories accordingly, but not further or otherwise. 213. The court may, in the event of the assets being insufficient Power to order to satisfy the liabilities, make an order as to the payment out of the eh ug, assets of the costs, charges, and expenses incurred in the winding up of assets. in such order of priority as the court thinks just 670 SECRETARIAL PRACTICE a 214.—(1) The court may, at any time after the appointment ot a pected of having provisional liquidator or the making of a winding-up order, summon Ww ha before it any officer of the company or person known or suspected to have in his possession any property of the company or supposed to be indebted to the company, or any person whom the court deems capable of giving information concerning the promotion, formation. trade, dealings, affairs, or property of the company. (2) The court may examine him on oath concerning the matters aforesaid, either by word of mouth or on written interrogatories, and may reduce his answers to writing and require him to sign them. (3) The court may require him to produce any books and papers in his custody or power relating to the company, but, where he claims any lien on books or papers produced by him, the production shall be without prejudice to that lien, and the court shall have jurisdiction in the winding up to determine all questions relating to that lien. E" (4) If any person so summoned, after being tendered a reasonable sum for his expenses, refuses to come before the court at the time appointed, not having a lawful impediment (made known to the court at the time of its sitting, and allowed by it), the court may cause him to be apprehended and brought before the court for examination. Attendarice of 215. In the winding up by the court of a company registered in Sia of com- Scotland, the court shall have power to require the attendance of ings of creditors, any director or other officer of the company at any meeting of &c.. in Scotland. creditors or of contributories or of a committee of inspection for the purpose of giving information as to the trade. dealings, affairs or property of the company. Power in Eng- 216.—(1) Where an order has been made in England for winding ie order ap a company by the court, and the official receiver has made a tion of promo- further report under this Act stating that in his opinion a fraud has bs; directors, been committed by any person in the promotion or formation of the company, or by any director or other officer of the company in relation to the company since its formation, the court may, after consideration of the report, direct that that person, director or officer shall attend before the court on a day appointed by the court for that purpose, and be publicly examined as to the promotion or formation or the conduct of the business of the company, or as to his conduct and dealings as director or officer thereof. (2) The official receiver shall take part in the examination, and for that purpose may, if specially authorised by the Board of Trade in that behalf, employ a solicitor with or without counsel. (3) The liquidator, where the official receiver is not the liquidator, and any creditor or contributory, may also take part in the examination either personally or by solicitor or counsel. (4) The court may put such questions to the person examined as the court thinks fit. COMPANIES ACT, 1929 671 (5) The person examined shall be examined on oath, and shall answer all such questions as the court may put or allow to be put to him. (6) A person ordered to be examined under this section shall at his own cost, before his examination, be furnished with a copy of the official receiver’s report, and may at his own cost employ a solicitor with or without counsel, who shall be at liberty to put to him such questions as the court may deem just for the purpose of enabling him to explain or qualify any answers given by him: Provided that, if any such person applies to the court to be exculpated from any charges made or suggested against him, it shall be the duty of the official receiver to appear on the hearing of the application and call the attention of the court to any matters which appear to the official receiver to be relevant, and if the court, after hearing any evidence given or witnesses called by the official receiver, grants the application, the court may allow the applicant such costs as in its discretion it may think fit. (7) Notes of the examination shall be taken down in writing, and shall be read over to or by, and signed by, the person examined, and may thereafter be used in evidence against him, and shall be open to the inspection of any creditor or contributory at all reasonable times. (8) The court may, if it thinks fit, adjourn the examination from time to time. (9) An examination under this section may, if the court so directs, and subject to general rules, be held before any judge of county courts, or before any officer of the Supreme Court, being an official referee, master, or registrar in bankruptcy, or before any district registrar of the High Court named for the purpose by the Lord Chancellor, or, in the case of companies being wound up by a Palatine Court, before a registrar of that court, and the powers of the court under this section may be exercised by the person before whom the examination is held. 217.—(1) Where an order has been made in England for winding Power in Engup a company by the court, and the official receiver has made a strain further report under this Act stating that, in his opinion, a fraud has sons from been committed by a person in the promotion or formation of the Jile&te company, or by any director or other officer of the company in relation to the company since its formation, the court may, on the application of the official receiver, order that that person, director or officer shall not, without the leave of the court, be a director of or in any way, whether directly or indirectly, be concerned in or take part in the management of a company for such period, not exceeding five years, from the date of the report as may be specified in the order. (2) The official receiver shall, where he intends to make an application under the last foregoing subsection, give not less than ten days’ notice of his intention to the person charged with the fraud, and on the hearing of the application that person may appear and himself give evidence or call witnesses. 672 SECRETARIAL PRACTICE (3) It shall be the duty of the official receiver to appear on the hearing of an application by him for an order under this section and on an application for leave under this section and to call the attention of the court to any matters which appear to him to be relevant, and on any such application the official receiver mav himself give evidence or call witnesses. (4) If any person acts in contravention of an order made under this section, he shall, in respect of each offence, be liable on conviction on indictment to imprisonment for a term not exceeding two years, Or on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding five hundred pounds. or to both such imprisonment and fine. (5) The provisions of this section shall have effect notwithstanding that the person concerned may be criminally liable in respect of the matters on the ground of which the order is to be made. Power to arrest absconding contributorv. Powers of court cumulative. Delegation to liquidator of certain powers of court in England. 218. The court at any time either before or after making a windingup order, on proof of probable cause for believing that a contributory is about to quit the United Kingdom, or otherwise to abscond, or to remove or conceal any of his property for the purpose of evading payment of calls, or of avoiding examination respecting the affairs of the company, may cause the contributory to be arrested, and his books and papers and moveable personal property to be seized, and him and them to be safely kept until such time as the court may order 219. Any powers by this Act conferred on the court shall be in addition to and not in restriction of any existing powers of instituting proceedings against any contributory or debtor of the company, or the estate of any contributory or debtor, for the recovery of any call nr other sums. 220. Provision may be made by general rules for enabling or requiring all or any of the powers and duties conferred and imposed on the court in England bv this Act in respect of the following matters— (1) the holding and conducting of meeting to ascertain the wishes of creditors and contributories; . (2) the settling of lists of contributories and the rectifying of the register of members where required. and the collecting and applying of the assets: (3) the paying, delivery, conveyance, surrender or transfer of money, property, books or papers to the liquidator: (4) the making of calls; (5) the fixing of a time within which debts and claims must be proved; to be exercised or performed by the liquidator as an officer of the court, and subject to the control of the court: COMPANIES ACT, 1929 67: Provided that the liquidator shall not, without the special leave of the court, rectify the register of members, and shall not make any call without either the special leave of the court or the sanction of the committee of inspection. 221.—(x) When the affairs of a company have been completely wound up, the court shall make an order that the company be dissolved from the date of the order, and the company shall be dissolved accordingly. (2) The order shall within fourteen days from the date thereof be reported by the liquidator to the registrar of companies who shall make in his books a minute of the dissolution of the company. (3) If the liquidator makes default in complying with the requirements of this section, he shall be liable to a fine not exceeding five pounds for every day during which he is in default. Enforcement of and Appeal from Orders. 222.—(x) Where an order, interlocutor, or decree has been made in Scotland for winding up a company by the court, it shall be competent to the court, on production by the liquidators of a list certified by them of the names of the contributories liable in payment of any calls, and of the amount due by each contributory, and of the date when the said amount became due, to pronounce forthwith a decree against those contributories for payment of the sums so certified to be due, with interest from the said date till payment, at the rate of five per cent. per annum in the same way and to the same effect as if they had severally consented to registration for execution, on a charge of six days, of a legal obligation to pay those calls and interest. (2) Any such decree may be extracted immediately, and nc suspension thereof shall be competent, except on caution or con signation, unless with special leave of the court. 223.~(1) Any order made by the court in England for or in the course of winding up a company shall be enforced in Scotland and Northern Ireland in the courts that would respectively have jurisdiction in respect of that company if registered in Scotland or Northern Ireland and in the same manner in all respects as if the order had been made by those courts. (2) In like manner orders, interlocutors, and decrees made by the court in Scotland for or in the course of winding up a company shall be enforced in England and Northern Ireland by the courts which would respectively have jurisdiction in respect of that company if registered in that part of the United Kingdom where the order is required to be enforced, and in the same manner in all respects as if the order had been made by those courts. (3) Where any order, interlocutor, or decree made by one court is required to be enforced by another court, an office copy of the order, interlocutor, or decree shall be produced to the proper officer of the court required to enforce the same, and the production Dissolution of company. Order for calls on contributories in Scotland. Enforcement throughout United King-Jom of orders made in winding 1p. Appeals from orders in Scot« land. Circumstances in which company may be wound ap voluntarily. 674 SECRETARIAL PRACTICE of an office copy shall be sufficient evidence of the order, interlocutor, or decree, and thereupon the last-mentioned court shall take the requisite steps in the matter for enforcing the order, interlocutor, or decree, in the same manner as if it had been made by that court. 224.—(1) Subject to the provisions of this section and to rules of court, an appeal from any order or decision made or given in the winding up of a company by the court in Scotland under this Act shall lie in the same manner and subject to the same conditions as an appeal from any order or decision of the court in cases within its ordinary jurisdiction. (2) In regard to orders or judgments pronounced in Scotland by the Lord Ordinary on the Bills in vacation— (a) no order or judgment under the provisions of this Act specified in the First Part of the Eighth Schedule to this Act shall be subject to review, reduction, suspension, or stay of execution; and every other order or judgment (except as hereinafter mentioned) shall be subject to review only by reclaiming note, in common form, presented within fourteen days from the date of the order or judgment: Provided that orders or judgments under the provisions of this Act specified in the Second Part of the Eighth Schedule to this Act shall, from the dates of those orders or judgments, and notwithstanding any reclaiming note against them, be carried out and receive effect until the reclaiming note is disposed of by the court. (3) In regard to orders or judgments pronounced in Scotland by a permanent Lord Ordinary to whom a winding up has been remitted, any such order or judgment shall be subject to review only by reclaiming note in common form, presented within fourteen days from the date of the order or judgment, but should a reclaiming note not be presented and moved during session, the provisions of this section in regard to orders or judgments pronounced, by the Lord Ordinary on the bills in vacation shall apply to the order or judgment. (4) Nothing in this section shall affect the provisions of this Act in reference to decrees in Scotland for payment of calls in the winding up of companies, whether voluntarily or by or subiect te the supervision of the court. (ili) VoLuNTARY WINDING UP. Resolutions for, and commencement of Voluntary Winding Up 225.—(1) A company may be wound up voluntarily— (a) When the period, if any, fixed for the duration of the company by the articles expires, or the event, if any, occurs, on the occurrence of which the articles provide that the company is to be dissolved, and the company in general meeting has passed a resolution requiring the company to be wound up voluntarily: COMPANIES ACT, 1929 675 If the company resolves by special resolution that the company be wound up voluntarily: If the company resolves by extraordinary resolution to the effect that it cannot by reason of its liabilities continue its business, and that it is advisable to wind up. (2) In this Act the expression ‘‘a resolution for voluntary winding up’’ means a resolution passed under any of the provisions of subsection (1) of this section. 9) 226.—(1) When a company has passed a resolution for voluntary winding up, it shall, within seven days after the passing of the resolution, give notice of the resolution by advertisement in the Gazette. Notice of resoution to wind up voluntarily (2) If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a default fine, and for the purposes of this subsection the liquidator of the company shall be deemed to be an officer of *t company. 227. A voluntary winding up shall be deemed to commence at Commencement the time of the passing of the resolution for voluntary winding up. A unr Consequences of Voluntary Winding Up. 228. In case of a voluntary winding up, the company shall, from the commencement of the winding up, cease to carry on its business, except so far as may be required for the beneficial winding up thereof: Provided that the corporate state and corporate powers of the company shall, notwithstanding anything to the contrary in its articles, continue until it is dissolved. 229. Any transfer of shares, not being a transfer made to or with the sanction of the liquidator, and any alteration in the status of the members of the company, made after the copmencement of a voluntary winding up, shall be void. Effect of volunary winding up on business and status of company. Avoidance of transfers, &c., after commencement of voluntary winding up Declaration of Solvency. 230.—(1) Where it is proposed to wind up a company voluntarily, Statutory dethe directors of the company or, in the case of a company having Haren 3 sl more than two directors, the majority of the directors may, at a proposal to meeting of the directors held before the date on which the notices of pity the meeting at which the resolution for the winding up of the com- ’ pany is to be proposed are sent out, make a statutory declaration to the effect that they have made a full inquiry into the affairs of the company, and that, having so done, they have formed the opinion that the company will be able to pay its debts in full within a period, not exceeding twelve months, from the commencement of the winding un 676 SECRETARIAL PRACTICE IQ (2) A declaration made as aforesaid shall have no effect for the purposes of this Act unless it is delivered to the registrar of companies for registration before the date mentioned in subsection (1) of this section. (3) A winding up in the case of which a declaration has been made and delivered in accordance with this section is in this Act referred to as “a members’ voluntary winding up,” and a winding up in the case of which a declaration has not been made and delivered as aforesaid is in this Act referred to as ‘““a creditors’ voluntary winding up.”’ Provisions applicable to a Members’ Voluntary Winding Up. Provisions ap- 231. The provisions contained in the five sections of this Act plissils tom next following shall apply in relation to a members’ voluntary winding up. winding up. Power of com- 232.—(1) The company in general meeting shall appoint one or Pao Point more liquidators for the purpose of winding up the affairs and ation of distributing the assets of the company. and may fix the remuneration Hiouidatars, to be paid to him or them. (2) On the appointment of a liquidator all the powers of the directors shall cease, except so far as the company in general meeting, or the liquidator, sanctions the continuance thereof. Power to fill vacancy in office of Fr liquidator. 233.—(1) If a vacancy occurs by death, resignation, or otherwise in the office of liquidator appointed by the company, the company in general meeting may, subject to anv arrangement with its creditors. fill the vacancy. (2) For that purpose a general meeting may be convened by any contributory or, if there were more liquidators than one, by the continuing liquidators. (3) The meeting shall be held in manner provided by this Act or by the articles, or in such manner as may, on application by any contributory or by the continuing liquidators. be determined bv the court. Dower of 0 234.—(1) Where a company is proposed to be, or is in course of os shares, j P€ing, wound up altogether voluntarily, and the whole or part of &c., as consider- its business or property is proposed to be transferred or sold to or sale of another company, whether a company within the meaning of this company. Act or not (in this section called ‘‘the transferee company’’) the liquidator of the first-mentioned company (in this section called ** the transferor company’) may, with the sanction of a special resolution of that company, conferring either a general authority on the liquidator or an authority in respect of any particular arrangement, receive in compensation or part compensation for the transfer or sale, shares, policies, or other like interests in the transferee company, for distribution among the members of the transferor company, or may enter into any other arrangement whereby the members COMPANIES ACT, 1929 67 of the transferor company may, in lieu of receiving cash, shares, policies, or other like interests, or in addition thereto, participate in the profits of or receive any other benefit from the transferee company. (2) Any sale or arrangement in pursuance of this section shall be binding on the members of the transferor company. (3) If any member of the transferor company who did not vote in favour of the special resolution expresses his dissent therefrom in writing addressed to the liquidator, and left at the registered office of the company within seven days after the passing of the resolution, he may require the liquidator either to abstain from carrying the resolution into effect, or to purchase his interest at a price to be determined by agreement or by arbitration in manner provided by this section. (4) If the liquidator elects to purchase the member's interest, the purchase money must be paid before the company is dissolved, and be raised by the liquidator in such manner as may be determined by special resolution. (5) A special resolution shall not be invalid for the purposes of this section by reason that it is passed before or concurrently with a resolution for voluntary winding up or for appointing liquidators, but, if an order is made within a year for winding up the company by or subject to the supervision of the court, the special resolution shall not be valid unless sanctioned by the court. (6) For the purposes of an arbitration under this section, the provisions of the Companies Clauses Consolidation Act, 1845, or, in the case of a winding-up in Scotland, the Companies Clauses Consolidation (Scotland) Act, 1845, with respect to the settlement of 8 & 9 Vict. c. 17. disputes by arbitration, shall be incorporated with this Act, and in the construction of those provisions this Act shall be deemed to be the special Act, and ‘“‘the company’ shall mean the transferor company, and any appointment by the said incorporated provisions directed to be made under the hand of the secretary, or any two of the directors, may be made under the hand of the liquidator, or, if there is more than one liquidator, then of any two or more of the liquidators. 8 & 9 Vict. c. 16. 235.—(1) In the event of the winding up continuing for more Duty of liquithan one year, the liquidator shall summon a general meeting of the Sg company at the end of the first year from the commencement of the at end of each winding up, and of each succeeding year, or as soon thereafter as Ye" may be convenient, and shall lay before the meeting an account of his acts and dealings and of the conduct of the winding up durine the preceding year. (2) If the liquidator fails to comply with this section, he s.. be liable to a fine not exceeding ten pounds. 236.—(1) As soon as the affairs of the company are fully wound up, the liquidator shall make up an account of the winding up, showing how the winding up has been conducted and the property Final meeting and dissolution. 678 | SECRETARIAL PRACTICE of the company has been disposed of, and thereupon shall call a general meeting of the company for the purpose of laying before it the account, and giving any explanation thereof. (2) The meeting shall be called by advertisement in the Gazette, specifying the time, place, and object thereof, and published one month at least before the meeting. (3) Within one week after the meeting, the liquidator shall send to the registrar of companies a copy of the account, and shall make a return to him of the holding of the meeting and of its date, and if the copy is not sent or the return is not made in accordance with this subsection the liquidator shall be liable to a fine not exceeding five pounds for every dav during which the default continues: Provided that, if a quorum is not present at the meeting, the liquidator shall, in lieu of the return hereinbefore mentioned, make a return that the meeting was duly summoned and that no quorum was present thereat, and upon such a return being made the provisions of this subsection as to the making of the return shall be deemed to have been complied with. 1 (4) The registrar on receiving the account and either of the returns hereinbefore mentioned shall forthwith register them, and on the expiration of three months from the registration of the return the company shall be deemed to be dissolved: Provided that the court may, on the application of the liquidator or of any other person who appears to the court to be interested, make an order deferring the date at which the dissolution of the company is to take effect for such time as the court thinks fit. (5) It shall be the duty of the person on whose application an order of the court under this section is made, within seven days after the making of the order, to deliver to the registrar an office copy of the order for registration, and if that person fails so to do he shall be liable to a fine not exceeding five pounds for every dav during which the default continues. Provisions applicable to a Creditors’ Voluntary Winding Up. Provisions ap- 237. The provisions contained in the eight sections of this Act lla 8 next following shall apply in relation to a creditors’ voluntary ing up. winding up. Meeting of 238.—(1) The company shall cause a meeting of the creditors Creditors, of the company to be summoned for the day, or the day next following the day, on which there is to be held the meeting at which the resolution for voluntary winding up is to be proposed, and shall cause the notices of the said meeting of creditors to be sent by post to the creditors simultaneously with the sending of the notices of the said meeting of the company. (2) The company shall cause notice of the meeting of the creditors to be advertised once in the Gazette and once at least in two local newspapers circulating in the district where the registered office or principal place of business of the companv is situate. COMPANIES ACT, 1929 579 (3) The directors of the company shall— (a) cause a full statement of the position of the company’s affairs together with a list of the creditors of the company and the estimated amount of their claims to be laid before the meeting of creditors to be held as aforesaid; and (b) appoint one of their number to preside at the said meeting. (4) It shall be the duty of the director appointed to preside at the meeting of creditors to attend the meeting and preside thereat. {5) If the meeting of the company at which the resolution for voluntary winding up is to be proposed is adjourned and the resolution is passed at an adjourned meeting, any resolution passed at the meeting of the creditors held in pursuance of subsection (1) of this section shall have effect as if it had been passed immediately after the passing of the resolution for winding up- the company. (6) If default is made— {a) by the company in complying with subsections (1) and (2) of this section; by the directors of the company in complying with subsection (3) of this section; by any director of the company in complying with subsection (4) of this section; the company, directors or director, as the case may be, shall be liable to a fine not exceeding one hundred pounds, and, in the case of default by the company, every officer of the company who is in default shall be liable to the like penalty. ) 239. The creditors and the company at their respective meetings mentioned in the last foregoing section of this Act may nominate a person to be liquidator for the purpose of winding up the affairs and distributing the assets of the company, and if the creditors and the company nominate different persons, the person nominated by the creditors shall be liquidator, and if no person is nominated by the creditors the person, if any, nominated by the company shall’ be liquidator: Provided that in the case of different persons being nominated any director, member, or creditor of the company may, within seven days after the date on which the nomination was made by the creditors, apply to the court for an order either directing that the person nominated as liquidator by the company shall be liquidator instead of or jointly with the person nominated by the creditors, or appointing some other person to be liquidator instead of the person appointed by the creditors. 240.—(1) The creditors at the meeting to be held in pursuance of section two hundred and thirty-eight of this Act or at any subsequent meeting, may, if they think fit, appoint a committee of inspection consisting of not more than five persons, and if such a committee is appointed the company may, either at the meeting Appointment of liquidator. Appointment of committee of inspection. 680 SECRETARIAL PRACTICE at which the resolution for voluntary winding up is passed or at any time subsequently in general meeting, appoint such number of persons as they think fit to act as members of the committee not exceeding five in number: Provided that the creditors may, if they think fit, resolve that all or any of the persons so appointed by the company ought not to be members of the committee of inspection, and, if the creditors so resolve, the persons mentioned in the resolution shall not, unless the court otherwise directs, be qualified to act as members of the committee, and on any application to the court under this provision the court may, if it thinks fit, appoint other persons to act as such members in place of the persons mentioned in the resolution. (2) Subject to the provisions of this section and to general rules, the provisions of sections one hundred and ninety-nine (except subsection (1) ) and two hundred and one of this Act shall apply with respect to a committee of inspection appointed under this section as they apply with respect to a committee of inspection appointed in a winding up by the court. Fixing of liquidators’ remuneration and cesser of directors’ powers. 241.—(x) The committee of inspection, or if there is no such committee, the creditors, may fix the remuneration to be paid to the liquidator or liquidators. (2) On the appointment of a liquidator, all the powers of the directors shall cease, except so far as the committee of inspection, or if there is no such committee, the creditors. sanction the continuance thereof Power to fill 242. If a vacancy occurs, by death, resignation or otherwise, in amo the office of a liquidator, other than a liquidator appointed by, or by the direction of, the court. the creditors may fill the vacancy. 243. The provisions of section two hundred and thirty-four of this Act shall apply in the case of a creditors’ voluntary winding up as in the case of a members’ voluntary winding up, with the modification that the powers of the liquidator under the said section shall not be exercised except with the sanction either of the court or of the committee of inspection. Duty of 244—(1) In the event of the winding up continuing for more a than one year, the liquidator shall summon a general meeting of the of company and company and a meeting of creditors at the end of the first year of guagiiiars at . from the commencement of the winding up, and of each succeeding year, or as soon thereafter as may be convenient, and shall lay before the meetings an account of his acts and dealings and of the conduct of the winding up during the preceding year. (2) If the liquidator fails to comply with this section, he shall be liable to a fine not exceeding ten pounds. Final meeting 245.—(1) As soon as the affairs of the company are fully wound and dissolution. yp the liquidator shall make up an account of the winding up, showing how the winding up has been conducted and the property of the companv has been disposed of. and thereupon shall call a COMPANIES ACT, 1029 ART general meeting of the company and a meeting of the creditors, for the purpose of laying the account before the meetings, and giving any explanation thereof. (2) Each such meeting shall be called by advertisement in the Gazette, specifying the time, place, and object thereof, and published one month at least before the meeting. (3) Within one week after the date of the meetings, or, if the meetings are not held on the same date, after the date of the later meeting, the liquidator shall send to the registrar of companies a copy of the account, and shall make a return to him of the holding of the meetings and of their dates, and if the copy is not sent or the return is not made in accordance with this subsection the liquidator shall be liable to a fine not exceeding five pounds for every day during which the default continues: Provided that, if a quorum is not present at either such meeting, the liquidator shall, in lieu of the return hereinbefore mentioned, make a return that the meeting was duly summoned and that no quorum was present thereat, and upon such a return being made the provisions of this subsection as to the making of the return shall, in respect of that meeting, be deemed to have been complied with. (4) The registrar on receiving the account and in respect of each such meeting either of the returns hereinbefore mentioned shall forthwith register them, and on the expiration of three months from the registration thereof the company shall be deemed to be dissolved: Provided that the court may, on the application of the liquidator or of any other person who appears to the court to be interested, make an order deferring the date at which the dissolution of the company is to take effect for such time as the court thinks fit. (5) It shall be the duty of the person on whose application an order of the court under this section is made, within seven days after the making of the order, to deliver to the registrar an office copy of the order for registration, and if that person fails so to do he shall be liable to a fine not exceeding five pounds for every day during which the default continues. Provisions applicable to every Voluntary Winding Up. 246. The provisions contained in the nine sections of this Act next following shall apply to every voluntary winding up whether a members’ or a creditors’ winding up 247. Subject to the provisions of this Act as to preferential payments, the property of a company shall, on its winding up, be applied in satisfaction of its liabilities pari passu, and, subject to such application, shall, unless the articles otherwise provide, be distributed among the members according to their rights and interests in the companv Jrovisions apslicable to every voluntary windng up Distribution of property of company. 682 SECRETARIAL PRACTICE Powers and 248.— (1) The liquidator may— es of qui: (2) in the case of a members’ voluntary winding up, with the tary winding up. sanction of an extraordinary resolution of the company, and, in the case of a creditors’ voluntary winding up, with .the sanction of either the court or the committee of inspection, exercise any of the powers given by paragraphs (d), (¢) and (f) of subsection (1) of section one hundred and ninety-one of this Act to a liquidator in a winding up by the court: without sanction, exercise any of the other powers by this Act given to the liquidator in a winding up by the court: exercise the power of the court under this Act of settling a list of contributories, and the list of contributories shall be prima facie evidence of the liability of the persons named therein to be contributories: exercise the power of the court of making calls: summon general meetings of the company for the purpose of obtaining the sanction of the company by special or extraordinary resolution or for anv other purpose he may think fit. (2) The liquidator shall pay the debts of the company and shall adjust the rights of the contributories among themselves. (3) When several liquidators are appointed, any power given by this Act may be exercised by such one or more of them as may be determined at the time of their appointment, or, in default of such determination, by any number not less than two. Powerofcourtto 249.—(1) If from any cause whatever there is no liquidator acting, et dam: the court may appoint a liquidator. I vSlumiary (2) The court may, on cause shown, remove a liquidator and appoint another liquidator. Noticeby ~~ 250.—(1) The liquidator shall, within twenty-one days after his Pyuidater kis appointment, deliver to the registrar of companies for registration a notice of his appointment in the form prescribed bv the Board of Trade (¢) (2) If the liquidator fails to comply with the requirements of this section he shall be liable to a fine not exceeding five pounds for every day during which the default continues. Arrangement 251.—(1) Any arrangement entered into between a company Wien binding on about to be, or in the course of being, wound up and its creditors : shall, subject to the right of appeal under this section, be binding on the company if sanctioned by an extraordinary resolution, and on the creditors if acceded to by three-fourths in number and value of the creditors. (2) Any creditor or contributory may, within three weeks from the completion of the arrangement, appeal to the court against it, and the court may thereupon, as it thinks just, amend, vary, or confirm the arrangement. COMPANIES ACT, 1029 682 252.—(1) The liquidator or any contributory or creditor may apply to the court to determine any question arising in the winding up of a company, or to exercise, as respects the enforcing of calls, or any other matter, all or any of the powers which the court might exercise if the company were being wound up by the court. (2) The court, if satisfied that the determination of the question or the required exercise of power will be just and beneficial, may accede wholly or partially to the application on such terms and conditions as it thinks fit, or may make such other order on the application as it thinks just. 253.—(1) If the court, on the application of the liquidator in the winding up of a company registered in Scotland, so directs, no action or proceeding shall be proceeded with or commenced against the company except by leave of the court, and subject to such terms as the court may impose. (2) Nothing in this section shall be taken to affect the practice or powers of the court as existing immediately before the commencement of this Act with respect to the staying of proceedings against a company registered in England and in course of being wound up 254. All costs, charges, and expenses properly incurred in the winding up, including the remuneration of the liquidator, shall be payable out of the assets of the company in priority to all other claims. 255. The winding up of a company shall not bar the right of any creditor or contributory to have it wound up by the court, but in the case of an application by a contributory, the court must be satisfied that the rights of the contributories will be prejudiced by a voluntary winding up. Power to apply to court to have questions determined or powers exercised. dower of court n Scotland to “tay proceedings 1gainst com-Jany. Costs of voluntary winding up. Saving for rights of creditors and contributories. (ivy) WinDING Up SUBJECT TO SUPERVISION OF COURT. 256. When a company has passed a resolution for voluntary Power to order winding up, the court may make an order that the voluntary winding Jpeg? up shall continue but subject to such supervision of the court, supervision. and with such liberty for creditors, contributories, or others tr apply to the court, and generally on such terms and conditions, a the court thinks just. 257. A petition for the continuance of a voluntary winding up Effect of petition subject to the supervision of the court shall, for the purpose of nin Bp giving jurisdiction to the court over actions, be deemed to be a supervision. petition for winding up by the court. 258. A winding up subject to the supervision of the court shall, Application of for the purposes of sections one hundred and seventy-three and one $5; 17330d 174 to hundred and seventy-four of this Act, be deemed to be a winding Diet or up by the court. supervision. 684 SECRETARIAL PRACTICE Power of court 259.__(1) Where an order is made for a winding up subject to io app mt or supervision, the court may by that or anv subsequent order appoint liquidators. an additional liquidator. (2) A liquidator appointed by the court under this section shall have the same powers, be subject to the same obligations, and in all respects stand in the same position, as if he had been duly appointed in accordance with the provisions of this Act with respect to the appointment of liquidators in a voluntary winding up. (3) The court may remove any liquidator so appointed by the court or any liquidator continued under the supervision order and fill any vacancy occasioned by the removal, or by death or resignation. Effect of supervision order. 260.—(1) Where an order is made for a winding up subject tc supervision, the liquidator may, subject to any restrictions imposed by the court, exercise all his powers, without the sanction or intervention of the court, in the same manner as if the companv were being wound up altogether voluntarily: Provided that the powers specified in paragraphs (d), (e¢) and (f) of subsection (1) of section one hundred and ninety-one of this Act shall not be exercised by the liquidator except with the sanction of the court or, in a case where before the order the winding up was a creditor’s voluntary winding up, with the sanction of either the court or the committee of inspection. (2) A winding up subject to the supervision of the court is not a winding up by the court for the purpose of the provisions of this Act which are set out in the Ninth Schedule to this Act, but, subject as aforesaid, an order for a winding up subject to supervision shall for all purposes be deemed to be an order for winding up by the court: Provided that where the order for winding up subject to supervision was made in relation to a creditor’s voluntary winding up in which a committee of inspection had been appointed, the order shall be deemed to be an order for winding up by the court for the purpose of section one hundred and ninety-nine (except subsection (1) thereof) and section two hundred and one of this Act, except in so far as the operation of those sections is excluded in a voluntary winding up bv general rules. (v) PROVISIONS APPLICABLE TO EVERY MODE oF WINDING UP. Proof and Ranking of Claims. Debts of all descriptions to be proved. 261. In every winding up (subject in the case of insolvent companies to the application in accordance with the provisions of this Act of the law of bankruptcy) all debts payable on a contingency, and all claims against the company, present or future, certain or contingent, ascertained or sounding only in damages, shall be admissible to proof against the company, a just estimate being made, so far as possible, of the value of such debts or claims as may be subject to any contingency or sound only in damages, .or for some other reason do not bear a certain value. COMPANIES ACT, 192¢ 683 262. In the winding up of an insolvent company registered in England the same rules shall prevail and be observed with regard to the respective rights of secured and unsecured creditors and to debts provable and to the valuation of annuities and future and contingent liabilities as are in force for the time being under the law of bankruptcy in England with respect to the estates of persons adjudged bankrupt, and all persons who in any such case would be entitled to prove for and receive dividends out of the assets of the company may come in under the winding up, and make such claims against the company as they respectively are entitled to by virtue of this section. 263. In the winding up of a company registered in Scotland, the Ranking of following provisions of the Bankruptcy (Scotland) Act, 1913, that Saums in is to say, 3 & 4 Geo. 5 (a) the provisions of sections forty-five to sixty-two regarding “*> voting and ranking for payment of dividends; sections ninety-six and one hundred and five, which respectively relate to the reckoning of majorities and {0 the interruption of prescription; shall so far as is consistent with this Act apply in like manner as they apply in the sequestration of a bankrupt’s estate, with the substitution of references to winding up for references to sequestration, of references to the court for references to the sheriff, of references to the liquidator for references to the trustee, and of references to the company for references to the bankrupt, and with any other necessary modifications. 264.—(1) In a winding up there shall be paid in priority to all other debts— (a) All parochial or other local rates due from the company at the relevant date, and having become due and payable within twelve months next before that date, and all assessed taxes, land tax, property or income tax assessed on the company up to the fifth day of April next before that date, and not exceeding in the whole one year’s assessment; All wages or salary (whether or not earned wholly or in part by way of commission) of any clerk or servant in respect of services rendered to the company during four months next before the relevant date, not exceeding fifty pounds; All wages of any workman or labourer not exceeding twenty-five pounds, whether payable for time or for piece work, in respect of services rendered to the company during two months next before the relevant date: Provided that, where any labourer in husbandry has entered into a contract for the payment of a portion of his wages in a lump sum at the end of the year of hiring, he shall have priority in respect of the whole of such sum, or a part thereof, as the court may decide to be due under the contract, proportionate to the time of service up to the relevant date: Application of bankruptcy rules n winding up of nsolvent English comsanies. yp 15 & 16 Geo. 5. c. 84. 686 SECRETARIAL PRACTICE (d) Unless the company is being wound up voluntarily merely for the purposes of reconstruction or of amalgamation with another company, or unless the company has at the commencement of the winding up under such a contract with insurer’s as is mentioned in section seven of the Workmen's Compensation Act, 1925, rights capable of being transferred to and vested in the workman, all amounts due in respect of any compensation or liability for compensation under the said Act accrued before the relevant date ; Unless the company is being wound up voluntarily merely for the purposes of reconstruction or of amalgamation with another company all amounts due in respect of contributions payable during the twelve months next before the relevant date by the company as the emplover of any persons under either— (i) the National Health Insurance Acts, 1924 to 1028: z or 15 & 16 Geo. 5. c. 70. : (ii) the Widows’, Orphans’ and Old Age Contributory Pensions Act, 1925; or (iii) the Unemployment Insurance Acts, 1920 to 1929. (2) Where any compensation under the Workmen's Compensation Act, 1925, is a weekly payment, the amount due in respect thereof shall, for the purposes of paragraph (d) of subsection (1) of this section, be taken to be the amount of the lump sum for which the weekly payment could, if redeemable, be redeemed if the employer made an application for that purpose under the said Act. (3) Where any payment on account of wages or salary has been made to any clerk, servant, workman or labourer in the employment of a company out of money advanced by some person for that purpose that person shall in‘a winding up have a right of priority in respect of the money so advanced and paid up to the amount by which the sum in respect of which that clerk, servant, workman or labourer would have been entitled to priority in the winding up has been diminished by reason of the payment having been made. (4) The foregoing debts shall— (2) Rank equally among themselves and be paid in full, unless the assets are insufficient to meet them, in which case they shall abate in equal proportions; and In the case of a company registered in England, so far as the assets of the company available for payment of general creditors are insufficient to meet them, have priority over the claims of holders of debentures under any floating charge created by the company, and be paid accordingly out of any propertv comprised in or subiect to that charge. (5) Subject to the retention of such sums as may be necessary for the costs and expenses of the winding up, the foregoing debts shall be discharged forthwith so far as the assets are sufficient to meet them and in the case of the debts to which priority is given by paragraph COMPANIES ACT, 1929 687 (¢) of subsection (1) of this section formal proof thereof shall not be required except in so far as is otherwise provided by general rules. (6) In the event of a landlord or other person distraining or having distrained on any goods or effects of the company within three months next before the date of a winding-up order, the debts to which priority is given by this section shall be a first charge on the goods or effects so distrained on, or the proceeds of the sale thereof : Provided that, in respect of any money paid under any such charge, the landlord or other person shall have the same rights of priority as the person to whom the payment is made. (7) In this section the expression “the relevant date” means— (a) in the case of a company ordered to be wound up compulsorily which had not previously commenced to be wound up voluntarily, the date of the winding-up order; and in any other case, the date of the commencement of the winding up. (b) Effect of Winding Up on antecedent and other Transactions. 265.—(1) Any conveyance, mortgage, delivery of goods, payment, execution, or other act relating to property which would, if made or done by or against an individual, be deemed in his bankruptcy a fraudulent preference, shall, if made or done by or against a company, be deemed, in the event of its being wound up, a fraudulent preference of its creditors, and be invalid accordingly. Fraudulent preference. (2) For the purposes of this section, the commencement of the winding up shall be deemed to correspond with the presentation of the bankruptcy petition in the case of an individual. (3) Any conveyance or assignment by a company of ail its property to trustees for the benefit of all its creditors shall be void to all intents. (4) In the application to Scotland of this section, the expression “fraudulent preference’ includes any alienation or preference which is voidable by statute or at common law on the ground insolvency or notour bankruptcy, and the expression ‘bankrm petition’ means petition for sequestration. 266. Where a company is being wound up, a floating charge on Egfiect of foating the undertaking or property of the company created within six charge. months of the commencement of the winding up shall, unless it is proved that the company immediately after the creation of the charge was solvent, be invalid, except to the amount of any cash paid to the company at the time of or subsequently to the creation of, and in consideration for, the charge, together with interest on that amount at the rate of five per cent. per annum. H&K SECRETARIAL PRACTICE Disclaimer of 267.—(1) Where any part of the property of a company which onerous property . . i y in case of com-~ 1S being wound up consists of land of any tenure burdened with og Mi up onerous covenants, of shares or stock in companies, of unprofitable ’ contracts, or of any other property that is unsaleable, or not readily saleable, by reason of its binding the possessor thereof to the performance of any onerous act, or to the payment of any sum of money, the liquidator of the company, notwithstanding that he has endeavoured to sell or has taken possession of the property, or exercised any act of ownership in relation thereto, may, with the leave of the court and subject to the provisions of this section, by writing signed by him, at any time within twelve months after the commencement of the winding up or such extended period as may be allowed bv the court, disclaim the property: Provided that, where any such property has not come to the knowledge of the liquidator within one month after the commencement of the winding up, the power under this section of disclaiming the property may be exercised at any time within twelve months after he has become aware thereof or such extended period as may be allowed by the court. (2) The disclaimer shall operate to determine, as from the date of disclaimer, the rights, interest, and liabilities of the company, and the property of the company, in or in respect of the property disclaimed, but shall not, except so far as is necessary for the purpose of releasing the company and the property of the company from liability, affect the rights or liabilities of any other person. (3) The court, before or on granting leave to disclaim, may require such notices to be given to persons interested, and impose such terms as a condition of granting leave, and make such other order in the matter as the court thinks just. (4) The liquidator shall not be entitled to disclaim any property under this section in any case where an application in writing has been made to him by any persons interested in the property requiring him to decide whether he will or will not disclaim, and the liquidator has not, within a period of twenty-eight days after the receipt of the application or such further period as may be allowed by the court, given notice to the applicant that he intends to apply to the court for leave to disclaim, and, in the case of a contract, if the liquidator, after such an application as aforesaid, does not within the said period or further period disclaim the contract. the companv shall be deemed to have adopted it. (5) The court may, on the application of any person who is, as against the liquidator, entitled to the benefit or subject to the burden of a contract made with the company, make an order rescinding the contract on such terms as to payment by or to either party of damages for the non-performance of the contract, or otherwise as the court thinks just, and any damages payable under the order to any such person may be proved by him as a debt in the winding up. (6) The court may, on an application by any person who either claims any interest in any disclaimed property or is under any liability not discharged by this Act in respect of anv disclaimed property and COMPANIES ACT, 1929 689 on hearing any such persons as it thinks fit, make an order for the vesting of the property in or the delivery of the property to any persons entitled thereto, or to whom it may seem just that the property should be delivered by way of compensation for such liability as aforesaid, or a trustee for him, and on such terms as the court thinks just, and on any such vesting order being made, the property comprised therein shall vest accordingly in the person therein named in that behalf without any conveyance or assignment for the purpose: Provided that, where the property disclaimed is of a leasehold nature, the court shall not make a vesting order in favour of any person claiming under the company, whether as under-lessee or as mortgagee by demise, including a chargee by way of legal mortgage, except upon the terms of making that person— (a) subject to the same liabilities and obligations as those to which the company was subject under the lease in respect of the preperty at the commencement of the winding-up; or if the court thinks fit, subject only to the same liabilities and obligations as if the lease had been assigned to that person at that date; and in either event (if the case so requires) as if the lease had comprised only the property comprised in the vesting order, and any mortgagee or under-lessee declining to accept a vesting order upon such terms shall be excluded from all interest in and security upon the property, and, if there is no person claiming under the company who is willing to accept an order upon such terms, the court shall have power to vest the estate and interest of the company in the property in any person liable either personally or in a representative character, and either alone or jointly with the company to perform the lessee’s covenants in the lease, freed and discharged from all estates, incumbrances and interests created therein by the company. (7) Any person injured by the operation of a disclaimer under this section shall be deemed to be a creditor of the company to the amount of the injury, and may accordingly prove the amount as a debt in the winding up. (8) This section shall not apply in the case of a winding up in Scotland. (b) 268.—(1) Where a creditor has issued execution against the goods or lands of a company or has attached any debt due to the company, and the company is subsequently wound up, he shall not be entitled to retain the benefit of the execution or attachment against the liquidator in the winding up of the company unless he has completed the execution for attachment against the liquidator in the winding up of the company unless he has completed the execution or attachment before the commencement of the winding up: Provided that— (a) where any creditor has had notice of a meeting having been called at which a resolution for voluntary windingup is to be proposed, the date on which the creditor so Restriction of rights of creditor 1s to execution or attachment in case of company being wound up in England. ( SECRETARIAL PRACTICE had notice shall for the purposes of the foregoing provision be substituted for the date of the commencement of the winding up; and a person who purchases in good faith under a sale by the sheriff any goods of a company on which an execution has been levied shall in all cases acquire a good title to them against the liquidator. (2) For the purposes of this section, an execution against goods shall be taken to be completed by seizure and sale, and an attachment of a debt shall be deemed to be completed by receipt of the debt, and an execution against land shall be deemed to be completed by seizure and, in the case of an equitable interest, by the appointment of a receiver (3) In this section the expression “goods” includes all chattels personal, and the expression ‘‘sheriff”’ includes any officer charged with the execution of a writ or other process. (4) This section shall not apply in the case of a winding up in Scotland. Duties of sheriff as to goods taken in execution. 269.—(1) Where any goods of a company are taken in execution, and, before the sale thereof or the completion of the execution by the receipt or recovery of the full amount of the levy, notice is served on the sheriff that a provisional liquidator has been appointed or that a winding-up order has been made or that a resolution for voluntary winding up has been passed, the sheriff shall, on being so required, deliver the goods and any money seized or received in past satisfaction of the execution to the liquidator, but the costs of the execution shall be a first charge on the goods or money so delivered, and the liquidator may sell the goods, or a sufficient part thereof, for the purpose of satisfying that charge. (2) Where under an execution in respect of a judgment for a sum exceeding twenty pounds the goods of a company are sold or money is paid in order to avoid sale, the sheriff shall deduct the costs of the execution from the proceeds of the sale or the money paid and retain the balance for fourteen days, and if within that time notice is served on him of a petition for the winding up of the company having been presented or of a meeting having been called at which there is to be proposed a resolution for the voluntary winding up of the company and an order is made or a resolution is passed, as the case may be, for the winding up of the company, the sheriff shall pay the balance to the liquidator, who shall be entitled to retain it as against the execution creditor. (3) In this section the expression “goods” includes all chattels personal, and the expression ‘‘sheriff”’ includes any officer charged with the execution of a writ or other process. (4) This section shall not apply in the case of a winding up in Scotland. COMPANIES ACT, 1925 HOT 270.—(1) In the winding up of a company registered in Scotland, the following provisions shall have effect :— (a) The winding up shall, as at the date of the commencement thereof, be equivalent to an arrestment in execution and decree of furthcoming, and to an executed or completed poinding, and no arrestment or poinding of the funds or effects of the company executed on or after the sixtieth day prior to that date shall be effectual, and those funds or effects or the proceeds of those effects if sold shall be made furthcoming to the liquidator: Provided that any arrester or poinder before that date, who is thus deprived of the benefit of his diligence shall have preference out of those funds or effects for the expense bona fide incurred by him in such diligence: 'b) The winding up shall, as at the date aforesaid, be equivalent to a decree of adjudication of the heritable estates of the company for payment of the whole debts of the company, principal and interest, accumulated at the said date, subject to such preferable heritable rights and securities as existed at the said date and are valid and unchallengeable, and the right to poind the ground hereinafter provided: C The provisions of sections one hundred and eight to one hundred and thirteen and of section one hundred and sixteen of the Bankruptcy (Scotland) Act, 1913, shall, so far as is consistent with this Act, apply to the realisation of heritable estates affected by such heritable rights and securities as aforesaid; and for the purposes of this Act the words ‘“‘sequestration” and ‘‘trustee’’ occurring in those sections shall mean respectively “winding up’ and “‘liquidator,” and the expression ‘“the Lord Ordinary or the court” shall mean ‘the court” as defined by this Act with respect to Scotland: (d) No poinding of the ground which has not been carried into execution by sale of the effects sixty days before the date aforesaid shall, except to the extent hereinafter provided, be available in any question with the liquidator: Provided that no creditor who holds a security over the heritable estate preferable to the right of the liquidator shall be prevented from executing a poinding of the ground after the date aforesaid, but that poinding shall in competition with the liquidator be available only for the interest on the debt for the current half-yearly term, and for the arrears of interest for one year immediately before the commencement of that term. Effect of diligence within 6o days of winding 1p in case of Scottish company, and in case Of effects in Scotand of English company. (2) The provisions of this section shall, so far as relates to any estate or effects of the company situate in Scotland, apply in the case of a company registered in England as it applies in the case of a company registered in Scotland, Offences by officers of companies in liquidation. HQ2 SECRETARIAL PRACTICE Offences antecedent to ov in course of Winding Up. 271.—(x) If any person, being a past or present director, manager or other officer of a company which at the time of the commission of the alleged offence is being wound up, whether by or under the supervision of the court or voluntarily, or is subsequently ordered to be wound up by the court or subsequently passes a resolution for voluntary winding up— (a) does not to the best of his knowledge and belief fully and truly discover to the liquidator all the property, real and personal, of the company, and how and to whom and for what consideration and when the company disposed of any part thereof, except such part as has been disposed of in the ordinary way of the business of the company; or does not deliver up to the liquidator, or as he directs, all such part of the real and personal property of the company as is in his custody or under his control, and which he is required by law to deliver up; or does not deliver up to the liquidator, or as he directs, all books and papers in his custody or under his control belonging to the company and which he is required bv law to deliver up; or within twelve months next before the commencement of the winding up or at any time thereafter conceals any part of the property of the company to the value of ten pounds or upwards, or conceals anv debt due to or from the company; or within twelve months next before the commencement of the winding up or at any time thereafter fraudulently removes any part of the property of the company to the value of ten pounds or upwards; or makes any material omission in any statement relating to the affairs of the company; or knowing or believing that a false debt has been proved by any person under the winding up, fails for the period of a month to inform the liquidator thereof: or after the commencement of the winding up prevents the production of any book or paper affecting or relating to the property or affairs of the company; or within twelve months next before the commencement of the winding up or at any time thereafter, conceals, destroys, mutilates, or falsifies, or is privy to the concealment, destruction, mutilation, or falsification of, any book or paper affecting or relating to the propertv or affairs of the company; or. within twelve months next before the commencement of the winding up or at any time thereafter makes or is privy to the making of any false entry in any book or paper affecting or relating to the property or affairs of the company: or COMPANIES ACT, 19z¢ 603 within twelve months next before the commencement of the winding up or at any time thereafter fraudulently parts with, alters, or makes any omission in, or is privy to the fraudulent parting with, altering, or making any omission in, any document affecting or relating to the property or affairs of the company; or after the commencement of the winding up or at any meeting of the creditors of the company within twelve months next before the commencement of the winding up attempts to account for any part of the property of the company by fictitious losses or expenses; or has within twelve months next before the commencement of the winding up or at any time thereafter, by any false representation or other fraud, obtained any property for or on behalf of the company on credit which the company does not subsequently pay for; or within twelve months next before the commencement of the winding up or at any time thereafter, under the false pretence that the company is carrying on its business, obtains on credit, for or on behalf of the company, any property which the company does not subsequently pay for; or within twelve months next before the commencement of the winding up or at any time thereafter pawns, pledges, or disposes of any property of the company which has been obtained on credit and has not been paid for, unless such pawning, pledging, or disposing is in the ordinary way of the business of the company; or is guilty of any false representation or other fraud for the purpose of obtaining the consent of the creditors of the company or any of them to an agreement with reference to the affairs of the company or to the winding up; he shall be guilty of a misdemeanour and shall, in the case of the offences mentioned respectively in paragraphs (m), (x) and (0) of this subsection, be liable on conviction on indictment to penal servitude for a term not exceeding five years, or on summary conviction to imprisonment for a term not exceeding twelve months, and in the case of any other offence shall be liable on conviction on indictment to imprisonment for a term not exceeding two years, or on summary conviction to imprisonment for a term not exceeding twelve months: Provided that it shall be a good defence to a charge under any of paragraphs (a), (b), (¢), (4), (f), (n) and (0), if the accused proves that he had no intent to defraud, and to a charge under any of paragraphs (%), (z) and (j), if he proves that he had no intent to conceal the state of affairs of the company or to defeat the law. (%) 0) (2) Where any person pawns, pledges or disposes of any property in circumstances which amount to a misdemeanour under paragraph (0) of subsection (1) of this section, every person who Penalty for falsification of books. Frauds by officers of companies which have gone into liquidation. Liability where proper accounts not kept. 694 SECRETARIAL PRACTICE takes in pawn or pledge or otherwise receives the property knowing it to be pawned, pledged, or disposed of in such circumstances as aforesaid shall be guilty of a misdemeanour. and on conviction thereof liable— (a) in England to be punished in the same way as if he had received the property knowing it to have been obtained in circumstances amounting to a misdemeanour; in Scotland on conviction on indictment to penal servitude for a period not exceeding seven years, or on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding one hundred pounds, or to both such imprisonment and fine. (3) For the purposes of this section, the expression “director” shall include any person in accordance with whose directions or instructions the directors of a company have been accustomed to act. 272. If any director, manager or other officer, or contributory of any company being wound up destroys, mutilates, alters, or falsifies any books, papers, or securities, or makes or is privy to the making of any false or fraudulent entry in any register, book of account, or document belonging to the company with intent to defraud or deceive any person, he shall be guilty of a misdemeanour, and be liable to imprisonment for any term not exceeding two years. with or without hard labour. 273. If any person, being at the time of the commission of the alleged offence a director, manager or other officer of a company which is subsequently ordered to be wound up by the court or subsequently passes a resolution for voluntary winding up— (a) has by false pretences or by means of any other fraud induced any person to give credit to the company; with intent to defraud creditors of the company, has made or caused to be made any gift or transfer of or charge on, or has caused or connived at the levying of any execution against, the property of the company; with intent to defraud creditors of the company, has concealed or removed any part of the property of the company since, or within two months before, the date of any unsatisfied judgment or order for payment of monev obtained against the company; he shall be guilty of a misdemeanour and shall be liable on conviction on indictment to imprisonment for a term not exceeding two years, or on suminary conviction to imprisonment for a term not exceeding twelve months. (c) 274.—(1) If where a company is wound up it is shown that proper books of account were not kept by the company throughout the period of two years immediately preceding the commencement of the winding up, every director, manager or other officer of the company who was knowingly a party to or connived at the default of the company shall, unless he shows that he acted honestly or that in the COMPANIES ACT, 19zq 6q5 circumstances in which the business of the company was carried on the default was excusable, be liable on conviction on indictment to imprisonment for a term not exceeding one year, or on summary conviction to imprisonment for a term not exceeding six months. (2) For the purposes of this section, proper books of account shall be deemed not to have been kept in the case of any company if there have not been kept such books or accounts as are necessary to exhibit and explain the transactions and financial position of the trade or business of the company, including books containing entries from day to day in sufficient detail of all cash received and cash paid, and, where the trade or business has involved dealings in goods, statements of the annual stocktakings and (except in the case of goods sold by way of ordinary retail trade) of all goods sold and purchased, showing the goods and the buyers and sellers thereof in sufficient detail to enable those goods and those buyers and sellers to be identified. 275.—(1) If in the course of the winding up of a company it appears that any business of the company has been carried on with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose, the court, on the application of the official receiver, or the liquidator or any creditor or contributory of the company, may, if it thinks proper so to do, declare that any of the directors, whether past or present, of the company who were knowingly parties to the carrying on of the business in manner aforesaid shall be personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company as the court may direct. Responsibility »f directors for fraudulent trading. (2) Where the court makes any such declaration, it may give such further directions as it thinks proper for the purpose of giving effect to that declaration, and in particular may make provision for making the liability of any such director under the declaration a charge on any debt or obligation due from the company to him, or on any mortgage or charge or any interest in any mortgage or charge on any assets of the company held by or vested in him, or any company or person on his behalf, or any person claiming as assignee from or through the director, company or person, and may from time to time make such further order as may be necessary for the purpose of enforcing any charge imposed under this subsection. For the purpose of this subsection, the expression ‘‘assignee’’ includes any person to whom or in whose favour, by the directions of the director, the debt, obligation, mortgage or charge was created, issued or transferred or the interest created, but does not include an assignee for valuable consideration (not including consideration by way of marriage) given in good faith and without notice of any of the matters on the ground of which the declaration is made. (3) Where any business of a company is carried on with such intent or for such purpose as is mentioned in subsection (1) of this section, every director of the company who was knowingly a party 4 & 5 Geo. 5 C. 59. Power of court to assess damages against delinquent directors &c 696 SECRETARIAL PRACTICE to the carrying on of the business in manner aforesaid, shall be liable on conviction on indictment to imprisonment for a term not exceeding one vear, (4) The court may, in the case of any person in respect of whom a declaration has been made under subsection (1) of this section, or who has been convicted of an offence under subsection (3) of this section, order that that person shall not, without the leave of the court, be a director of or in any way, whether directly or indirectly, be concerned in or take part in the management of a company for such period, not exceeding five years, from the date of the declaration or of the conviction, as the case may be, as may be specified in the order, and if any person acts in contravention of an order made under this subsection he shall, in respect of each offence, be liable on conviction on indictment to imprisonment for a term not exceeding two years, or on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding five hundred pounds, or to both such imprisonment and fine. In this subsection the expression “the court” in relation to the making of an order, means the court by which the declaration was made or the court before which the person was convicted, as the case may be, and in relation to the granting of leave means anv court having jurisdiction to wind up the company. (5) For the purposes of this section, the expression ‘‘ director” shall include any person in accordance with whose directions or instructions the directors of a company have been accustomed to act. (6) The provisions of this section shall have effect notwithstanding that the person concerned may be criminally liable in respect of the matters on the ground of which the declaration is to be made, and where the declaration under subsection (1) of this section is made in the case of a winding up in England, the declaration shall be deemed to be a final judgment within the meaning of paragraph (g) of subsection (1) of section one of the Bankruptcy Act, 1914. (7) Itshall be the duty of the official receiver or of the liquidator to appear on the hearing of an application for leave under subsection (4) of this section, and on the hearing of an application under that subsection or under subsection (1) of this section the official receiver or the liquidator, as the case mav be. mav himself give evidence or call witnesses. 276.—(1) If in the course of winding up a company it appears that any person who has taken part in the formation or promotion of the company, or any past or present director, manager, or liquidator, or any officer of the company, has misapplied or retained or become liable or accountable for any money or property of the company, or been guilty of any misfeasance or breach of trust in relation to the company, the court may, on the application of the official receiver, or of the liquidator, or of any creditor or contributory, examine into the conduct of the promoter, director, manager, liquidator, or officer, and compel him to repay or restore the money or property or any part thereof respectively with interest at such rate as the court COMPANIES ACT, 19z oY thinks just, or to contribute such sum to the assets of the company by way of compensation in respect of the misapplication, retainer, misfeasance, or breach of trust as the court thinks just. (2) The provisions of this section shall have effect notwithstanding that the offence is one for which the offender may be criminally Liable. (3) Where in the case of a winding up in England an order for payment of money is made under this section the order shall hdeemed to be a final judgment within the meaning of paragrof subsection (1) of section one of the Bankruptcy Act, 1914 277.—(1) If it appears to the court in the course of a winding Prosecution of up by, or subject to the supervision of, the court that any past or Slmgnent present director, manager or other officer, or any member, of the members of company has been guilty of any offence in relation to the company for ©™panywhich he is criminally liable, the court may, either on the application of any person interested in the winding up or of its own motion, direct the liquidator— in the case of a winding up in England either himself to prosecute the offender or to refer the matter to the Director of Public Prosecutions; (b) in the case of a winding up in Scotland to refer the matter to the Lord Advocate. (a) (2) If it appears to the liquidator in the course of a voluntary winding up that any past or present director, manager or other officer, or any member, of the company has been guilty of any offence in relation to the company for which he is criminally liable, he shall forthwith report the matter, in the case of a winding up in England, to the Director of Public Prosecutions, and, in the case of a winding up in Scotland, to the Lord Advocate, and shall furnish to the Director or Lord Advocate, as the case may be, such information and give to him such access to and facilities for inspecting and taking copies of any documents, being information or documents in the possession or under the control of the liquidator and relating to the matter in question, as they respectively may require. (3) Where any report is made under the last foregoing subsection to the Director of Public Prosecutions or Lord Advocate, he may, if he thinks fit, refer the matter to the Board of Trade for further enquiry, and the Board shall thereupon investigate the matter and may if they think it expedient, apply to the court for an order conferring on the Board or any person designated by the Board for the purpose with respect to the company concerned all such powers of investigating the affairs of the company as are provided by this Act in the case of a winding up by the court. (4) If on any report to the Director of Public Prosecutions under subsection (2) of this section it appears to him that the case is not one in which proceedings ought to be taken bv him. he shall 698 SECRETARIAL PRACTICE inform the liquidator accordingly, and thereupon, subject to the previous sanction of the court, the liquidator may himself take proceedings against the offender. (5) If it appears to the court in the course of a voluntary winding up that any past or present director. manager or other officer, or any member, of the company has been guilty as aforesaid, and that no report with respect to the matter has been made by the liquidator to the Director of Public Prosecutions or the LordAdvocate under subsection (2) of this section, the court may, on the application of any person interested in the winding up or of its own motion, direct the liquidator to make such a report, and on a report being made accordingly the provisions of this section shall have effect as though the report had been made in pursuance of the provisions of subsection (2) of this section. (6) If, where any matter is reported or referred to the Director of Public Prosecutions or Lord Advocate under this section, he considers that the case is one in which a prosecution ought to be instituted and, further that it is desirable in the public interest that the proceedings in the prosecution should be conducted by him, he shall institute proceedings accordingly, and it shall be the duty of the liquidator and of every officer and agent of the company past and present (other that the defendant in the proceedings) to give him all assistance in connection with the prosecution which he is reasonably able to give. For the purposes of this subsection, the expression “agent” in relation to a company shall be deemed to include any banker or solicitor of the company and any person employed by the company as auditor, whether that person is or is not an officer of the company. (7) If any person fails or neglects to give assistance in manner required by subsection (6) of this section, the court may, on the application of the Director of Public Prosecutions or Lord Advocate, as the case may be, direct that person to comply with the requirements of the said subsection, and where any such application is made with respect to a liquidator the court may, unless it appears that the failure or neglect to comply was due to the liquidator not having in his hands sufficient assets of the company to enable him so to do, direct that the costs of the application shall be borne bv the liquidator personally. (8) The Board of Trade, with the consent of the Treasury, may direct that the whole or any part of any costs and expenses properly incurred by the liquidator in proceedings duly brought by him under this section shall be defrayed as expenses incurred by the Board under this Act in relation to the winding up of companies in England and subsection (3) of section thirteen of the Economy {Miscellaneous Provisions) Act, 1926, shall apply accordingly. Subject to any direction under this subsection and to any mortgages or charges on the assets of the company and any debts to which priority is given by section two hundred and sixty-four of this Act, all such costs and expenses as aforesaid shall be payable out of those assets in priority to all other liabilities pavable thereout. COMPANIES ACT, 1929 I Po , Supplementary Provisions as to Winding up. 278.—(1) A body corporate shall not be qualified for appointment as liquidator of a company, whether in a winding up by or under the supervision of the court or in a voluntary winding up, and any appointment made in contravention of this provision shall be void. Disqualification for appointment as liquidator. (2) Nothing in this section shall disqualify a body corporate from acting as liquidator of a company if acting under an appointment made before the third day of August, nineteen hundred and twenty-eight, but subject as aforesaid any body corporate which acts as liquidator of a company shall be liable to a fine not exceeding one hundred pounds. (3) In the application of this section to Scotland the expression “body corporate ’’ does not include a firm. 279.—(1) If any liquidator, who has made any default in filing, Enforcement of delivering or making any return, account or other document, or in [uy of liquidagiving any notice which he is by law required to file, deliver, make returns, &c. or give, fails to make good the default within fourteen days after the service on him of a notice requiring him to do so, the court may, on an application made to the court by any contributory or creditor of the company or by the registrar of companies, make an order directing the liquidator to make good the default within such time as may be specified in the order. (2) Any such order may provide that all costs of and incidental to the application shall be borne by the liquidator. (3) Nothing in this section shall be taken to prejudice the operation of any enactment imposing penalties on a liquidator in respect of any such default as aforesaid. 280.—(1) Where a company is being wound up, whether by or Notification that under the supervision of the court or voluntarily, every invoice, order Bday 1s in for goods or business letter issued by or on behalf of the company or a liquidator of the company, or a receiver or manager of the property of the company, being a document on or in which the name of the company appears, shall contain a statement that the company is being wound up. (2) If default is made in complying with this section, the company and every director, manager, secretary or other officer of the company, and everv liquidator of the company and ev~-receiver or manager, who knowingly and wilfully authorises permits the default, shal be liable to a fine of twenty pound 281.—(1) In the c=s registered 1n Englan. such a company-(a) every assurance relating solely to freehold or leasehold property, or to any mortgage, charge or other encumbrance on, or any estate, right or interest in, anv real or personal ~ winding up by the court of a co t of a creditors’ voluntary winding Exemption of certain documents from stamp duty on winding up of rompanies. (C SECRETARIAL PRACTICE property, which forms part of the assets of the company and which, after the execution of the assurance, either at law or in equity, is or remains part of the assets of the company; and every power of attorney, proxy paper, writ, order, certificate, affidavit, bond or other instrument or writing relating solely to the property of any company which is being so wound up, or to any proceeding under any such winding-up, shall be exempt from duties chargeable under the enactments relating to stamp duties. (2) In the case of such a winding up as aforesaid of a company registered in Scotland, (a) every conveyance relating solely to property which forms part of the assets of the company and which, after the execution of the conveyance, is or remains the property of the company for the benefit of its creditors; and every power of attorney, commission, factory, oath, affidavit, articles of roup or sale, submission, decree arbitral, and every other instrument and writing whatsoever relating solely to the property of the company; and every deed or writing forming a part of the proceedings in the winding up, shall be exempt from duties chargeable under the enactments relating to stamp duties. (3) In subsection (1) of this section the expression ‘“assurance’’ includes deed, conveyance, assignment and surrender, and in subsection (2) of this section the expression ‘conveyance’ includes assignation, instrument, discharge. writing and deed. Books of company to be evidence. 282. Where a company is being wound up, all books and papers of the company and of the liquidators shall, as between the contributories of the company, be primé facie evidence of the truth of all matters purporting to be therein recorded. Disposal of 283.—(1) When a company has been wound up and is about to be books and papers issolved, the books and papers of the company and of the liauidators may be disposed of as follows, that is to say: — (a) In the case of a winding up by, or subject to the supervision of, the court in such way as the court directs; In the case of a members’ voluntary winding up, in such way as the company by extraordinary resolution directs, and, in the case of a creditors’ voluntary winding up, in such way as the committee of inspection or, if there is no such committee, as the creditors of the company, may direct. (2) After five years from the dissolution of the company no responsibility shall rest on the company, the liquidators, or any person to whom the custody of the books and papers has been committed, by reason of any book or paper not being forthcoming to any person claiming to be interested therein. COMPANIES ACT, 1929 701 (3) Provision may be made by general rules for enabling the Board of Trade to prevent, for such period (not exceeding five years from the dissolution of the company) as the Board think proper, the distruction of the books and papers of a company which has been wound up and for enabling any creditor or contributory of the company to make representations to the Board, and to appeal to the court from any direction which may be given by the Board in the matter. (4) If any person acts in contravention of any general rules made for the purposes of this section or of any direction of the Board thereunder, he shall be liable to a fine not exceeding one hundred pounds. 284.—(1) If where a company is being wound up the winding up is not concluded within one year after its commencement, the liquidator shall, at such intervals as may be prescribed, until the winding up is concluded, send to the registrar of companies a statement in the prescribed form and containing the prescribed particulars with respect to the proceedings in and position of the liquidation. information as to pending liquidations. (2) Any person stating himself in writing to be a creditor or contributory of the company shall be entitled, by himself or by his agent, at all reasonable times, on payment of the prescribed fee, to inspect the statement, and to receive a copy thereof or extract therefrom. (3) If a liquidator fails to comply with this section, he shall be liable to a fine not exceeding fifty pounds for each day during which the default continues, and any person untruthfully stating himself as aforesaid to be a creditor or contributory shall be guilty of a contempt of court, and shall, on the application of the liquidator or of the official receiver, be punishable accordingly. 285.—(1) If, where a company is being wound up in England, it Unclaimed appears either from any statement sent to the registrar under the dens Be last foregoing section or otherwise that a liquidator has in his hands lodged in bank. or under his control any money representing unclaimed or undistributed assets of the company which have remained unclaimed or undistributed for six months after the date of their receipt, the liquidator shall forthwith pay the said money to the Companies Liquidation Account at the Bank of England, and shall be entitled to the prescribed certificate of receipt for the money so paid, and that certificate shall be an effectual discharge to him in respect thereof. (2) For the purpose of ascertaining and getting in any money payable into the Bank of England in pursuance of this section, the like powers may be exercised, and by the like authority, as are exerciseable under section one hundred and fifty-three of the Bankruptcy Act, 1914, for the purpose of ascertaining and getting in the sums, funds, and dividends referred to in that section. 702 SECRETARIAL PRACTICE (3) Any person claiming to be entitled to any money paid into the Bank of England in pursuance of this section may apply to the Board of Trade for payment thereof, and the Board may, on a certificate by the liquidator that the person claiming is entitled, make an order for the payment to that person of the sum due. (4) Any person dissatisfied with the decision of the Board of Trade in respect of a claim made in pursuance of this section may appeal to the High Court. Unclaimed assets 286. When a company registered in Scotland has been wound a Go be up, and is about to be dissolved, the liquidator shall lodge in a joint panies Liquida- Stock bank of issue in Scotland (not being a bank in or of which the ton Account. Jjquidator is acting partner, manager, agent or cashier) in the name of the Accountant of Court the whole unclaimed dividends and unapplied or undistributable balances, and the deposit receipts therefore shall be transmitted to the Accountant of Court, and the provisions of section one hundred and fifty-three of the Bankruptcy (Scotland) Act, 1913, so far as consistent with this Act, shall, with any necessary modifications, apply to sums lodged in a bank in pursuance of this section in like manner as they apply to sums deposited in pursuance of that enactment. Resolutions 287. Where after the commencement of this Act a resolution is De a nes passed at an adjourned meeting of any creditors or contributories of of creditors and a company, the resolution shall, for all purposes, be treated as having contributories. heen passed on the date on which it was in fact passed, and shall not be deemed to have been passed on anv earlier date. Supplementary Powers of Court. Meetings to as- ~~. 288.—(1) The court may, as to all matters relating to the winding en nishes of up of a company, have regard to the wishes of the creditors or contributories. contributories of the company, as proved to it by any sufficient evidence, and may, if it thinks fit, for the purpose of ascertaining those wishes, direct meetings of the creditors or contributories to be called, held, and conducted in such manner as the court directs, and may appoint a person to act as chairman of any such meeting and to report the result thereof to the court. (2) In the case of creditors, regard shall be had to the value of each creditor’s debt. (3) In the case of contributories, regard shall be had to the number of votes conferred on each contributory by this Act or the articles. Judicial notice of signature of officers. 289. In all proceedings under this Part of this Act, all courts, judges, and persons judicially acting, and all officers, judicial or ministerial, of any court, or employed in enforcing the process of any court, shall take judicial notice of the signature of any officer of the High Court or of a county court in England, or of the Court of Session or of a sheriff court in Scotland. or of the High Court in COMPANIES ACT, 1929 703 Northern Ireland, and also of the official seal or stamp of the several offices of the High Court in England or Northern Ireland, or of the Court of Session, appended to or impressed on any document made, issued, or signed under the provisions of this Part of this Act, or any official copy thereof. 290.—(1) The judges of the county courts in England who sit at places more than twenty miles from the General Post Office, and in Northern Ireland the judge exercising the bankruptcy jurisdiction of the High Court and county court judges and recorders, and the sheriffis of counties in Scotland, shall be commissioners for the purpose of taking evidence under this Act, where a company is wound up in England or Scotland, and the court may refer the whole or any part of the examination of any witnesses under this Act to any person hereby appointed commissioner, although he is out of the jurisdiction of the court that made the winding up order. (2) Every commissioner shall, in addition to any powers which he might lawfully exercise as a judge of county courts, judge exercising the said bankruptcy jurisdiction, county court judge, recorder or sheriff, have in the matter so referred to him all the same powers of summoning and examining witnesses, of requiring the production or delivery of documents, of punishing defaults by witnesses, and of allowing costs and expenses to witnesses, as the court which made the winding-up order. (3) The examination so taken shall be returned or reported to the court which made the order in such manner as that court directs. 291.—(1) The court may direct the examination in Scotland of any person for the time being in Scotland, whether a contributory of the company or not, in regard to the trade, dealings, affairs or property of any company in course of being wound up, or of any person being a contributory of the company, so far as the company may be interested therein by reason of his being a contributory. (2) The order or commission to take the examination aforesaid shall be directed to the sheriff of the county in which the person to be examined is residing or happens to be for the time, and the sheriff shall summon that person to appear before him at a time and place to be specified in the summons for examination on oath as a witness or as a haver, and to produce any books or papers called for which are in his possession or power. (3) The sheriff may take the examination either orally or on written interrogatories, and shall report the same in writing in the usual form to the court, and shall transmit with the report the books and papers produced, if the originals thereof are required and specified by the order or commission, or otherwise copies thereof or extracts therefrom authenticated by the sheriff. (4) If any person so summoned fails to appear at the time and place specified, or refuses to be examined or to make the production required, the sheriff shall proceed against him as a witness or haver duly cited and failing to appear or refusing to give evidence or make production may be proceeded against by the law of Scotland. Special commission for receiving evidence. Court may ordet =xarmination of persons in Scotland. 704 SECRETARIAL PRACTICE (5) The sheriff shall be entitled to such fees, and the witness shall be entitled to such allowances, as sheriffs when acting as commissioners under appointment from the Court of Session and as witnesses and havers are entitled to in the like cases according to the law and practice of Scotland. (6) If any objection is stated to the sheriff by the witness, either on the ground of his incompetency as a witness, or as to the production required, or on any other ground, the sheriff may, if he thinks fit, report the objection to the court, and suspend the examination of the witness until it has been disposed of by the court. 292.—(1) Where any petition or application for leave to proceed with an action or proceeding against a company which is being wound up in Scotland is unopposed and is granted by the court, the costs of such petition or application shall, unless the court otherwise directs, be added to the amount of the claim of the petitioner or applicant against the company. (2) Nothing in this section shall be taken to affect the practice or powers of the court as existing immediately before the commencement of this Act with respect to the costs of an application for leave to proceed with an action or proceeding against a companv which is being wound up in England. Affidavits, &c., 293.—(1) Any affidavit required to be sworn under the provisions ted King + for the purposes of this Part of this Act may be sworn in the dominions United Kingdom, or elsewhere within the dominions of His Majesty, before any court, judge, or person lawfully authorised to take and receive affidavits or before any of His Majesty’s consuls or viceconsuls in any place outside His Majesty’s dominions. (2) All courts, judges, justices, commissioners, and persons acting judicially shall take judicial notice of the seal or stamp or signature, as the case may be, of any such court, judge, person, consul, or vice-consul attached, appended, or subscribed to any such affidavit, or to any other document to be used for the purposes of this Part of this Act. Power of court to declare dissolution of company void Provisions as to Dissolution. 294.—(1) Where a company has been dissolved, the court may at any time within two years of the date of the dissolution, on an application being made for the purpose by the liquidator of the Company or by any other person who appears to the court to be interested, make an order, upon such terms as the court thinks fit, declaring the dissolution to have been void, and thereupon such proceedings may be taken as might have been taken if the company had not been dissolved. (2) It shall be the duty of the person on whose application the order was made, within seven days after the making of the order, or such further time as the court may allow, to deliver to the registrar of companies for registration an office copy of the order, and if that person fails so to do he shall be liable to a fine not exceeding five pounds for everv dav during which the default continies COMPANIES ACT, 1928 705 295.—(1) Where the registrar of companies has reasonable cause to believe that a company is not carrying on business or in operation, he may send to the company by post a letter inquiring whether the company is carrying on business or in operation. (2) If the registrar does not within one month of sending the letter receive any answer thereto, he shall within fourteen days after the expiration of the month send to the company by post a registered letter referring to the first letter, and stating that no answer thereto has been received, and that if an answer is not received to the second letter within one month from the date thereof, a notice will be published in the Gazette with a view to striking the name of the company off the register. (3) If the registrar either receives an answer to the effect that the company is not carrying on business or in operation, or does not within one month after sending the second letter receive any answer, he may publish in the Gazette, and send to the company by post, a notice that at the expiration of three months from the date of that notice the name of the company mentioned therein will, unless cause is shown to the contrary, be struck off the register and the company will be dissolved. (4) If, in any case where a company is being wound up, the registrar has reasonable cause to believe either that no liquidator is acting, or that the affairs of the company are fully wound up, and the returns required to be made by the liquidator have not been made for a period of six consecutive months, the registrar shall publish in the Gazette and send to the company or the liquidator, if any, a like notice as is provided in the last preceding subsection. {5) At the expiration of the time mentioned in the notice the registrar may, unless cause to the contrary is previously shown by the company, strike its name off the register, and shall publish notice thereof in the Gazette, and on the publication in the Gazette of this notice the company shall be dissolved: Provided that— (a) the liability, if any, of every director, managing officer, and member of the company shall continue and may be enforced as if the companv had not been dissolved; and nothing in this subsection shall affect the power of the court to wind up a company the name of which has been struck off the register. (6) If a company or any member or creditor thereof feels aggrieved by the company having been struck off the register, the court on an application made by the company or member or creditor before the expiration of twenty years from the publication in the Gazette of the notice aforesaid may, if satisfied that the company was at the time of the striking off carrying on business or in operation, or otherwise that it is just that the company be restored to the register, order the name of the company to be restored to the register, and upon an office copy of the order being delivered to the b) Registrar may strike defunct company off register. 706 SECRETARIAL PRACTICE registrar for registration the company shall be deemed to have continued in existence as if its name had not been struck off; and the court may by the order give such directions and make such provisions as seem just for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off. (7) A notice to be sent under this section to a liquidator may be addressed to the liquidator at his last known Place of business, and a letter or notice to be sent under this section to a company may be addressed to the company at its registered office, or, if no office has been registered, to the care of some director or officer of the company, or, if there is no director or officer of the company whose name and address are known to the registrar of companies, may be sent to each of the persons who subscribed the memorandum, addressed to him at the address mentioned in the memorandum Property of dissolved company to be bona vacantia. 296. Where a company is dissolved, all property and rights whatsoever vested in or held on trust for the company immediately before its dissolution (including leasehold property but not including property held by the company on trust for any other person) shall, subject and without prejudice to any order which may at any time be made by the court under the two last foregoing sections of this Act, be deemed to be bona vacantia and shall accordingly belong to the Crown, or to the Duchy of Lancaster or to the Duke of Cornwall for the time being, as the case may be, and shall vest and may be dealt with in the same manner as other bona vacantia accruing to the Crown. to the Duchy of Lancaster or to the Duke of Cornwall Sthecial Provisions as to Stannavies. Attachment of ~~ 297. When several companies are in course of liquidation by or So She to con- under the supervision of the court exercising the stannaries jurisdicai tion and acting under ‘that jurisdiction, if it appears to the judge stannaries court. that a person who is a contributory of one of the companies is also a creditor claiming a debt against one of the other companies, the judge may (if after inquiry he thinks fit) direct that the debt, when allowed, shall be attached, and payment thereof to the creditor suspended for a time certain as a security for payment of any calls that are or may in course of liquidation become due from him to the company of which he is a contributory; and the amount thereof shall be applied to such payment in due course: Provided that such an order of attachment shall not prejudice any claim which the company so indebted to the creditor may have against him by way of set off, counterclaim, or otherwise, or any lawful claim of lien or specific charge on the debt in favour of any third person. Preferential pay- 298. In the application to companies within the stannaries of the ments in provisions of this Act with respect to preferential payments. the stannaries cases. . . » following modifications shall be made ‘— COMPANIES ACT, 1929 7¢° (1) In the case of a clerk or servant of such a company, the priority with respect to wages and salary given by this Act shall be given to the extent of three months only, instead of four months, and shall not extend to the principal agent, manager, purser or secretary; (2) All wages in relation to the mine of a miner, artizan, or labourer employed in or about the mine, including all earnings by a miner arising from any description of piece or other work, or as a tributer or otherwise, but not exceeding an amount equal to three months wages, shall be included amongst the payments which are, under this Act, to be made in priority to other debts: (3) The following debts, that is to say: — (a) wages of any miner, artizan, or labourer, unpaid at the commencement of the winding up; and (b) all such amounts due in respect of any compensation or liability for compensation under the Workmen's Compensation Act, 1925, payable to a miner or the dependents of a miner as are given priority by paragraph (d) of subsection (1) of section two hundred and sixty-four of this Act; and (¢) all such amounts due in respect of contributions payable in respect of a miner under the enactments mentioned in paragraph (¢) of the said subsection (1) as are given priority by that paragraph; shall be paid by the liquidator forthwith in priority to all costs, except (in the case of a winding up by the court) such costs of and incidental to the making of the winding up order as in the opinion of the court have been properly incurred, and to all claims by mortgagees, execution creditors, or any other persons, except the claims of clerks and servants in respect of their wages or salary. (4) Subject as aforesaid, the court may, by order, charge the whole or any part of the assets of the company, in priority to all claims and to all existing mortgages or charges thereon, with the payment of a sum sufficient to discharge the debts to be paid in priority under the last foregoing paragraph, together with interest thereon at a rate not exceeding five per cent. per annum, and this charge may be made in favour of any person who is willing to advance the requisite amount or any part thereof, and as soon as the said sum has been so advanced, the said debts shall be paid without delay so far as the amount advanced extends, and in such order of payment as the court directs. (5) The provision giving a right of priority to a person who has advanced money for the making of payments on account of wages and salaries shall have effect subject to the modifications contained in this section. 708 SECRETARIAL PRACTICE Provisions as to mine club funds 299.—(1) On the winding up of a company within the stannaries, contributions of the miners, artizans, or labourers for the purpose of a mine club, or accident, or sick, or benefit fund shall not be deemed to be, or be applied as part of the assets of the company in liquidation of the debts of the company or otherwise, but shall be accounted for by the purser or any other person in possession of the fund to the liquidator, and shall be recoverable by him, and be applied in accordance with the rules of the club. (2) Where the winding up is a voluntary winding up, any person claiming to be entitled to any such contributions or fund shail have the same right as the liquidator of applying to the court for directions. or to determine anv question arising in the matter. Central Accounts. 300.—(1) An account, to be called the Companies Liquidation Account, shall be kept by the Board of Trade with the Bank of England, and all moneys received by the Board in respect of proceedings under this Act in connexion with the winding up of companies in England shall be paid to that account. (2) All payments out of money standing to the credit of the Board of Trade in the Companies Liquidation Account shall be made by the Bank of England in the prescribed manner. Companies Liquidation. Account. Investment of 301.—(1) Whenever the cash balance standing to the credit of Sorplus fuuds on the Companies Liquidation Account is in excess of the amount “ which in the opinion of the Board of Trade is required for the time being to answer demands in respect of companies’ estates, the Board shall notify the excess to the Treasury, and shall pay over the whole or any part of that excess as the Treasury may require, to the Treasury, to such account as the Treasury may direct, and the Treasury may invest the sums paid over, or any part thereof, in Government securities. to be placed to the credit of the said account. (2) When any part of the money so invested is, in the opinion of the Board of Trade, required to answer any demands in respect of companies’ estates, the Board shall notify to the Treasury the amount so required, and the Treasury shall thereupon repay to the Board such sum as may be required to the credit of the Companies Liquidation Account, and for that purpose may direct the sale of such part of the said securities as may be necessary. (3) The dividends on investments under this section shall be paid into the Bankruptcy and Companies Winding-up (Fees) Account established under the Economy (Miscellaneous Provisions) Act. 1026. Separate accounts of particular estates. 302.—(1) An account shall be kept by the Board of Trade of the receipts and payments in the winding up of each company in England, and, when the cash balance standing to the credit of the account of any company is in excess of the amount which, in the opinion of the committee of inspection. is required for the time COMPANIES ACT, 109029 709 being to answer demands in respect of that company’s estate, the Board shall, on the request of the committee, invest the amount not so required in Government securities, to be placed to the credit of the said account for the benefit of the company. (2) When any part of the money so invested is, in the opinion of the committee of inspection, required to answer any demands in respect of the estate of the company, the Board of Trade shall, on the request of the committee, raise such sum as may be required by the sale of such part of the said securities as may be necessary. (3) The dividends on investments under this section shall be paid to the credit of the company. (4) When the balance at the credit of any company’s account n the hands of the Board of Trade exceeds two thousand pounds, and the liquidator gives notice to the Board that the excess is not required for the purposes of the liquidation, the company shall be entitled to interest on the excess at the rate of two per cent. per annum. Officers. 303.—(1) The Board of Trade may, with the approval of the Officers and Treasury, appoint such additional officers as may be required by remuneration. the Board for the execution as respects England of this Part of this Act, and may remove any person so appointed. (2) The Board of Trade, with the concurrence of the Treasury, shall direct whether any and what remuneration is to be allowed to any officer of, or person attached to, the Board performing any duties under this Part of this Act in relation to the winding up of companies in England, and may vary, increase, or diminish that remuneration as they think fit. 304. The officers of the courts acting in the winding up of com panies in England shall make to the Board of Trade such returns of the business of their respective courts and offices, at such times, and in such manner and form, as may be prescribed, and from those returns the Board shall cause books to be prepared which shall, under the regulations of the Board, be open for public information and searches. Returns by officers in English winding up. Rules and Fees. 305.—(1) The Lord Chancellor may, with the concurrence of the General rules President of the Board of Trade, make general rules for carrying into es oy effect the objects of this Act so far as relates to the winding up of companies in England, and the Court of Session may by Act of Sederunt make general rules for carrying into effect the objects of this Act so far as relates to the winding up of companies in Scotland. (2) All rules made under this section shall be laid before Parliament within three weeks after they are made, if Parliament is then sitting, and, if Parliament is not sitting, within three weeks after the beginning of the next session of Parliament, and shall be judicially noticed, and shall have effect as if enacted by this Act. 710 SECRETARIAL PRACTICE (3) There shall be paid in respect of proceedings under this Act in relation to the winding up of companies in England such fees as the Lord Chancellor may, with the sanction of the Treasury, direct, and the Treasury may direct by whom and in what manner the same are to be collected and accounted for: Provided that in fixing the fees aforesaid regard shall be had to the provisions of section fourteen of the Economy (Miscellaneous Provisions) Act, 1026. (4) All rules made and directions given by the Lord Chancellor under this section shall be adopted by the authority for the time being empowered to make rules for regulating the practice or procedure in the Chancery Court of the County Palatine of Lancaster, but as so adopted shall have effect with the substitution of the words “vice-chancellor” for the word ‘judge,’ and of the word registrar”’ for the word ‘“ master,’’ and of the words ‘“ chambers of the registrar” for the words ‘chambers of the judge” and “ judge’s chambers," and any directions as to the remuneration to be allowed to officers of that court in respect of proceedings under this Act shall be subject to the sanction of the Chancellor of the Duchy and County Palatine of Lancaster. ParT VI. RECEIVERS AND MANAGERS. Plsgadiifoption 306.—(1) A body corporate shall not be qualified for appointment as romiver 00 as receiver of the property of a company. (2) Nothing in this section shall disqualify a body corporate from acting as receiver as aforesaid if acting under an appointment made before the third day of August, nineteen hundred and twentyeight, but subject as aforesaid any body corporate which acts as receiver as aforesaid shall be liable to a fine not exceeding one hundred pounds. (3) In the application of this section to Scotland the expression “bodv corporate’ does not include a firm. Power in England to appoint official receiver as receiver for debenture holders or creditors 307. Where an application is made to the court to appoint a receiver on behalf of the debenture holders or other creditors of a company which is being wound up by the court in England. the official receiver may be so apppointed. Notification that 308.—(I) Where a receiver or manager of the property of a receiver or company has been appointed, every invoice, order for goods or appointed business letter issued by or on behalf of the company or the receiver or manager or the liquidator of the company, being a document on or in which the name of the company appears, shall contain a statement that a receiver or manager has been appointed. COMPANIES ACT, 192g 711 (2) If default is made in complying with the requirements of this section, the company and every director, manager, secretary or other officer of the company, and every liquidator of the company, and every receiver or manager, who knowingly and wilfully authorises or permits the default, shall be liable to a fine of twenty pounds. 309. The Court may, on an application made to the court by the liquidator of a company, by order fix the amount to be paid by way of remuneration to any person who, under the powers contained in any instrument, has been appointed as receiver or manager of the property of the company, and may from time to time, on an application made either by the liquidator or by the receiver or manager, vary or amend any order so made. 310.—(1) Every receiver or manager of the property of a company who has been appointed under the powers contained in any instrument shall, within one month, or such longer period as the registrar of companies may allow, after the expiration of the period of six months from the date cf his appointment and of every subsequent period of six months, and within one month after he ceases to act as receiver or manager, deliver to the registrar of companies for registration an abstract in the prescribed form showing his receipts and his payments during that period of six months, or, where he ceases to act as aforesaid, during the period from the end of the period to which the last preceding abstract related up to the date of his so ceasing, and the aggregate amount of his receipts and of his payments during all preceding periods since his appointment. (2) Every receiver or manager who makes default in complying with the provisions of this section shall be liable to a fine not exceeding five pounds for every day during which the default continues. 311.—(1) If (a) any receiver of the property of a company, who has made default in filing, delivering or making any return, account or other document or in giving any notice, which a receiver is by law required to file, deliver, make or give, fails to make good the default within fourteen days after the service on him of a notice requiring him to do so; or any receiver or manager of the property of a company who has been appointed under the powers contained in any instrument, has, after being required at any time by the liquidator of the company so to do, failed to render proper accounts of his receipts and payments and to pay over to the liquidator the amount properly payable to him; the court may, on an application made for the purpose, make an order directing the receiver or manager, as the case may be, to make good the default within such time as may be specified in the order Dower of court to fix remuneration on application of liquidator. Delivery to registrar of accounts of receivers and managers. Enforcement of luty of receiver 0 make returns, ke. (2) In the case of any such default as is mentioned in paragraph (a) of the last preceding subsection an application for the purposes of this section may be made by any member or creditor of the 712 SECRETARIAL PRACTICE company or by the registrar of companies, and the order may provide that all costs of and incidental to the application shall be borne by the receiver, and in the case of any such default as is mentioned in paragraph (b) of that subsection the application shall be made by the liquidator. (3) Nothing in this section shall be taken to prejudice the operation of any enactments imposing penalties on receivers in respect of such default as is mentioned in paragraph (a) of subsection (1) of this section. Part VII. GENERAL PROVISIONS AS TO REGISTRATION. Registration 312.—(1) For the purposes of the registration of companies under ssn Eng. this Act, there shall be offices in England and Scotland at such land. places as the Board of Trade think fit. (2) The Board of Trade may appoint such registrars, assistant registrars, clerks, and servants as the Board think necessary for the registration of companies under this Act, and may make regulations with respect to their duties, and may remove any persons so appointed. (3) The salaries of the persons appointed under this section shall be fixed by the Board of Trade with the concurrence of the Treasury, and shall be paid out of money provided by Parliament. (4) The Board of Trade may require that the office of the registrar of the court exercising in respect of the winding up of companies the stannaries jurisdiction shall be one of the offices for the registration of companies within that jurisdiction. (5) The Board may direct a seal or seals to be prepared for the authentication of documents required for or connected with the registration of companies. (6) Whenever any act is by this Act directed to be done to or by the registrar of companies, it shall, until the Board of Trade otherwise directs, be done to or by the existing registrar of companies in England or Scotland, as the case may be, or in his absence to or by such person as the Board may for the time being authorise: Provided that, in the event of the Board altering the constitution of the existing registry offices or any of them, any such act shall be done to or by such officer and at such place with reference to the local situation of the registered offices of the companies to be registered as the Board may appoint. 313.—(1) There shall be paid to the registrar in respect of the several matters mentoned in the Table set out in the Tenth Schedule to this Act the several fees therein specified. (2) All fees paid to the registrar in pursuance of this Act shall be paid into the Exchequer. COMPANIES ACT, 1029 712 314.—(1) Any person may inspect the documents kept by the registrar of companies on payment of such fees as may be appointed by the Board of Trade, not exceeding one shilling for each inspection, and any person may require a certificate of the incorporation of any company, or a copy or extract of any other document or any part of any other document, to be certified by the registrar, on payment for the certificate, certified copy or extract, of such fees as the Board of Trade may appoint, not exceeding five shillings for a certificate of incorporation and not exceeding sixpence for each folio of a certified copy or extract: Provided that, where a company has been dissolved under this Act, the registrar may, at any time after the expiration of two years from the date of the dissolution, direct that any documents in his custody relating to that company may be removed to the Public Record Office, and documents in respect of which any such direction is given shall be disposed of in accordance with the provisions of the Public Record Office Acts, 1838 to 1898, and the rules made thereunder. {nspection, projuction and :vidence of documents kept by registrar. (2) No process for compelling the production of any document kept by the registrar shall issue from any court except with the leave of that court, and any such process if issued shall bear thereon a statement that it is issued with the leave of the court. (3) A copy of or extract from any document kept and registered at any of the offices for the registration of companies in England or Scotland, certified to be a true copy under the hand of the registrar (whose official position it shall not be necessary to prove), shall in all legal proceedings be admissible in evidence as of equal validity with the original document. (4) In the application of this section to Scotland, as in its application to England, a folio shall be deemed to consist of seventy two words. 315.—(1) If a company, having made default in complying Enforcement of with any provision of this Act which requires it to file with, deliver duty i Company or send to the registrar of companies any return, account or other to registrar. document, or to give notice to him of any matter, fails to make good the default within fourteen days after the service of a notice on the company requiring it to do so, the court may, on an application made to the court by any member or creditor of the company or by the registrar of companies, make an order directing the company and any officer thereof to make good the default within such time as may be specified in the order. (2) Any such order may provide that all costs of and incidental to the application shall be borne by the company or by any officers of the company responsible for the default. (3) Nothing in this section shall be taken to prejudice the operation of any enactment imposing penalties on a company or its officers in respect of anv such default as aforesaid. f-SECRETARIAL PRACTICE Part VIII. APPLICATION OF AcT TO COMPANIES FORMED OR REGISTERED UNDER FORMER ACTS. Application of 316. In the application of this Act to existing companies, it Act to companies shall apply in the same manner— former Lom (1) in the case of a limited company, other than a company limited by guarantee, as if the company had been formed and registered under this Act as a companv limited by shares: 35 & 26 Vict. c. 89. Application of Act to companies registered under former Companies Acts. in the case of a company limited by guarantee, as if the company had been formed and registered under this Act as a company limited by guarantee; and (3) in the case of a company other than a limited company, as if the company had been formed and registered under this Act as an unlimited company: Provided that reference, express or implied, to the date of registration shall be construed as a reference to the date at which the company was registered under the Joint Stock Companies Acts, the Companies Act, 1862, or the Companies (Consolidation) Act, 1908, as the case mav be. 317. This Act shall apply to every company registered but not formed under the Joint Stock Companies Acts, the Companies Act, 1862, or the Companies (Consolidation) Act, 1908, in the same manner as it is in Part IX of this Act declared to apply to companies registered but not formed under this Act: Provided that reference, express or implied, to the date of registration shall be construed as a reference to the date at which the company was registered under the Joint Stock Companies Acts, the Companies Act, 1862, or the Companies (Consolidation) Act, 1008. as the case mav be. Application of 318. This Act shall apply to every unlimited company registered A panies as a limited company in pursuance of the Companies Act, 1879, or ander former Section fifty-seven of the Companies (Consolidation) Act, 1908, in Companies Acts. the same manner as it applies to an unlimited company registered 42 & 43 Vict. 4 v ie c. 76. in pursuance of this Act as a limited company: Provided that reference, express or implied, to the date of régistration shall be construed as a reference to the date at which the company was registered as a limited company under the said Act or said section. as the case mav be. Provision as to ~~ 319.—(1) A company registered under the Joint Stock Comtered under the. panies Acts may cause its shares to be transferred in manner hitherto Joint Stock in. use, or in such other manner as the company may direct Companies Acts. _ (2) The power of altering articles under section ten of this Act shall, in the case of an unlimited company formed and registered COMPANIES ACT, 1929 715 under the Joint Stock Companies Acts, extend to altering any regulations relating to the amount of capital or to its distribution into shares, notwithstanding that those regulations are contained in the memorandum. 320. Nothing in this Part of this Act shall apply to companies registered in the Irish Free State or Northern Ireland. Exclusion of companies regis tered in Irish Free State or Northern [reland. Part IL... COMPANIES NOT FORMED UNDER THIS ACT AUTHORISED TC REGISTER UNDER THIS ACT. 321.—(1) With the exceptions and subject to the provisions contained in this section,— any company consisting of seven or more members, which was in existence on the second day of November, eighteen hundred and sixty-two, including any company registered under the Joint Stock Companies Acts; and any company formed after the date aforesaid, whether before or after the commencement of this Act, in pursuance of any Act of Parliament other than this Act, or of letters patent, or being a company within the stannaries, or being otherwise duly constituted according to law, and consisting of seven or more members; may at any time register under this Act as an unlimited company, or as a company limited by shares, or as a company limited by guarantee; and the registration shall not be invalid by reason that it has taken place with a view to the company being wound up: Provided that— (i) A company registered in any part of the United Kingdom under the Companies Act, 1862, or the Companies (Consolidation) Act, 190%. shall not register in pursuance of this section: A company having the liability of its members limited by Act of Parliament or letters patent, and not being a joint stock company as hereinafter defined, shall not register in pursuance of this section: A company having the liability of its members limited by Act of Parliament or letters patent shall not register in pursuance of this section as an unlimited company or as a company limited by guarantee: A company that is not a joint stock company as hereinafter defined shall not register in pursuance of this section as a company limited by shares: A company shall not register in pursuance of this section without the assent of a majority of such of its members as are present in person or by proxy (in cases where proxies are allowed by the regulations of the company) at a general meeting summoned for the purpose: Companies capable of being registered. ” / = SECRETARIAL PRACTICE (vi) Where a company not having the liability of its members limited by Act of Parliament or letters patent is about to register as a limited company, the majority required to assent as aforesaid shall consist of not less than threefourths of the members present in person or by proxy at the meeting: Where a company is about to register as a company limited by guarantee, the assent to its being so registered shall be accompanied by a resolution declaring that each member undertakes to contribute to the assets of the company, in the event of its being wound up while he is a member, or within one year after he ceases to be a member, for payment of the debts and liabilities of the company contracted before he ceased to be a member, and of the costs and expenses of winding up, and for the adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding a specified amount. Ct (2) In computing any majority under this section when a poll is demanded regard shall be had to the number of votes to which each member is entitled according to the regulations of the company. Definition of joint stock company. 322. For the purposes of this Part of this Act, as far as relates to registration of companies as companies limited by shares, a joint stock company means a company having a permanent paid-up or nominal share capital of fixed amount divided into shares, also of fixed amount, or held and transferable as stock, or divided and held partly in one way and partly in the other, and formed on the principle of having for its members the holders of those shares or that stock, and no other persons, and such a company when registered with limited liability under this Act shall be deemed to be a company limited bv shares. Requirements 323. Before the registration in pursuance of this Part of this for registration Act of a joint stock company, there shall be delivered to the registrar vy joint stock i companies, the following documents: — (1) A list showing the names, addresses, and occupations of all persons who on a day named in the list, not being more than six clear days before the day of registration, were members of the company, with the addition of the shares or stock held by them respectively, distinguishing, in cases where the shares are numbered, each share by its number: A copy of any Act of Parliament, royal charter, letters patent, deed of settlement, contract of copartmery, cost book regulations, or other instrument constituting or regulating the company; and (3) If the company is intended to be registered as a limited company, a statement specifying the following particulars — COMPANIES ACT, 1929 71% (a) The nominal share capital of the company and the number of shares into which it is divided, or the amount of stock of which it consists; (b) The number of shares taken and the amount paid on each share; (¢) The name of the company, with the addition of the word ‘limited’ as the last word thereof; and (d) In the case of a company intended to be registered as a company limited by guarantee, the resolution declaring the amount of the guarantee. 324. Before the registration in pursuance of this Part of this Act of any company not being a joint stock company, there shall be delivered to the registrar— (1) A list showing the names, addresses, and occupations of the directors or other managers (if any) of the company; and A copy of any Act of Parliament, letters patent, deed of settlement, contract of copartnery, cost book regulations, or other instrument constituting or regulating the company; and (2) {3) In the case of a company intended to be registered as a company limited by guarantee, a copy of the resolution declaring the amount of the guarantee. Requirements for registratior by other than joint stock ~ompanies. 325. The lists of members and directors and any other particulars Authentication relating to the company required to be delivered to the registrar of iotatements of shall be verified by a statutory declaration of any two or more companies directors or other principal officers of the companv 326. The registrar may require such evidence as he thinks necessary for the purpose of satisfying himself whether any company proposing to be registered is or is not a joint stock company as hereinbefore defined Registrar may require evidence as to nature of COMDANnY 327. No fees shall be charged in respect of the registration in Exemption of pursuance of this Part of this Act of a company if it is not registered SETI pom av as a limited company, or if before its registration as a limited com- Prat a pany the liability of the shareholders was limited by some other Act of Parliament or bv letters patent. 328. When a company registers in pursuance of this Part of this Addition of Act with limited liability, the word ““limited’’ shall form. and be _ limited to registered as, part of its name. 329. On compliance with the requirements of this Part of this Certificate of Act with respect to registration, and on payment of such fees, if ain of any, as are payable under the Tenth Schedule to this Act, the companies registrar shall certify under his hand that the company applying for registration is incorporated as a company under this Act, and in the case of a limited company that it is limited. and thereupon the 718 SECRETARIAL PRACTICE company shall be so incorporated, and any banking company in Scotland so incorporated shall be deemed to be a bank incorporated sonstituted, or established bv or under Act of Parliament. Vesting of property on registration. Saving for existng liabilities. 330. All property, real and personal (including things in action), oelonging to or vested in a company at the date of its registration in pursuance of this Part of this Act, shall on registration pass to and vest in the company as incorporated under this Act for all the estate ind interest of the company therein. 331. Registration of a company in pursuance of this Part of this Act shall not affect the rights or liabilities of the company in respect of any debt or obligation incurred, or any contract entered into, by, to. with, or on behalf of, the company before registration. Continuation of ~~ 332, All actions and other legal proceedings which at the time SHiSting actions. of the registration of a company in pursuance of this Part of this Act are pending by or against the company, or the public officer or any member thereof, may be continued in the same manner as if the registration had not taken place: Provided that execution shall not issue against the effects of any individual member of the company on any judgment, decree, or order obtained in any such-action or proceeding, but, in the event of the property and effects of the company being insufficient to satisfy the judgment, decree, or order, an order may be obtained for winding up the company. iffect of regisration under Act 333.—(x) When a company is registered in pursuance of this Part of this Act, the following provisions of this section shall have effect. (2) All provisions contained in any Act of Parliament or other instrument constituting or regulating the company, including, in the case of a company registered as a company limited by guarantee, the resolution declaring the amount of the guarantee, shall be deemed to be conditions and regulations of the company, in the same manner and with the same incidents as if so much thereof as would, if the company had been formed under this Act, have been required to be inserted in the memorandum, were contained in a registered memorandum, and the residue thereof were contained in registered articles. (3) All the provisions of this Act shall apply to the company, and the members, contributories, and creditors thereof, in the same manner in all respects as if it had been formed under this Act, subject as follows: — (a) Table A shall not apply unless adopted by special resolution; (6) The provisions of this Act relating to the numbering of shares shall not apply to any joint stock company whose shares are not numbered; Subject to the provisions of this section the company shall not have power to alter any provision contained in any Act of Parliament relating to the company; 'c) COMPANIES ACT, 1929 71q (d) Subject to the provisions of this section the company shall not have power, without the sanction of the Board of Trade, to alter any provision contained in any letters patent relating to the company; The company shall not have power to alter any provision contained in a royal charter or letters patent with respect to the objects of the company; In the event of the company being wound up, every person shall be a contributory, in respect of the debts and liabilities of the company contracted before registration, who is liable to pay or contribute to the payment of any debt or liability of the company contracted before registration, or to pay or contribute to the payment of any sum for the adjustment of the rights of the members among themselves in respect of any such debt or liability, or to pay or contribute to the payment of the costs and expenses of winding up the company, so far as relates to such debts or liabilities as aforesaid: (e) (P In the event of the company being wound up, every contributory shall be liable to contribute to the assets of the company, in the course of the winding up, all sums due from him in respect of any such liability as aforesaid, and, in the event of the death, bankruptcy, or insolvency, of any contributory, or marriage of any female contributory, the provisions of this Act with respect to the personal representatives, to the heirs and legatees of heritage of the heritable estate in Scotland of deceased contributories, to the trustees of bankrupt or insolvent contributories, and to the liabilities of husbands and wives respectively, shall apply. (4) The provisions of this Act with respect to— (a) the registration of an unlimited company as limited; (6) the powers of an unlimited company on registration as a limited company to increase the nominal amount of its share capital and to provide that a portion of its share capital shall not be capable of being called up except in the event of winding up; the power of a limited company to determine that a portion of its share capital shall not be capable of being called ur except in the event of winding up; shall apply notwithstanding any provisions contained in any Act of Parliament, royal charter, or other instrnment constituting or regulating the company. (5) Nothing in this section shall authorise the company to alter any such provisions contained in any instrument constituting or regulating the company, as would, if the company had originally been formed under this Act, have been required to be contained in the memorandum and are not authorised to be altered bv this Act. fc) 720 SECRETARIAL PRACTICE (6) Nothing in this Act shall derogate from any power of altering its constitution or regulations which may, by virtue of any Act of Parliament or other instrument constituting or regulating the company, be vested in the company. (7) In this section the expression ‘‘instrument’’ includes deed of settlement, contract of co-partnery, cost-book regulations and letters patent. . Power to sub- 334.—(1) Subject to the provisions of this section, a company Satie memo- registered in pursuance of this Part of this Act may by special articles for deed Te€solution alter the form of its constitution by substituting a memo: of settlement. randum and articles for a deed of settlement. (2) The provisions of this Act with respect to confirmation by the court and registration of an alteration of the objects of a company shall so far as applicable apply to an alteration under this section with the following modifications: — (a) There shall be substituted for the printed copy of the altered memorandum required to be delivered to the registrar of companies a printed copy of the substituted memorandum and articles; and On the registration of the alteration being certified by the registrar the substituted memorandum and articles shall apply to the company in the same manner as if it were a company registered under this Act with that memorandum and those articles, and the company’s deed of settlement shall cease to apply to the company. (3) An alteration under this section may be made either with or without any alteration of the obiects of the company under this Act. (b) (4) In this section the expression “deed of settlement’ includes any contract of copartnery or other instrument constituting or regulating the company, not being an Act of Parliament, a royal charter, or letters patent. Power of court to stay or restrain proceedings. Actions stayed on winding-up order. 335. The provisions of this Act with respect to staying and restraining actions and proceedings against a company at any time after the presentation of a petition for winding up and before the making of a winding-up order shall, in the case of a company registered in pursuance of this Part of this Act, where the application to stay or restrain is by a creditor, extend to actions and proceedings against any contributory of the company. 336. Where an order has been made for winding up a company registered in pursuance of this Part of this Act, no action or proceeding shall be commenced or proceeded with against the company or any contributory of the company in respect of any debt of the company, except by leave of the court. and subject to such terms as the court may impose, COMPANIES ACT, 1929 / Part X. WINDING UP OF UNREGISTERED COMPANIES. 337. For the purposes of this Part of this Act, the expression “unregistered company’ shall include any trustee savings bank certified under the Trustee Savings Banks Act, 1863, and any partnership, whether limited or not, any association and anv company with the following exceptions: — (1) a railway company incorporated by Act of Parliament, except in so far as is provided by the Abandonment of Railways Act, 1850, and the Abandonment of Railways Act, 1869, and any Acts amending them; a company registered in any part of the United Kingdom under the Joint Stock Companies Acts or under the Companies Act, 1862, or under the Companies (Consolidation) Act, 1908, or under this Act; (3) a partnership, association or company which consists of less than eight members and is not a foreign partnershir association or company, (4) a limited partnership registered in England or Northern Ireland. 338.—(1) Subject to the provisions of this Part of this Act, any unregistered company may be wound up under this Act, and all the provisions of this Act with respect to winding up shall apply to an unregistered company, with the following exceptions and additions: (a) If an unregistered company has a principal place of business situate in Northern Ireland, it shall not be wound up under this Part of this Act unless it has a principal place of business situate in England or Scotland or in both England and Scotland: An unregistered company shall, for the purpose of determining the court having jurisdiction in the matter of the winding up, be deemed to be registered in England or Scotland, according as its principal place of business is situate in England or Scotland, or if it has a principal place of business situate in both countries, to be registered in both countries and the principal place of business situate in that part of Great Britain in which proceedings are being instituted shall, for all the purposes of the winding up, be deemed to be the registered office of the company: No unregistered company shall be wound up under this Act voluntarily or subject to supervision: The circumstances in which an unregistered company be wound up are as follows: — (i) If the company is dissolved, or has ceased to carry on business, or is carrying on business only for the p= 33¢ of winding up its affairs; (ii) If the company is unable to pay its debts; (ii1) If the court is of opinion that it is just and equitable that the company should be wound war Meaning of unregistered company. 26 & 27 Vict. c. 87 ® \ > > ~ r » Vict, Ri; Winding up of anregistered companies. 722 SECRETARIAL PRACTICE (¢) An unregistered company shall, for the purposes of this Act, be deemed to be unable to pay its debts: — (i) If a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding fifty pounds then due, has served on the company, by leaving at its principal place of business, or by delivering to the secretary or some director, manager, or principal officet of the company, or by otherwise serving in such manne as the court may approve or direct, a demand under his hand requiring the company to pay the sum so due, and the company has for three weeks after the service of the demand neglected to pay the sum, or to secure o1 compound for it to the satisfaction of the creditor; (ii) If any action or other proceeding has been instituted against any member for any debt or demand due, or claimed to be due, from the company, or from him in his character of member, and notice in writing of the institution of the action or proceeding having been served on the company by leaving the same at its principal place of business, or by delivering it to the secretary, or some director, manager, or principal officer of the company, or by otherwise serving the same in such manner as the court may approve or direct, the company has not within ten days after service of the notice paid, secured, or compounded for the debt or demand, or procured the action or proceeding to be stayed, or indemnified the defendant to his reasonable satisfaction against the action or proceeding, and against all costs, damages, and expenses to be incurred bv him by reason of the same; (iii) If in England or Northern Ireland execution or other process issued on a judgment, decree, or order obtained in any court in favour of a creditor against the company, or any member thereof as such, or any person authorised to be sued as nominal defendant on behali of the company, is returned unsatisfied; (iv) If in Scotland the induci® of a charge for payment on an extract decree, or an extract registered bond, or an extract registered protest, have expired without payment being made; (v) If it is otherwise proved to the satisfaction of the court that the company is unable to pay its debts: The court having jurisdiction to wind up a railway company under the Abandonment of Railways Act, 1850, and the Abandonment of Railways Act, 1869, and the Acts amending them, shall be the High Court or the Court of Session, according as the railway was authorised to be made in England or Scotland, and the special provisions of those Acts shall apply to the winding up with the substitution of references to this Act for references to the Companies Acts, 1862 and 1867: 1 & h) COMPANIES ACT, 1920 723 Provided that, subject to any order made under section fifty-seven of the Supreme Court of Judicature (Consolidation) Act, 1925, and without prejudice to the power to make orders of transfer under that Act, the jurisdiction of the High Court under this provision shall be exercised by the Chancery Division of that Court and provision may be made by general rules for regulating the exercise of the said jurisdiction: A petition for winding up a trustee savings bank may be presented by the National Debt Commissioners, or by a commissioner appointed under the Trustee Savings Banks Act, 1887, as well as by any person authorised under the other provisions of this Act to present a petition for winding up a company: In the case of a limited partnership the provisions of this Act with respect to winding up shall apply with such modifications, if any, as may be provided by rules made by the Lord Chancellor with the concurrence of the President of the Board of Trade, and with the substitution of general partners for directors. 50 & 51 Vict Cc. 47 (2) Where a company incorporated outside Great Britain which has been carrying on business in Great Britain ceases to carry on business in Great Britain, it may be wound up as an unregistered company under this Part of this Act, notwithstanding that it has been dissolved or otherwise ceased to exist as a company under or by virtue of the laws of the countrv under which it was incorporated. (3) Nothing in this Part of this Act shall affect the operation of any enactment which provides for any partnership, association, or company, being wound up, or being wound up as a company or as an unregistered company, under any enactment repealed by this Act, except that references in any such first-mentioned enactment to any such repealed enactment shall be read as references to the corresponding provision (if any) of this Act. 339.—(1) In the event of an unregistered company being wound up, every person shall be deemed to be a contributory who is liable to pay or contribute to the payment of any debt or liability of the company, or to pay or contribute to the payment of any sum for the adjustment of the rights of the members among themselves, or to pay or contribute to the payment of the costs and expenses of winding up the company, and every contributory shall be liable to contribute to the assets of the company all sums due from him in respect of any such liability as aforesaid: Provided that, in the case of an unregistered company within the stannaries, a past member shall not be liable to contribute to the assets of the company if he has ceased to be a member for two years or more either before the mine ceased to be worked or before the date of the winding-up order. Contributories in winding up of unregistered company. 724 SECRETARIAL PRACTICE (2) In the event of the death, bankruptcy, or insolvency, of any contributory, or marriage of any female contributory, the provisions of this Act with respect to the personal representatives, to the heirs and legatees of heritage of the heritable estate in Scotland of deceased contributories, to the trustees of bankrupt or insolvent contributories, and to the liabilities of husbands and wives respectively, shall apply. Power of court to stay or restrain proceedings. Actions stayed on winding-up order. Provisions of Part X cumula-Hive. 340. The provisions of this Act with respect to staying and restraining actions and proceedings against a company at any time after the presentation of a petition for winding up and before the making of a winding-up order shall, in the case of an unregistered company, where the application to stay or retrain is by a creditor, extend to actions and proceedings against any contributory of the company. 341. Where an order has been made for winding up an unregistered company, no action or proceeding shall be proceeded with or commenced against any contributory of the company in respect of any debt of the company, except by leave of the court, and subject tc such terms as the court may impose. 342. The provisions of this Part of this Act with respect to unregistered companies shall be in addition to and not in restriction of any provisions hereinbefore in this Act contained with respect to winding up companies by the court, and the court or liquidator may exercise any powers or do any act in the case of unregistered companies which might be exercised or done by it or him in winding up companies formed and registered under this Act: Provided that an unregistered company shall not, except in the event of its being wound up, be deemed to be a company under this Act, and then only to the extent provided by this Part of this Act. Part XI. CoMPANIES INCORPORATED OUTSIDE GREAT GRITAIN CARRYING ON BUSINESS WITHIN GREAT BRITAIN. 343. This Part of this Act shall apply to all companies incorporated outside Great Britain which, affer the commencement of this Act, establish a place of business within Great Britain, and to all companies incorporated outside Great Britain which have, before the commencement of this Act, established a place of business within Great Britain and continue to have an established place of business within Great Britain at the commencement of this Act, Documents, &c., 344.—(1) Companies incorporated outside Great Britain which, 2 be delivered * after the commencement of this Act, establish a place of business companies I within Great Britain, shall within one month from the establishment ing on business of the place of business, deliver to the registrar of companies for in Great Britain. : . registration— COMPANIES ACT. 102q 728 a certified copy of the charter, statutes or memorandum and articles of the company, or other instrument constituting or defining the constitution of the company, and, if the instrument is not written in the English language, a certified translation thereof; a list of the directors of the company, containing such particulars with respect to the directors as are by this Act required to be contained with respect to directors in the register of the directors of a company; the names and addresses of some one or more persons resident in Great Britain authorised to accept on behalf of the company service of process and any notices required to be served on the company. (2) The following companies, namely :— (a) companies incorporated outside Great Britain which, before the first day of April, nineteen hundred and nine, established a place of business and at the commencement of this Act continue to have a place of business within Great Britain; companies incorporated in Northern Ireland before the first day of January, nineteen hundred and twenty-two, which at the commencement of this Act have a place of business within Great Britain: ‘c) companies incorporated in the Irish Free State which, before the twenty-seventh day of March, nineteen hundred and twenty-three, established a place of business and at the commencement of this Act continue to have a place of business within Great Britain: shall, withon one month from the commencement of this Act, deliver to the registrar for registration the documents and particulars specified in the last foregoing subsection. (3) Companies to which this Part of this Act applies, other than the companies mentioned in subsections (1) and (2) of this section, shall, if at the commencement of this Act they have not delivered to the registrar the documents and particulars specified in paragraphs (a), (b) and (¢) of subsection (1) of section two hundred and seventy-four of the Companies (Consolidation) Act, 1908, as amended by the Companies (Particulars as to Directors) Act, 1917, 7 & 8 Geo. 5, continue subject to the obligation to deliver those documents and 2% particulars in accordance with the said Acts. 345. A company incorporated in a British possession which has delivered to the registrar of companies— (1 in the case of a company to which subsection (i) or subsection (2) of the last foregoing section applies, tae documents and particulars specified in paragraphs (a), (b) and (¢’ of subsection (1) of that section: Power of companies incorporated in British possessions to hold lands. 726 SECRETARIAL PRACTICE (2) in the case of any other company to which this Part of this Act applies, the documents and particulars specified in paragraphs (a), (b) and (c) of subsection (1) of section two hundred and seventy-four of the Companies (Consolidation) Act, 1908, as amended by the Companies (Particulars as to Directors) Act, 1917; shall have the same power to hold lands in the United Kingdom as if it were a company incorporated under this Act: Provided that nothing in this section shall affect the power of a company to holds lands bv virtue of registration in Northern Ireland. ind 346. If in the case of any company to which this Part of this registrar where ACt applies any alteration is made in— dommes, Se. (1) the charter, statutes, or memorandum and articles of the company or any such instrument as aforesaid; or (2) the directors of the company or the particulars contained in the list of the directors; or (3) the names or addresses of the persons authorised to accept service on behalf of the company; the company shall, within the prescribed time, deliver to the registrar for registration a return containing the prescribed particulars of the alteration. Balance sheet of 347.—(1) Every company to which this Part of this Act applies company carry: shall in every calendar year make out a balance sheet in such form, ing on business on . : . n Great Britain. and containing such particulars and including such documents, as under the provisions of this Act it would, if it had been a company within the meaning of this Act, have been required to make out and lay before the company in general meeting, and deliver a copy of that balance sheet to the registrar for registration. (2) If any such balance sheet is not written in the English language, there shall be annexed to it a certified translation thereof, Obligation to 348. Every company to which this Part of this Act applies shall— ony of (1) in every prospectus inviting subscriptions for its shares ge Dita, or debentures in Great Britain state the country in which where incor- the company is incorporated; and porated. . _r » ; conspicuously exhibit on every place where it carries on business in Great Britain the name of the company and the country in which the company is incorporated; and cause the name of the company and of the country in which the company is incorporated to be stated in legible characters in all bill-heads and letter paper, and in all notices, advertisements, and other official publications of the company; and if the liability of the members of the company is limited, cause notice of that fact to be stated in legible characters (4) COMPANIES ACT, 10929 nor in every such prospectus as aforesaid and in all bill-heads, letter paper, notices, advertisements and other official publications of the company in Great Britain, and to baffixed on every place where it carries on its business 349. Any process or notice required to be served on a company Service on com: to which this Part of this Act applies shall be sufficintly served if pany to es addressed to any person whose name has been delivered to the registrar under this Part of this Act and left at or sent by post to the address which has been so dclivered: Provided that— (1) where any such company makes default in delivering to the registrar the name and address of a person resident in Great Britain who is authorised to accept on behalf of the company service of process or notices; or if at any time all the persons whose names and addresses have been so delivered are dead or have ceased so to reside, or refuse to accept service on behalf of the company, or for any reason cannot be served; a document may be served on the company by leaving it at or sending it by post to any place of business established bv the companv nn Great Britain. 350.—(1) Any document, which any company to which this Part of this Act applies is required to deliver to the registrar of companies, shall be delivered to the registrar at the registraton office in England or Scotland according as the company has established a place of business in England or Scotland, and if it has established or establishes a place of business both in England and in Scotland, the document shall be delivered at the registration office both in England and in Scotland, and references to the registrar of companies in this Part of this Act shall be construed accordingly: Provided that nothing in this Part of this Act shall operate to require any document to be delivered at any registration office if it has been delivered at that office before the commencement of this Act. Dffice where documents to be Aled (2) If any company to which this Part of this Act applies ceases to have a place of business in either part of Great Britain, it shall forthwith give notice of the fact to the registrar of companies for that part, and as from the date on which notice is so given the obligation of the companv to deliver anv document to the registrar shall cease 351. If any company to which this Part of this Act applies fails penatties to comply with any of the foregoing provisions of this Part of this Act the company, and every officer or agent of the company, shall be liable to a fine not exceeding fifty pounds, or, in the case of a continuing offence, five pounds for every day during which the default continues. 728 Interpretation 352. For the purposes of this Part of this Act:— of Pare XI. The expression ‘‘ certified” means certified in the prescribed manner to be a true copy or a correct translation; The expression ““ director” in relation to a company includes any person in accordance with whose directions or instructions the directors of the company are accustomed to act; The expression ‘“ place of business’ includes a share transfer or share registration office; The expression ‘‘ prospectus’ has the same meaning as when used in relation to a company incorporated under this Act. SECRETARIAL PRACTICE Special Provisions as to Companies incorporated in Channel Islands ov Isle of Man. Obligation of 353. Where a company incorporated in the Channel Islands or the company in- Isle of Man— corporated in Channel Islands (1) after the commencement of this Act establishes a, place of Pd mi Man business in England or Scotland; or ohra (2) has before the commencement of this Act established and at the commencement of this Act continues to have a place of business in England or Scotland; all the provisions of this Act requiring documents to be forwarded or delivered, to or filed with, the registrar of companies (other than provisions requiring the payment of a fee in respect of the registration of a company) shall apply to the company in like manner as if it were a company registered in England or Scotland, as the case may be, and if the company establishes places of business both in England and in Scotland the said provisions shall so apply as if the tompany were registered both in England and in Scotland: Provided that, in the case of a company which has established a place of business before the commencement of this Act, the time within which documents must be forwarded or delivered to, or filed with, the registrar shall run from the commencement of this Act. Part XII. RESTRICTIONS ON SALE OF SHARES AND OFFERS OF SHARES FOR SALE. Provigons with 354.—(1) It shall not be lawful for any person— respect to pro- 2 . 2 ff 4S . a. spectuses of (a) to issue, circulate or distribute in Great Britain any proog spectus offering for subscription shares in or debentures subscriptions for of a company incorporated or to be incorporated outside haves or offering Great Britain, whether the company has or has not established, or when formed will or will not establish, a place of business in Great Britain unless— COMPANIES ACT, 1929 729 (i) before the issue, circulation or distribution of the prospectus in Great Britain a copy thereof, certified by the chairman and two other directors of the company as having been approved by resolution of the managing body, has been delivered for registration to the registrar of companies; (ii) the prospectus states on the face of it that the copy has been so delivered; (iii) the prospectus is dated; (iv) the prospectus otherwise complies with this Part of this Act; or’ to issue to any person in Great Britain a form of application for share-s in or debentures of such a company or intended company as aforesaid, unless the form is issued with a prospectus which complies with this Part of this Act: Provided that this provision shall not apply if it is shown that the form of application was issued in connection with a bona fide invitation to a person to enter into an underwriting agreement with respect to the shares or debentures. (2) This section shall not apply to the issue to existing members or debenture holders of a company of a prospectus or form of application relating to shares in or debentures of the company, whether an applicant for shares or debentures will or will not have the right to renounce in favour of other persons, but, subject as aforesaid, this section shall apply to a prospectus or form of application whether issued on or with reference to the formation of a company or subsequently. (3) Where any document by which any shares in or debentures of a company incorporated outside Great Britain are offered for sale to the public would, if the company concerned had been a company within the meaning of this Act, have been deemed by virtue of section thirty-eight of this Act to be a prospectus issued by the company, that document shall be deemed to be, for the purposes of this section, a prospectus issued by the company. (4) An offer of shares or debentures for subscription or sale to any person whose ordinary business or part of whose ordinary business it is to buy or sell shares or debentures, whether as principal or agent, shall not be deemed an offer to the public for the purposes of this section. (5) Section thirty-seven of this Act shall extend to every prospectus to which this section applies. (6) Any person who is knowingly responsible for the issue, circulation or distribution of any prospectus, or for the issue of a form of application for shares or debentures, in contravention of the provisions of this section shall be liable to a fine not exceeding five hundred pounds. (7) In this and the next following section the expressions "“ prospectus,” ‘‘shares,” and ‘‘debentures’’ have the same meanings as when used in relation to a companv incorporated under this Act. 730 SECRETARIAL PRACTICE Requirements 355.—(1) In order to comply with this Part of this Act a proas to prospectus. 3 ce i . en spectus in addition to complying with the provisions of sub-paragraphs (ii) and (iii) of paragraph (a) of subsection (1) of the last foregoing section must— (@) contain particulars with respect to the following matters— (i) the objects of the company; (ii) the instrument constituting or defining the constitution of the company; (iii) the enactments, or provisions having the force of an enactment, by or under which the incorporation of the company was effected ; (iv) an address in Great Britain where the said instrument, enactments or provisions, or copies thereof, and if the same are in a foreign language a translation thereof certified in the prescribed manner, can be inspected; (v) the date on which and the country in which the company was incorporated; (vi) whether the company has established a place of business in Great Britain, and, if so, the address of its principal office in Great Britain: Provided that the provisions of sub-paragraphs (i), (ii), (iii) and (iv) of this paragraph shall not apply in the case of a prospectus issued more than two years after the date at which the company is entitled to commence business. subject to the provisions of this section, state the matters specified in Part I of the Fourth Schedule to this Act (other than those specified in paragraph 1 of the said Part I) and set out the reports specified in Part II of that Schedule subject always to the provisions contained in Part III of the said Schedule: Provided that— (i) where any prospectus is published as a newspaper advertisement, it shall be a sufficient compliance with the requirement that the prospectus must specify the objects of the company if the advertisement specifies the primary object with which the compnay was formed; and (ii) in paragraph 3 of Part I of the said Fourth Schedule a reference to the constitution of the company shall be substituted for the reference to the articles ; and (i1i) paragraph 1 of Part III of that Schedule shall have effect as if the reference to the memorandum were omitted therefrom. (2) Any condition requiring or binding any applicant for shares or debentures to waive compliance with any requirement of this section, or purporting to affect him with notice of any contract, document, or matter not specifically referred to in the prospectus, shall be void. (b) COMPANIES ACT, 1q02a 7,4 (3) In the event of non-compliance with or contravention of any of the requirements of this section, a director or other person responsible for the prospectus shall not incur any liability by reason of the non-compliance or contravention, if— (a) as regards any matter not diclosed, he proves that he was not cognisant thereof; or (b) he proves that the non-compliance or contravention arose from an honest mistake of fact on his part; or the non-compliance or contravention was in respect of matters which, in the opinion of the court dealing with the case, were immaterial or were otherwise such as ought, in the opinion of that court, having regard to all the circumstances of the case, reasonably to be excused: Provided that, in the event of failure to include in a prospectus a statement with respect to the matters contained in paragraph 15 of Part I of the Fourth Schedule to this Act, no director or other person shall incur any liability in respect of the failure unless it be proved that he had knowledge of the matters not disclosed. (4) Nothing in this section shall limit or diminish any liability which any person may incur under the general law or this Act. apart from this section 356.—(1) It shall not be lawful for any person to go from house Restrictions on to house offering shares for subscription or purchase to the public ofiering of shares . or subscription or any member of the public. or sale In this subsection the expression ‘“ house’ shall not include an office used for business purposes. (2) Subject as hereinafter provided in this subsection, it shall not be lawful to make an offer in writing to any member of the public (not being a person whose ordinary business or part of whose ordinary business it is to buy or sell shares, whether as principal or agent) of any shares for purchase, unless the offer is accompanied by a statement in writing (which must be signed by the person making the offer and dated) containing such particulars as are required by this section to be included therein and otherwise complying with the requirements of this section, or, in the case of shares in a company incorporated outside Great Britain, either by such a statement as aforesaid, or by such a prospectus as complies with this Part of this Act: Provided that the provisions of this subsection shall not apply— fa) where the shares to which the offer relates are shares which are quoted on, or in respect of which permission to deal has been granted by, any recognised stock exchange in Great Britain and the offer so states and specifies the stock exchange; or where the shares to which the offer relates are shares which a company has allotted or agreed to allot with a view to their being offered for sale to the public: or * LL PRY (c) SECRETARIAL PRACTICE where the offer was made only to persons with whom the person making the offer has been in the habit of doing regular business in the purchase or sale of shares. (3) The written statement aforesaid shall not contain any matter other than the particulars required by this section to be included therein, and shall not be in characters less large or less legible than any characters used in the offer or in any document sent therewith. (4) The said statement shall contain particulars with respect to the following matters— (@) whether the person making the offer is acting as principal or agent, and if as agent the name of his principal and an address in Great Britain where that principal can be served with process; the date on which and the country in which the company was incorporated and the address of its registered or principal office in Great Britain; the authorised share capital of the company and the amount thereof which has been issued, the classes into which it is divided and the rights of each class of shareholders in respect of capital, dividends and voting; the dividends, if any, paid by the company on each class of shares during each of the three financial years immediately preceding the offer, and if no dividend has been paid in respect of shares of any particular class during anv of those years, a statement to that effect: the total amount of any debentures issued by the company and outstanding at the date of the statement, together with the rate of interest payable thereon; (f) the names and addresses of the directors of the company; (g) whether or not the shares offered are fully paid up, and, if not, to what extent they are paid up; whether or not the shares are quoted on, or permission to deal therein has been granted by, any recognised stock exchange in Great Britain or elsewhere, and, if so, which, and, if not, a statement that they are not so quoted or that no such permission has been granted; where the offer relates to units, particulars of the name and addresses of the persons in whom the shares represented by the units are vested, the date of and the parties to any document defining the terms on which those shares are held, and an address in Great Britain where that document or a copy thereof can be inspected. In this subsection the expression ‘company’ means the company by which the shares to which the statement relates were or are to be issued. 1) COMPANIES ACT, 1020 733 (5) If any person acts, or incites, causes or procures any person to act, in contravention of this section, he shall be liable to imprisonment for a term not exceeding six months or to a fine not exceeding two hundred pounds or to both such imprisonment and fine, and in the case of a second or subsequent offence to imprisonment for a term not exceeding twelve months or to a fine not exceeding five hundred pounds, or to both such imprisonment and fine. (6) Where a person convicted of an offence under this section is a company (whether a company within the meaning of this Act or not), every director and every officer concerned in the management of the company shall be guilty of the like offence unless he proves that the act constituting the offence took place without his knowledge or consent, (7) In this section, unless the context otherwise requires, the expression ‘‘shares’”’ means the shares of a company, whether a company within the meaning of this Act or not, and includes debentures and units, and the expression “unit” means any right or interest (by whatever name called) in a share, and for the purposes of this section a person shall not in relation to a company be regarded as not being a member of the public by reason only that he is a holder of shares in the company or a purchaser of goods from the companv. (8) Where any person is convicted in England of having made an offer in contravention of the provisions of this section, the court before which he is convicted may order that any contract made as a result of the offer shall be void, and, where it makes any such order, may give such consequential directions as it thinks proper for the repayment of any money or the retransfer of any shares. Where the court makes an order under this subsection (whether with or without consequential directions) an appeal against the order and the consequential directions. if any. shall lie to the High Court. Aall TISCELLANEOUS. Prohibition of Partnerships with more than Twenty Members oo: 357. No company, association, or partnership consisting of more than twenty persons shall be formed for the purpose of carrying on any business (other than the business of banking) that has for its object the acquisition of gain by the company, association, or partnership, or by the individual members thereof, unless it is registered as a company under this Act, or is formed in pursuance of some other Act of Parliament, or of letters patent, or is a company engaged in working mines within the stannaries and subject to the jurisdiction of the court exercising the stannaries jurisdiction Prohibition of partnerships with more than twentv members SECRETARIAL PRACTICE Provisions velating to Banks. tr 358. No company, association, or partnership consisting of more ships with more than ten persons shall be formed for the purpose of carrying on the ian yon business of banking, unless it is registered as a company under this ’ Act, or is formed in pursuance of some other Act of Parliament, or of letters patent. OR Fegisiration 359.—(1) Where a banking company which was in existence on I oy “™ the seventh day of August, eighteen hundred and sixty-two, prolimited liability, poses to register as a limited company, it shall, at least thirty days ee be before so registering, give notice of its intention so to register to every customers. person who has a banking account with the company, either by delivery of the notice to him, or by posting it to him at. or delivering it at, his last known address. (2) If the company omits to give the notice required by this section, then, as between the company and the person for the time being interested in the account in respect of which the notice ought to have been given, and so far as respects the account down to the time at which notice is given, but not further or otherwise, the certificate of registration withlimited liability shall have no operation. / Liability of bank 360.—(1) A bank of issue registered under this Act as a limited of rose limited company shall not be entitled to limited liability in respect of its notes. notes, and the members thereof shall be liable in respect of its notes in the same manner as if it had been registered as unlimited: Provided that, if, in the event of the company being wound up, the general assets are insufficient to satisfy the claims of both the note-holders and the general creditors, then the members, after satisfying the remaining demands of the note-holders, shall be liable to contribute towards payment of the debts of the general creditors a sum equal to the amount received bv the note-holders out of the general assets. (2) For the purposes of this section, the expression ‘‘ the general assets” means the funds available for pavment of the general creditor as well as the note-holder. (3) Any bank of issue registered under this Act as a limited company may state on its notes that the limited liability does not extgnd to its notes, and that the members of the company are liable in respect of its notes in the same manner as if it had been registered as an unlimited company. Privileges of banks making annual return. 7 Geo. 4. c. 4F ~ Geo. 4. c. 67. % © Vict. c. 37. Vict. c. 38. 12 Vict. 361.—(1) Where a company carrying on the business of bankers has duly forwarded to the registrar of companies the annual return required by section one hundred and eight of this Act and has added hereto a statement of the names of the several places where it carries on business, the company— (a) shall not be required to furnish to the Commissioners of Inland Revenue any returns under the provisions of the Country Bankers Act, 1826, the Bankers (Scotland) Act, 1826, section twenty-one of the Bank Charter Act, 1844, or section thirteen of the Bank Notes (Scotland) Act 1845: and COMPANIES ACT, 1929 735 () shall be deemed to be a “bank’’ and ‘bankers’ within the meaning of the Bankers’ Books Evidence Act, 1879. (2) The fact of the said annual return and statement having been duly forwarded may be proved in any legal proceedings by the certificate of the registrar. Miscellaneous Offences. 362. If any person in any return, report, certificate, balance sheet, or other document, required by or for the purposes of any of the provisions of this Act specified in the Eleventh Schedule hereto, wilfully makes a statement false in any material particular, knowing it to be false, he shall be guilty of a misdemeanor, and shall be liable on conviction in Scotland on indictment to imprisonment for a term not exceeding two years, with or without hard labour, and be liable on summary conviction in England or Scotland to imprisonment for a term not exceeding four months, with or without hard labour, and in either case to a fine in lieu of or in addition to such imprisonment as aforesaid: Provided that-(a) the fine imposed on summary conviction shall not exceec one hundred pounds; nothing in this section shall affect the provisions of the 1&2Geo.s.c.6 Perjury Act, 911 363. If in Scotland any person, on examination on oath authorised under this Act or in any affidavit or deposition in or about the winding up of any company or otherwise in or about any matter arising under this Act, wilfully and corruptly gives false evidence. he shall be liable to the penalites for wilful perjury. Penalty for false statement. 364. If any person or persons trade or carry on business under any name or title of which ““ Limited,” or any contraction or imitation of that word, is the last word, that person or those persons shall, unless duly incorporated with limited liability, be liable to a fine not exceeding five pounds for every day upon which that name or title has been used. Penalty for improper use of word “Limited. General Provisions as to Offences 365.—(1) Where by any enactment in this Act it is provided that a company and every officer of the company who is in default shal be liable to a default fine, the company and every such officer shall, for every day during which the default, refusal or contravention continues, be liable to a fine not exceeding such amount as is specified in the said enactment, or, if the amount of the fine is not so specified. to a fine not exceeding five pounds. (2) For the purpose of any enactment in this Act which provides that an officer of a company who is in default shall be liable to a fine or penalty, the expression ‘‘officer who is in default’ means any director, manager, secretary or other officer of the company, who knowingly and wilfully authorises or permits the default, refusal or contravention mentioned in the enactment Provision with respect to default fines and meaning of '* officer in default 736 SECRETARIAL PRACTICE Prosecution of 366. All offences under this Act made punishable by any fine max Toy pes punish- be prosecuted under the Summary Jurisdiction Acts. Application of fines. 367. The court imposing any fine under this Act may direct that the whole or any part thereof shall be applied in or towards payment of the costs of the proceedings, or in or towards the rewarding the person on whose information or at whose suit the fine is recovered, and subject to any such direction all fines under this Act shall, notwithstanding anything in any other Act, be paid into the Exchequer. 368. Nothing in this Act relating to the institution of criminal proceedings by the Director of Public Prosecutions shall be taken ta preclude any person from instituting or carrying on any such proceedings. Saving as to private prosecutors, Saving for privileged communications. 369. Where proceedings are instituted under this Act against any person by the Director of Public Prosecutions or by or on behalf of the Lord Advocate, nothing in this Act shall be taken to require any person who has acted as solicitor for the defendant to disclose any privileged communication made to him in that capacity. Service of Documents and Legal Proceedings. Sepvjceet ocr 370.—(1) A document may be served on a company by leaving any. it at or sending it by post to the registered office of the company. (2) Where a company registered in Scotland carries on business in England, the process of any court in England may be served on the company by leaving it at or sending it by post to the principal place of business of the company in England, addressed to the manager or other head officer in England of the company. (3) Where process is served on a company under subsection (2) of this section, the person issuing out the process shall send a Copy thereof by post to the registered office of the company. Costs in actions by certain limited companies. Power of court to grant relief in certain cases. 371. Where a limited company is plantiff or pursuer in any action or other legal proceeding, any judge having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the company will be unable to pay the costs of the defendant if successful in his defence, require sufficient security to be given for those costs, and may stay all proceedings until the security is given. '372.—(1) If in any proceeding for negligence, default, breach of duty, or breach of trust against a person to whom this section applies it appears to the court hearing the case that that person is or may be liable in respect of the negligence, default, breach of duty or breach of trust, but that he has acted honestly and reasonably, and that, having regard to all the circumstances of the case, including those connected with his appointment, he ought fairly to be excused for the negligence, default, breach of duty or breach of trust, that court may relieve him, either wholly or partly, from his liability on such terms as the court mav think fit. COMPANIES ACT, 1929 737 (2) Where any person to whom this section applies has reason to apprehend that any claim will or might be made against him in respect of any negligence, default, breach of duty or breach of trust, he may apply to the court for relief, and the court on any such application shall have the same power to relieve him as under this section it would have had if it had been a court before which proceedings against that person for negligence, default, breach of duty or breach of trust had been brought. (3) Where any case to which subsection (1) of this section applies is being tried by a judge with a jury the judge, after hearing the evidence, may, if he is satisfied that the defendant ought in pursuance of that subsection to be relieved either in whole or in part from the liability sought to be enforced against him, withdraw the case in whole or in part from the jury and forthwith direct judgment to be entered for the defendant on such terms as to costs or otherwise as the judge may think proper. (4) The persons to whom this section applies are the following :— (a) directors of a company: (b) managers of a company: (¢' officers of a company: ‘a, persons employed by a company as auditors, whether thev are or are not officers of the company. 373. Orders made by the High Court under this Act may be Power to enforce enforced in the same manner as orders made in an action pending orders therein 374.—(1) The Court of Session may, by Act of Sederunt, make Rules of pro rules regulating the procedure in proceedings under this Act in the Srduse in Court of Session or in a sheriff court, including appeals from the cottand. sheriff court. (2) The power to make rules under this section includes pew. to make rules with respect to costs and fees 375.—(1) In the case of a company subject to the stannaries jurisdiction, the court exercising the stannaries jurisdiction shall have and exercise the like jurisdiction and powers, as well on the common law as on the equity side thereof, as the Court of the Vice-Warden of the stannaries possessed before the commencement of the Stannaries Court (Abolition) Act, 1896, by custom, usage, or statute in the case of unincorporated companies, but only so far as is consistent with the provisions of this Act and with the constitution of companies as prescribed or required by this Act. (2) For the purpose of giving fuller effect to that jurisdiction, all process issuing out of the said court, and all orders, rules, demands, notices, warrants, and summonses required or authorised by the practice of the court to be served on any company, whether registered or not registered, or on any member or contributory thereof, or on any officer, agent, director, manager, or servant thereof, may be served in any part of England without any special order of the Jurisdiction of stannaries court 738 SECRETARIAL PRACTICE judge for that purpose, or by such special order may be served in any part of the British Islands other than the Irish Free State, on such terms and conditions as the court may think fit: Provided that no such service of process out of the limits of the stannaries in any suit or plaint on the common law side of the court shall be effected without the special order of the judge made on a statement of the nature and object of the suit or plaint. (3) All decrees, orders, and judgments of the said court may be enforced in the same manner in which decrees, orders, and judgments of the Court of the Vice-Warden of the stannaries could before its abolition have been by law enforced, whether within or bevond the stannaries. General Provisions as to Board of Trade. Annualreportby 376. The Board of Trade shall cause a general annual report of Board of Trade. matters within this Act to be prepared and laid before both Houses of Parliament. Authentication of documents issued by Board of Trade. Orders and certificates of Board to be evidence. 377. Any approval, sanction, or licence, or revocation of licence, which under this Act may be given or made by the Board of Trade may be under the hand of a secretary or assistant secretary of the Board, or of any person authorised in that behalf by the President of the Board. 378.—(1) All documents purporting to be orders or certificates made or issued by the Board of Trade for the purposes of this Act and to be sealed with the seal of the Board, or to be signed by a secretary or assistant secretary of the Board, or any person authorised in that behalf by the President of the Board, shall be received in evidence and deemed to be such orders or certificates without further proof, unless the contrary is shown. (2) A certificate signed by the President of the Board of Trade tL-.t any order made, certificate issued, or act done, is the order certificate, or act of the Board. shall be conclusive evidence of the fact so certified. Power to alter 379.—(1) The Board of Trade may alter Table A, the form in ables and forms. the Seventh Schedule and the table of fees in the Tenth Schedule tc this Act, so that it does not increase the amount of fees payable to the registrar under the said Tenth Schedule, and may alter or add to Tables B, C, D and E in the First Schedule, and the forms in the Second and Sixth Schedules to this Act. (2) Any such table or form, when altered, shall be published in the London Gazette, and thenceforth shall have the same force as if it were included in one of the Schedules to this Act, but no alteration made by the Board of Trade in Table A shall affect any company registered before the alteration, or repeal, as respects that company, any portion of that Table. COMPANIES ACT, =r Interpretation. 380.—(1) In this Act, unless the context otherwise requires, the Interpretation following expressions have the meanings herebv assigned to them (that is to say): — ‘“ Annual return’’ means the return required to be made, in the case of a company having a share capital, under section one hundred and eight, and, in the case of a company not having a share capital, under section one hundred and nine, of this Act; ‘Articles’ means the articles of association of a company, as originally framed or as altered by special resolution, including, so far as they apply to the company, the regulations contained (as the case may be) in Table B in the Schedule annexed to the Joint Stock Companies Act, 1856, or in Table A in the First Schedule annexed to the Companies Act, 1862, or in that Table as altered in pursuance of section seventy-one of the last-mentioned Act, or in Table A in the First Schedule to the Companies (Consolidation) Act, 1908, or in that Table as altered in pursuance of section one hundred and eighteen of the last mentioned Act, or in Table A in the First Schedule to this Act; “Book and paper” and ‘book or paper’ include accounts, deeds, writings, and documents; “Company ’’ means a company formed and registered under this Act or an existing company; “Existing company’ means a company formed and registered under the Joint Stock Companies Acts, the Companies Act, 1862, or the Companies (Consolidation) Act, 1908, but does not include a company registered under the said enactments in Northern Ireland or the Irish Free State; “Company within the stannaries’ means a company engaged in or formed for working mines within the stannaries; “The court” used in relation to a company means the court having jurisdiction to wind up the company; “The court exercising the stannaries jurisdiction’ used in relation to any proceedings means the county court in which the jurisdiction formerly exercised by the court of the vice-warden of the stannaries in respect of those proceedings is for the time being vested; “Debenture” includes debenture stock, bonds and any other securities of a company whether constituting a chare- - the assets of the company or not; “Director” includes any person occupying the positior director by whatever name called; “Document” includes summons, notice order, and other lega. process, and registers; “The Gazette” means, as respects companies registered in England, the London Gazette and as respects companies registered in Scotland. the Edinbureh Gazette: 740 SECRETARIAL PRACTICE 20 & 21 Vict. C. 14. 20 & 21 Vict. C. 49. 21 & 22 Vict. Cc. OI. “General rules” means general rules made under section three hundred and five of this Act, and includes forms; ** Joint Stock Companies Acts’’ means the Joint Stock Companies Act, 1856, the Joint Stock Companies Acts, 1856, 1857, the Joint Stock Banking Companies Act, 18 57, and the Act to enable Joint Stock Banking Companies to be formed on the principle of limited liability or any one or more of those Acts, as the case may require; but does not include the Act passed in the eighth year of the reign of Her Majesty Queen Victoria, chapter one hundred and ten, intituled An Act for the Registration, Incorporation, and Regulation of Joint Stock Companies; “Memorandum” means the memorandum of association of a company, as originally framed or as altered in pursuance of any enactment; Prescribed” means as respects the provisions of this Act relating to the winding-up of companies, prescribed by general rules, and as respects the other provisions of this Act, prescribed by the Board of Trade: “Prospectus” means any prospectus, notice, circular, advertisement, or other invitation, offering to the public for subscription or purchase any shares or debentures of a company; “Real and personal,” as respects Scotland, means heritable and moveable; “The registrar of companies,” or, when used in relation to registration of companies, “the registrar,” means the registrar or other officer performing under this Act the duty of registration of companies in England or Scotland. or in the stannaries, as the case requires; ‘Share’ means share in the share capital of a company, and includes stock except where a distinction between stock and shares is expressed or implied; “Table A” means Table A in the First Schedule to this Act. l¢ (2) A person shall not be deemed to be within the meaning of any provision in this Act a person in accordance with those directions or instructions the directors of a company are accustomed to act, by reason only that the directors of the company act on advice given by him in a professional capacity. Repeal, Savings, Extent, Short Title and Commencement. Repeal. 52 & 53 Vict. C. 63. 381.—(1) The enactments mentioned in the First Part of the Twelfth Schedule to this Act are hereby repealed to the extent specified in the third column of that Part. (2) Without prejudice to the provisions of section thirty-eight of the Interpretation Act, 1889— COMPANIES ACT, 1929 741 nothing in this repeal shall affect any Order in Council, order, rule, regulation, scale of fees, appointment, conveyance, mortgage, deed or agreement made, resolution passed, direction given, proceeding taken, instrument issued or thing done under any former enactment relating to companies, but any such Order in Council, order, rule, regulation, scale of fees, appointment, conveyance, mortgage deed, agreement, resolution, direction, proceeding, instrument or thing shall, if in force at the commencement of this Act, continue in force, and so far as it could have been made, passed, given, taken, issued or done under this Act shall have effect as if made, passed, given, taken, issued or done under this Act: Provided that any rule made under section two hundred and thirty-eight of the Companies (Consolidation) Act, 1908, shall be deemed to have been made, in the case of a rule made with respect to fees in the High Court under section two hundred and thirteen of the Supreme Court of Judicature (Consolidation) Act, 1925, and with repect to any other matter in the High Court under section ninety-nine of that Act, and, in the case of a rule made with respect to proceedings in the court exercising the stannaries jurisdiction, under section one hundred and sixty-four of 28 & zg Vict the County Courts Act, 1888; ©. 7% any document referring to any former enactment relating 34 & 5s Viet to companies shall be construed as referring to the corre- = ° sponding enactment of this Act; any person appointed to any office under or by virtue of any former enactment relating to companies shall be deemed to have been appointed to that office under or by virtue of this Act; any register kept under any former enactment relating to companies shall be deemed part of the register to be kept under the corresponding provisions of this Act; all funds and accounts constituted under this Act shall be deemed to be in continuation of the corresponding funds and accounts constituted under the former enactments relating to companies. (3) In this section the expression ‘former enactment relating to companies’ means any enactment repealed by this 4~t and anv enactment repealed by the Companies {Consolidation} ~ct. © = (a) 51 & 52 Vict. Cc. 43. Saving of pending proceedings for winding up. Application to Ireland. 382. Nothing in this Act shall affec (1) The incorporation of any company registered under any enactment hereby repealed: Table B in the schedule annexed to the Joint Stock Com- & 0G panies Act, 1856, or any part thereof, so far as the same 8 hye. applies to any comnanv. existing at the commencement of thie A Short title and rommencement 742 (3) 4, 5) (6) (7) SECRETARIAL PRACTICE Table A in the First Schedule annexed to the Companies Act, 1862, or any part thereof, either as originally contained in that schedule or as altered in pursuance of section seventy-one of that Act, so far as the same applies to any company existing at the commencement of this Act; Table A in the First Schedule to the Companies (Consolidation) Act, 1908, or any part thereof, either as originally contained in that Schedule or as altered in pursuance of section one hundred and eighteen of that Act, so far as the same applies to any company existing at the commencement of this Act; The enactments set out in the second Part of the Twelfth Schedule to this Act, being the enactments continued in force by section two hundred and five of the Companies Act, 1862; The power of a company to alter its memorandum under the provisions of section three of the Mortgage Debenture Act, 1865; The provisions of section five of the Trade Union Act, 1871: Provided that the reference in that section to the Companies Acts, 1862 and 1867, shall be read as a reference to this Act. 383. The provisions of this Act with respect to winding up shall not apply to any company of which the winding up has commenced before the commencement of this Act, but every such company shall be wound up in the same manner and with the same incidents as if this Act had not passed, and, for the purposes of the winding up, the Act or Acts under which the winding up commenced shall be deemed to remain in full force. 384.—(1) Nothing in this Act, except the provisions thereof which relate expressly to companies registered or incorporated in Northern Ireland or outside Great Britain, shall apply to or in relation to companies registered or incorporated in Northern Ireland. (2) Nothing in this Act, except where it is expressly provided to the contrary, shall affect the law in force in Northern Ireland at the commencement of this Act. 385.—(1) This Act may be cited as the Companies Act, 1929. (2) This Act shall come into operation on the first day on which, by virtue of Orders made by His Majesty in Council under subsection (4) of section one hundred and eighteen of the Companies Act, 1928, all the provisions of that Act will be in operation. COMPANIES ACT, 1929 - SCHEDULES FIRST SCHEDULE. "ABLE .. REGULATIONS FOR MANAGEMENT OF A COMPANY LIMITED BY SHARES. Sections §, 115, 333, 379, 380. Preliminary. (. In these regulations: — “The Act” means the Companies Act, 1929. When any provision of the Act is referred to, the reference is to that provision as modified bv any statute for the time being in force. Unless the context otherwise requires, expressions defined in the Act or any statutory modification thereof in force at the date at which these regulations become binding on the company. shall have the meanings so defined. Shares. 2. Subject to the provisions, if any, in that behalf of the memorandum of association, and without prejudice to any special rights previously conferred on the holders of existing shares, any share may be issued with such preferred, deferred, or other special rights, or such restrictions, whether in regard to dividend, voting, return of share capital, or otherwise, as the company may from time to time by special resolution determine, and any preference share may, with the sanction of a special resolution, be issued on the terms that it is, or at the option of the company is liable, to be redeemed. 3. If at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may be varied with the consent in writing of the holders of three-fourths of the issued shares of that class, or with the sanction of an extraordinary resolution passed at a separate general meeting of the holders of the shares of the class. To every such separate general meeting the provisions of these regulations relating to general meetings shall mutatis mutandis apply, but so that the necessary quorum shall be two persons at least holding or representing by proxy one-third of the issued shares of the class and that any holder of shares of the class present in person or by proxv mav demand a poll 744 SECRETARIAL PRACTICE 4. Every person whose name is entered as a member in the register of members shall, without payment, be entitled to a certificate under the seal of the company specifying the share or shares held by him and the amount paid up thereon, provided that in respect of a share or shares held jointly by several persons the company shall not be bound to issue more than one certificate, and delivery of a certificate for a share to one of several joint holders shall be sufficient delivery to all. 5. If a share certificate is defaced, lost, or destroyed, it may be renewed on payment of such fee, if any, not exceeding one shilling, and on such terms, if any, as to evidence and indemnity, as the directors think fit. 6. No part of the funds of the company shall directly or indirectly be employed in the purchase of, or in loans upon the security of, the company’s shares, but nothing in this regulation shall prohibit transactions mentioned in the proviso to section 45 (1) of the Act Lien. 7. The company shall have a lien on every share (not being a fully paid share) for all moneys (whether presently payable or not) called or payable at a fixed time in respect of that share, and the company shall also have a lien on all shares (other than fully paid shares) standing registered in the name of a single person for all moneys presently payable by him or his estate to the company; but the directors may at any time declare any share to be wholly or in part exempt from the provisions of this regulation. The company’s lien, if any, on a share shall extend to all dividends payable thereon. 8. The company may sell, in such manner as the directors think fit, any shares on which the company has a lien, but no sale shall be made unless some sum in respect of which the lien exists is presently payable, nor until the expiration of fourteen days after a notice in writing, stating and demanding payment of such part of the amount in respect of which the lien exists as is presently payable, has been given to the registered holder for the time being of the share, or the person entitled thereto by reason of his death or bankruptcy. 9. For giving effect to any such sale the directors may authorise some person to transfer the shares sold to the purchaser thereof The purchase shall be registered as the holder of the shares comprised in any such transfer and he shall not be bound to see to the application of the purchase money, nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings in reference to the sale. 10. The proceeds of the sale shall be received by the company and applied in payment of such part of the amount in respect of which the lien exists as is presently payable, and the residue shall (subject to a like lien for sums not presently payable as existed upon the shares prior to the sale) be paid to the person entitled to the shares at the date of the sale. COMPANIES ACT, 192¢ 7 ¢, Calls on Shares. 11. The directors may from time to time make calls upon the members in respect of any moneys unpaid on their shares provided that no call shall exceed one-fourth of the nominal amount of the share, or be payable at less than one month {rom the last call; and each member shall (subject to receiving at least fourteen days’ notice specifying the time or times of payment) pay to the company at the time or times so specified the amount called on his shares. 12. The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof. 13. If a sum called in respect of a share is not paid before or on the day appointed for payment thereof, the person from whom the sum is due shall pay interest upon the sum at the rate of five pounds per centum per annum from the day appointed for the payment thereof to the time of the actual payment, but the directors shall be at liberty to waive pavment of that interest whollv or in part. 14. The provisions of these regulations as to the liability of joint holders and as to payment of interest shall apply in the case of nonpayment of any sum which, by the terms of issue of a share, becomes payable at a fixed time, whether on account of the amount of the share, or by way of premium, as if the same had become pavable by virtue of a call duly made and notified. 15. The directors may make arrangements on the issue of shares for a difference between the holders in the amount of calls to be paid and in the times of payment. 16. The directors may, if they think fit, receive from any member willing to advance the same all or any part of the moneys uncalled and unpaid upon any shares held by him; and upon all or any of the moneys so advanced may (until the same would, but for such advance, become presently payable) pay interest at such rate (not exceeding, without the sanction of the company in general meeting, six per cent.) as may be agreed upon between the member paying the sum in advance and the directors Transfer and Transmission of Shaves. 17. The instrument of transfer of any share shall be executed by or on behalf of the transferor and transferee, and the transferor shall be deemed to remain a holder of the share until the name of the transferee is entered in the register of members in respect thereof. 18. Shares shall be transferred in the following form, or in anv usual or common form which the directors shall approve: , in consideration of the sum paid to me by C.D. of (hereinafter called ‘‘ the said transferee’’) do hereby transfer to the said transferee the share [or shares] numbered in the undertaking called the Companv. Limited. to hold unto [ 746 SECRETARIAL PRACTICE the said transferee, subject to the several conditions on which I hold the same: and I, the said transferee, do hereby agree to take the said share [or shares] subject to the conditions aforesaid. As witness our hands the day of Witness to the signatures, of &c. 19. The directors may decline to register any transfer of shares, not being fully paid shares, to a person of whom they do not approve, and may also decline to register any transfer of shares on which the company has a lien. The directors may also suspend the registration of transfers during the fourteen days immediately preceding the ordinary general meeting in each year. The directors may decline to recognise any instrument of transfer unless— (a) a fee not exceeding two shillings and sixpence is paid tc the company in respect thereof, and the instrument of transfer is accompanied by the certificate of the shares to which it relates, and such other evidence as the directors may reasonably require to show the right of the transferor to make the transfer. (0) If the directors refuse to register a transfer of any shares, they shall within two months after the date on which the transfer was lodged with the company send to the transferee notice of the refusal 20. The legal personal representatives of a deceased sole holder of a share shall be the only persons recognised by the company as having any title to the share. In the case of a share registered in the names of two or more holders, the survivors or survivor, or the legal personal representatives of the deceased survivor, shall be the only persons recognised by the company as having any title to the share. 2I. Any person becoming entitled to a share in consequence of the death or bankruptcy of a member shall, upon such evidence being produced as may from time to time be properly required by the directors, have the right, either to be registered as a member in respect of the share or, instead of being registered himself, to make such transfer of the share as the deceased or bankrupt person could have made; but the directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the share by the deceased or bankrupt person before the death or bankruptcy. 22. A person becoming entitled to a share by reason of the death or bankruptcy of the holder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the share, except that he shall not, before being registered as a member in respect of the share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the company. COMPANIES ACT, 1929 / Forfeiture of Shaves. 23. If a member fails to pay any call or instalment of a call on the day appointed for payment thereof, the directors may, at any time thereafter during such time as any part of such call or instalment remains unpaid, serve a notice on him requiring payment of so much of the call or instalment as is unpaid, together with anv interest which mav have accrued. 24. The notice shall name a further day (not earlier than the expiration of fourteen days from the date of the notice) on or before which the payment required by the notice is to be made, and shall state that in the event of non-payment at or before the time appointed the shares in respect of which the call was made will be liable to be forfeited. 25. If the requirements of any such notice as aforesaid are not complied with, any share in respect of which the notice has been given may at any time thereafter, before the payment required by the notice has been made, be forefeited by a resolution of the directors to that effect. 26. A forfeited share may be sold or otherwise disposed of on such terms and in such manner as the directors think fit, and at any time before a sale or disposition the forfeiture mav be cancelled on such terms as the directors think fit. 27. A person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares, but shall, notwithstanding, remain liable to pay to the company all moneys which, at the date of forfeiture, were presently payable by him to the company in respect of the shares, but his liability shall cease if and when the company receive pavment in full of the nominal amount of the shares. 28. A statutory declaration in writing that the declarant is a director of the company, and that a share in the company has been duly forfeited on a date stated in the declaration, shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the share. The company may receive the consideration, if any, given for the share on any sale or disposition thereof and may execute a transfer of the share in favour of the person to whom the share is sold or disposed of and he shall thereupon be registered as the holder of the share, and shall not be bound to see to the application of the purchase money, if any, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture. sale or disposal of the <hare 29. The provisions of these regulations as to forfeiture shall apply in the case of non-payment of any sum which, by the terms of issue of a share, becomes payable at a fixed time, whether on account of the amount of the share, or by way of premium, as if the same had been pavable bv virtue of a call dulv made and notified. 748 SECRETARIAL PRACTICE Conversion of Shaves into Stock. 30. The company may by ordinary resolution convert any paid-up shares into stock, and reconvert anv stock into paid-up shares of any denomination. 31. The holders of stock may transfer the same, or any part thereof, in the same manner, and subject to the same regulations, as, and subject to which, the shares from which the stock arose might previously to conversion have been transferred, or as near thereto as circumstances admit; but the directors may from time to time fix the minimum amount of stock transferable, and restrict or forbid the transfer of fractions of that minimum, but the minimum shall not exceed the nominal amount of the shares from which the stock arose. 32. The holders of stock shall, according to the amount of the stock held by them, have the same rights, privileges, and advantages as regards dividends, voting at meetings of the company, and other matters as if they held the shares from which the stock arose, but no such privilege or advantage (except participation in the dividends and profits of the company) shall be conferred by any such aliquot part of stock as would not, if existing in shares, have conferred that privilege or advantage. 33. Such of the regulations of the company as are applicable to paid-up shares shall apply to stock, and the words ‘“share’” and “shareholder” therein shall include “stock” and “stockholder.” Alteration of Capital. 34. The company may from time to time by ordinary resolution increase the share capital by such sum, to be divided into shares of such amount, as the resolution shall prescribe. 35. Subject to any direction to the contrary that may be given by the company in general meeting, all new shares shall, before issue, be offered to such persons as at the date of the offer are entitled to receive notices from the company of general meetings in proportion, as nearly as the circumstances admit, to the amount of the existing shares to which they are entitled. The offer shall be made by notice specifying the number of shares offered, and limiting a time with which the offer, if not accepted, will be deemed to be declined, and after the expiration of that time, or on the receipt of an intimation from the person to whom the offer is made that he declines to accept the shares offered, the directors may dispose of those shares in such manner as they think most beneficial to the company. The directors may likewise so dispose of any new shares which (by reason of the ratio which the new shares bear to shares held by persons entitled to an offer of new shares) cannot, in the opinion of the directors, be conveniently offered under this article. 36. The new shares shall be subject to the same provisions with reference to the payment of calls, lien, transfer, transmission, forfeiture, and otherwise as the shares in the original share capital. COMPANIES ACT, 1929 = * 37. The company may by ordinary resolution— (a) Consolidate and divide all or any of its share capital into shares of larger amount than its existing shares; ¥ Sub-divide its existing shares, or any of them, into shares of smaller amount than is fixed by the memorandum of association subject, nevertheless, to the provisions of section 50 (1) (d) of the Act; Cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person. 38. The company may by special resolution reduce its share capital and any capital redemption reserve fund in any manner and with, and subject to, anv incident authorised. and consent required, by law. a General Meetings. 39. A general meeting shall be held once in every calendar year at such time (not being more than fifteen months after the holding of the last preceding general meeting) and place as may be prescribed by the company in general meeting, or, in default, at such time in the third month following that in which the anniversary of the company’s incorporation occurs, and at such place, as the directors shall appoint. In default of a general meeting being so held, a general meeting shall be held in the month next following, and may be convened by any two members in the same manner as nearly as possible as that in which meetings are to be convened bv the directors. 40. The above-mentioned general ordinary general meetings; all other called extraordinary general meetings 41. The directors may, whenever they think fit, convene an extraordinary general meeting, and extraordinary general meetings shall also be convened on such requisition, or, in default, may be convened by such requisitionists, as provided by section 114 of the Act. If at any time there are not within the United Kingdom sufficient directors capable of acting to form a quorum, any director or any two members of the company may convene an extraordinary general meeting in the same manner as nearly as possible as that in which meetines mav be convened bv the directors Notice of General Meetings. 42. Subject to the provisions of section 117 (2) of the Act relating to special resolutions, seven days’ notice at the least (exclusive of the day on which the notice is served or deemed to be served, but inclusive of the day for which notice is given) specifying the place, the day, and the hour of meeting and, in case of special business, the general nature of that business shall be given in manner hereinafter mentioned, or in such other manner, if any, as may be pre scribed bv the company in general meeting. to such persons as are 750 SECRETARIAL PRACTICE under the regulations of the company, entitled to receive such notices from the company; but with the consent of all the members entitled to receive notice of some particular meeting, that meeting may be convened by such shorter notice and in such manner as those members may think fit. 43. The accidental omission to give notice of a meeting to, or the non-receipt of notice of a meeting by, anv member shall not invalidate the proceedings at any meeting. Proceedings at General Meetings. 44. All business shall be deemed special that is transacted at an extraordinary meeting, and all that is transacted at an ordinary meeting, with the exception of sanctioning a dividend, the consideration of the ‘accounts, balance sheets, and the ordinary report of the directors and auditors, the election of directors and ‘other officers in the place of those retiring by rotation, and the fixing of the remuneration of the auditors. 45. No business shall be transacted at any general meeting unless a quorum of members is present at the time when the meeting proceeds to ‘business; save as herein otherwise provided, three members personally present shall be a quorum. 46. If within half an hour from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall be dissolved; in any other case it shall stand adjourned to the same day in the next week, at the same time and place, and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting the members present shall be a quorum. . 47. The chairman, if any, of the board of directors shall preside as chairman at every general meeting of the company. . 48. If there is no such chairman, or if at any meeting he is not present within fifteen minutes after the time appointed for holding the meeting or is unwilling to act as chairman, the members present shall choose some one of their number to be chairman. - 49. . The chairman may, with the consent of any meeting at which a quorum is present (and shall if so directed by the meeting), adjourn the meeting from time to time and from place to place, but no business shall be transacted at any. adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a meeting is adjourned for ten days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid it shall not be necessary to'give any notice of an adjournment or of the business to be transacted ‘at ‘an adjourned meeting: 50. At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded by at least three members present in person or by proxy entitled to vote or bv one member or two members so present and entitled, COMPANIES ACT, 1929 751 if that member or those two members together hold not less than 15 per cent. of the paid up capital of the company, and, unless a poll is so demanded, a declaration by the chairman that a resolution has, on a show of hands, been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the book of the proceedings of the company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favour of, or against, that resolution. st, If a poll is duly demanded it shall be taken in such manner as the chairman directs, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. 52. In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded. shall be entitled to a second or casting vote. 53. A poll demanded on the election of a chairman or on a question of adjournment, shall be taken forthwith. A poll demanded on any other question shall be taken at such time as the chairman of the meeting directs. Votes of Members. 54. On a show of hands every member present in person shall have one vote. On a poll every member shall have one vote for each share of which he is the holder. 55. In the case of joint holders the vote of the senior who tenders a vote whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders; and for this purpose seniority shall be determined by the order in which the names stand in the register of members. 56. A member of unsound mind, or in respect of whom an order has been made by any court having jurisdiction in lunacy, may vote, whether on a show of hands or on a poll, by his committee, curator bonis, or other person in the nature of a committee or curator bonis appointed by that court, and any such committee, curator bonis. or other person may, on a poll, vote by proxy. 57. No member shall be entitled to vote at any general meeting unless all calls or other sums presently payable by him in respect of shares in the company have been paid. 58. On a poll votes may be given either personally or by proxy. . 59. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing, or, if the appointor is a corporation, either under seal, or under the hand of an officer or attorney duly authorised. A proxy need not be a member of the company. 60. The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority shall be deposited at the registered office of the companv not less than fortv-eicht hours 752 SECRETARIAL PRACTICE before the time for holding the meeting or adjourned meeting, at which the person named in the instrument proposes to vote, and in default the instrument of proxy shall not be treated as valid. 61. An instrument appointing a proxy may be in the following form, or any other form which the directors shall approve :— Company, Limited , being a membet Company, Limited, ., of , as my proxy, to vote for me and on my behalf at the [ordinary or extraordinary, as the case may be] general meeting of the company to be held on the day of and at any adjournment thereof.” Signed this day of .s 62. The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll. ‘c 1. in the county of of the hereby appoint of Corporations acting by Representatives at Meetings. 63. Any corporation which is a member of the company may by resolution of its directors or other governing body authorise such person as it thinks fit to act as its representative at any meeting of the company or of any class of members of the company, and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual member of the company. Daivectors. 64. The number of the directors and the names of the first directors shall be determined in writing by a majority of the subscribers of the memorandum of association. 65. The remuneration of the directors shall from time to time be determined by the company in general meeting. - 66. The qualification of a director shall be the holding of at least one share in the company. Powers and Duties of Directors. 67. The business of the company shall be managed by the directors, who may pay all expenses incurred in getting up and registering the company, and may exercise all such powers of the company, as are not, by the Act, or by these articles, required to be exercised by the company in general meeting, subject, nevertheless, to any regulation of these articles, to the provisions of the Act, and to such regulations, being not inconsistent with the aforesaid regulations or provisions, as may be prescribed by the company in general meeting; but no regulation made by the company in general meeting shall invalidate any prior act of the directors which would have been valid if that regulation had not been made COMPANIES ACT. 1029 75 68. The directors may from time to time appoint one or more of their body to the office of managing director or manager for such term and at such remuneration (whether by way of salary, or commission, or participation in profits, or partly in one way and partly in another) as they may think fit, and a director so appointed shall not, while holding that office, be subject to retirement by rotation, or taken into account in determining the rotation or retirement of directors; but his appointment shall be subject to determination ipso facto if he ceases from any cause to be a director, or if the company in general meeting resolve that his tenure of the office of managing director or manager be determined. 69. The amount for the time being remaining undischarged of moneys borrowed or raised by the directors for the purposes of the company (otherwise than by the issue of share capital) shall not at any time exceed the issued share capital of the company without the sanction of the company in general meeting. 70. The directors shall cause minutes to be made in books provided for the purpose— (a) Of all appointments of officers made by the directors; () Of the names of the directors present at each meeting of the directors and of any committee of the directors; Of all resolutions and proceedings at all meetings of the company, and of the directors. and of committees of directors: and every director present at any meeting of directors or committee of directors shall sign his name in a book to be kept for that purpose. The Seal. 71. The seal of the company shall not be affixed to any instrument except by the authority of a resolution of the board of directors, and in the presence of a director and of the secretary or such other person as the directors may appoint for the purpose; and that director and the secretary or other person as aforesaid shall sign every instrument to which the seal of the companv is so affixed in their presence Disqualification of Directors. 72. The office of director shall be vacated, if the director— (a) ceases to be a director by virtue of section 141 of the Act; or (b) without the consent of the company in general meeting holds any other office of profit under the company except that of managing director or manager; or becomes bankrupt; or becomes prohibited from being a director by reason of any order made under sections 217 or 275 of the Act; or 1s found lunatic or becomes of unsound mind: or 754 SECRETARIAL PRACTICE resigns his office by notice in writing to the company; or is directly or indirectly interested in any contract with the company or participates in the profits of anv contract with the company. Provided, however, that a director shall not vacate his office “by reason of his being a member of any corporation which has entered into contracts with or done any work for the company if he shall have declared the nature of his interest in manner required by section 149 of the Act, but the director shall not vote in respect of any such contract or work or any matter arising thereout, and if he does so vote his vote shall not be counted. 6) (8) Rotation of Directors. 73. At the first ordinary general meeting of the company the whole of the directors shall retire from office, and at the ordinary general meeting in every subsequent year one-third of the directors for the time being, or, if their number is not three or a multiple of three. then the number nearest one-third, shall retire from office. 74. The directors to retire in every year shall be those who have been longest in office since their last election but as between persons who became directors on the same day those to retire shall (unless they otherwise agree among themselves) be determined by lot. 75. A retiring director shall be eligible for re-election. 76. The company at the general meeting at which a director retires in manner aforesaid may fill up the vacated office by electing a person thereto and in default the retiring director shall be deemed to have been re-elected unless at such meeting it is resolved not tc fill up such vacated office. 77. The company may from time to time in general meeting increase or reduce the number of directors, and may also determine in what rotation the increased or reduced number is to go out of sffice. 78. Any casual vacancy occurring in the board of directors may be filled up by the directors, but the person so chosen shall be subject to retirement at the same time as if he had become a director on the day on which the director in whose place he is appointed was last elected a director. 79. The directors shall have power at any time, and from time to time, to appoint a person as an additional director who shal retire from office at the next following ordinary general meeting but shall be eligible for election by the company at that meeting as an additional director. 80. The company may by extraordinary resolution remove any director before the expiration of his period of office, and may by an ordinary resolution appoint another person in his stead. The person so appointed shall be subject to retirement at the ‘same time as if he had become a director on the day on which the director in whose place he is appointed was last elected a director. COMPANIES ACT, 1929 / Proceedings of Directors 81. The directors may meet together for the despatch of business, adjourn, and otherwise regulate their meetings, as they think fit. Questions arising at any meeting shall be decided by a majority of votes. In case of an equality of votes the chairman shall have a second or casting vote. A director may, and the secretary on the requisition of a director shall, at anv time summon a meeting of the directors. 82. The quorum necessary for the transaction of the business of tie directors may be fixed by the directors, and unless so fixed shall when the number of directors exceeds three be three, and when the number of directors does not exceed three, be two. 83..The continuing directors may act notwithstanding any vacancy in their body, but, if and so long as their number is reduced below the number fixed by or pursuant to the regulations of the company as the necessary quorum of directors, the continuing directors may act for the purpose of increasing the number of directors to that number, or of summoning a general meeting of the company. but for no other purpose. 84. The directors may elect a chairman of their meetings and determine the period for which he is to hold office; but if no such chairman is elected, or if at any meeting the chairman is not present within five minutes after the time appointed for holding the same, the directors present mav choose one of their number to be chairman nf the meeting. 85. The directors may delegate any of their powers to committees consisting of such member or members of their body as they think fit; any committee so formed shall in the exercise of the powers so delegated conform to anv regulations that mav be imposed on it bv the directors. 86. A committee may elect a chairman of its meetings; if no such ‘chairman is elected, or if at any meeting the chairman is not present within five minutes after the time appointed for holding the same, the members present may choose one of their number to be chairman of the meeting. 87. A committee may meet and adjourn as it thinks proper. Questions arising at any meeting shall be determined by a majority of votes of the members present, and in case of an equality of votes tie chairman shall have a second or casting vote. 88. ‘All acts done by any meeting of the directors or of a committee of directors, or by any person acting as a director, shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such director or person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such person had been dulv appointed and was aaalified to be a director - 4) SECRETARIAL PRACTICE Dividends and: Reserve. ~ 89. The company in general meeting may declare dividends, but no dividend shall exceed the amount recommended by the directors. 96. The directors may from time to time pay t& the members such interim dividends as appear to the directors to be justified by the profits of the company. 91. No dividend shall be paid otherwise than out of profits. 92. Subject to the rights of persons, if any, entitled to shares with special rights as to dividends, all dividends shall be declared and paid according to the amounts paid on the shares, but if and so long as nothing is paid up on any of the shares in the company dividends may be declared and paid according to the amounts of the shares. No amount paid on a share in advance of calls shall, while carrying interest, be treated for the purposes of this article as paid on the share. 93. The directors may, before recommending any dividend, set aside out of the profits of the company such sums as they think pIOPEr as a reserve or reserves which shall, at the discretion of the directors, be applicable for meeting contingencies, or for equalising dividends, or for any other purpose to which the profits of the company may be properly applied, and pending such application may, at the like discretion, either be employed in the business of the company or be invested in such investments (other than shares of the company) as the directors may from time to time think fit. 94. If several persons are registered as joint holders of any share, any one of them may give effectual receipts for any dividend or other moneys payable on or in respect of the share. 95. Any dividend may be paid by cheque or warrant sent through the post to the registered address of the member or person entitled thereto or in the case of joint holders to any one of such joint holders at his registered address or to such person and such address as the member or person entitled or such joint holders as the case may Je may direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent or to the order of such other person as the member or person entitled or such joint holders as the case may be may direct, 96. No dividend shall bear interest against the company. Accounts. 97. The directors shall cause proper books of account to be kept with respect to— All sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place; All sales and purchases of goods by the company; and The assets and liabilities of the company. COMPANIES "ACT, 1926 ye lu 7 -98." The books of account shall be kept at the registered office of the company, or at such other place or places as the directors think fit. and shall alwavs be open to the inspection of the directors. 99. The directors shall from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the company or any of them shall be open to the inspection of members not being directors, and no member (not being a director) shall have any right of inspectng any account or book or document of the company except as conferred by statute or authorised bv the directors or bv the company in general meeting. too. The directors shall from time to time in accordance with section 123 of the Act, cause to be prepared and to be laid before the company in general meeting such profit and loss accounts, balance sheets and reports as are referred to in that section. 101. A copy of every balance sheet (including every document required by law to be annexed thereto) which is to be laid before the company in general meeting together with a copy of the Auditors’ report shall not less than seven days before the date of the meeting be sent to all persons entitled to receive notices of general meetings of the company. Audit. 102. Auditors shall be appointed and their duties in accordance with sections 132, 132 and 134 of “he A. regulated Notice-103. A notice may be given by the company to any member either personally or by sending it by post to him to his registered address, or (if he has no registered address within the United Kingdom) to the address, if any, within the United Kingdom supplied by him to the company for the giving of notices to him. Where a notice is sent by post, service of the notice shall be deemed to be effected by properly addressing, prepaying, and posting a letter containing the notice, and to have been effected in the case of a notice of a meeting at the expiration of 24 hours after the letter containing the same is posted, and in any other case at the time at which the letter would be delivered in the ordinary course of post 104. If a member has no registered address within the United Kingdom and has not supplied to the company an address within the United Kingdom for the giving of notices to him, a notice addressed to him and advertised in a newspaper circulating the neighbourhood of the registered office of the company, shall be deemed to be duly given to him at noon on the dav on which the advertisement appears. 758 SECRETARIAL PRACTICE 105. A notice may be given by the company to the joint holders of a share by giving the notice to the joint holder named first in the register of members in respect of the share. 106. A notice may be given by the company to the persons entitled to a share in consequence of the death or bankruptcy of a member by sending it through the post in a prepaid letter addressed to them by name, or by the title of representatives of the deceased, or trustee of the bankrupt, or by any like description, at the address, if any, within the United Kingdom supplied for the purpose by the persons claiming to be so entitled, or (until such an address has been so supplied) by giving the notice in any manner in which the same might have been given if the death or bankruptcy had not occurred. 107. Notice of every general meeting shall be given in some manner hereinbefore authorised to (a) every member except those members who (having no registered address within the United Kingdom) have not supplied to the company an address within the United Kingdom for the giving of notices to them, and also to (b) every person entitled to a share in consequence of the death or bankruptcy of a member, who, but for his death or bankruptcy, would be entitled to receive notice of the meeting, No other persons shall be entitled to receive notices of general meetings. Sections 11 and 379. TABLE B. ForRM OF MEMORANDUM OF ASSOCIATION OF A COMPANY LIMITED BY SHARES. 1st. The name of the company is “The Eastern Steam Packe! Company, Limited.” 2nd. The registered office of the company will be situate ir England. 3rd. The objects for which the company is established are, ‘the “conveyance of passengers and goods in ships or boats between such ‘places as the company may from time to time determine, and the “doing all such other things as are incidental or conducive to the ‘attainment of the above object.” 4th. The liability of the members is limited. 5th. The share capital of the company is two hundred thousand pounds divided into one thousand shares of two hundred pounds each WE, the several persons whose names and addresses are subscribed, are desirous of being formed into a company, in pursuance of this memorandum of association, and we respectively agree to take the number of shares in the capital of the company set opposite our respective names. COMPANIES ACT, 192g Names, Addresses, and Descriptions of Subscribers “1. John Jones of ‘“2. John Smith of “3. Thomas Green of “4. John Thompson of ‘“5. Caleb White of “6. Andrew Brown of “= Caesar White of in the county of mercher in the county of in the county of in the county in the county of in the county o. in the county of 75Q Number of shares taken by each Subscribet Total shares taker Dated the day of 19 . Witness wo the above signatures, © 7 - +~ Hute Street Clerkenwell London NN Sections rr and 270 FORM OF MEMORANDUM AND ARTICLES OF ASSOCIATION OF A COMPANY LIMITED BY GUARANTEE, AND NOT HAVING A SHARE CAPITAL. Mewmoranduni of Association 1st. The name of the company is “The Kent School Association. Limited.” 2nd. The registered office of the companv will be situate in England. 3rd. The objects for which the company is established are the carrying on a school for boys in the county of Kent and the doing all such other things as are incidental or conducive to the attainment of the above object. 4th. The liability of the members is limited. 5th. Every member of the company undertakes to contribute to the assets of the company in the event of its being wound up while he 1s a member, or within one year afterwards, for pavment of the debts and liabilities of the company contracted before he ceases to be a member, and the costs charges and expenses of winding up, and for the adjustment of the rights of the contributories among themselves, such amount as may be required not exceeding ten pounds - WE, the several persons whose names and addresses are subscribed, are desirous of being formed into a company, in pursuance of this memorandum of association. 260 SECRETARIAL PRACTICE Names, Addresses, and Descriptions of Subscribers, John Jones of in the county of schoolmaster John Smith of in the county of Thomas Green of in the county of John Thompson of - in the county of Caleb White of in the county of Andrew Brown of - in the county of Andrew Brown of - in the county of Caesar White of in the county of t3; “2. 3. 0. a, Fe 3 Dated day of 19 . Witness to the above signatures, : A.B., No. 13, Hute Street, Clerkenwell. London ARTICLES OF ASSOCIATION TO ACCOMPANY PRECEDING MEMORANDUM OF ASSOCIATION, Preliminary. 1. In these regulations: — The Act means the Companies Act, 1929. When any provision of the Act is referred to the reference is to such provision as modified by any statute for the time being in force. Unless the context otherwise requires, expressions defined in the Act or any statutory modification thereof in force at the date at which these regulations become binding on the company, shall have the meanings so defined. Members. 2. The number of members with which the company proposes to be registered is 500, but the directors mav from time to time register an increase of members. 3. The subscribers to the memorandum of association and such other persons as the directors shall admit to membership shall be members of the company. General Meetings. 4. The first general meeting shall be held at such time, not being less than one month nor more than three months after the incorporation of the company, and at such place. as the directors may determine. 5. A general meeting shall be held once in every calendar year at such time (not being more than fifteen months after the holding of the last preceding general meeting) and place as may be prescribed by the company in general meeting, or, in default, at such time in the third month following that in which the anniversary of the company’s incorporation occurs, and at such place as the directors shall appoint. COMPANIES ACT, 1920 76,1 In default of a general meeting being so held, a general meeting shall be held in the month next following, and may be convened by any two members in the same manner as nearly as possible as that in which meetings are to be convened bv the directors. 6. The above-mentioned general meetings shall be called ordinary general meetings; all other general meetings shall be called extra: ordinary general meetings. 7. The directors may, whenever they think fit, convene an extraordinary general meeting, and extraordinary general meetings shall also be convened on such requisition, or, in default, may be convened by such requistionists, as provided by section 114 of the Act. If at any time there are not within the United Kingdom sufficient directs capable of acting to form a quorum, any director or any two members of the company may convene an extraordinary general meeting in the same manner as nearly as possible as that in which meetings mav be convened bv the directors Notice of General Meetings. 8. Subject to the provisions of section 117 (2) of the Act relating to special resolutions, seven days’ notice at the least (exclusive of the day on which the notice is served or deemed to be served, but inclusive of the day for which notice is given) specifying the place, the day, and the hour of meeting and, in case of special business, the general nature of that business shall be given in manner hereinafter mentioned, or in such other manner, if any, as may be prescribed by the company in general meeting, to such persons as are, under the regulations of the company, entitled to receive such notices from the company; but with the consent of all the members entitled to receive notice of some particular meeting, that meeting may be convened by such shorter notice and in such manner as those members may think At 9. The accidental omission to give notice of a meeting to, or the non-receipt of notice of a meeting by, anv member shall not invalidate the proceedings at anv meetinoe Proceedings at General Meetings. ro. All buisness shall be deemed special that is transacted at an extraordinary meeting, and all that is transacted at an ordinary meeting, with the exception of the consideration of the accounts, balance sheets, and the ordinary report of the directors and auditors, the election of directors and other officers in the place of those retiring by rotation, and the fixing of the remuneration of the anditors. 11. No business shall be transacted at any general meeting unless a quorum of members is present at the time when the meeting proceeds to business; save as herein otherwise provided. three members personally present shall be a quorum 762 SECRETARIAL PRACTICE 12. If within half an hour from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall be dissolved; in any other case it shall stand adjourned to the same day in the next week, at the same time. and place, and if at the adjourned meeting a, quorum is not present within half an hour from the time appointed for the meeting the members present shall be a quorum. 13. The chairman, if any, of the board of directors shall preside as chairman at every general meeting of the company. 14. If there is no such chairman, or if at any meeting he is not present within fifteen minutes after the time appointed for holding the meeting or is unwilling to act as chairman, the members present shall choose some one of their number to be chairman. 15. The chairman may, with the consent of any meeting at which a quorum is present (and shall if so directed by the meeting), adjourn the meeting from time to time and from place to place, but nc business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a meeting is adjourned for ten days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting. 16. At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or. on the declaration of the result of the show of hands) demanded by at least two members present in person or by proxy entitled tc vote and unless a poll is so demanded, a declaration by the chairman that a resolution has, on a show of hands, been carried, or carried nnanimously, or by a particular majority, or lost, and an entry to that effect in the book of the proceedings of the company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favour of, or against, that resolution. 17. If a poll is duly demanded it shall be taken in such manner as the chairman directs, and the result of the poll shall be deemed tc be the resolution of the meeting at which the poll was demanded. 18. In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded. shall be entitled to 2 second or casting vote. ~ 19. A poll demanded on the election of a chairman, or on a guestion of adjournment, shall be taken forthwith. A poll demanded on any other question shall be taken at such time as the chairman of the meeting directs. COMPANIES ACT, 19.4 Votes of Members. 20. Every member shall have one vote. 21. A member of unsound mind, or in respect of whom an order has been made, by any court having jurisdiction in lunacy, may vote, whether on a show of hands or on a poll, by his committee, curator bonis, or other person in the nature of a committee or curator bonis appointed by that court, and any such committee, curator bonis. or other person may, on a poll, vote by proxy. 22. No member shall be entitled to vote at any general meeting unless all moneys presently payable bv him to the companv have been paid. 23. On a poll votes mav be given either personally or by proxy. 24. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under the seal, or under the hand of an officer or attornev so authorised. A proxv need not be a member of the company. 25. The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copv of that power or authority shall be deposited at the registered office of the company not less than forty-eight hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote, and in default the instrument of proxy shall not be treated as valid. --26. An instrument appointing a proxy may be in the following form, or anv other form which the directors shall approve :— “smpany, Limited. / of in the co being a member of the Company, Limited, hereby appoint of as my proxy to vote for me and on my behalf at the [ordinary or extraordinary, as the case may be] general meeting of the companv to be held on the day of and at any adjournment thereof.” Signed this day of 27. The instrument appointing a proxy shall be deemed to confer authoritv to demand or join in demanding a poll. Corporations acting by Representatives at Meetings. 28. Any corporation which is a member of the company may by resolution of its directors or other governing body authorise such person as it thinks fit to act as its representative at any meeting of the company and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual member of the companv. 764 SECRETARIAL PRACTICE Divectors. 29. The number of directors and the names of the first directors shall be determined in writing bv a majority of the subscribers to the memorandum. 30. The remuneration of the directors shall from time to time be determined by the company in general meeting. Powers and Duties of Directors. 31. The business of the company shall be managed by the directors, who may pay all expenses incurred in getting up and registering the company, and may exercise all such powers of the company as are not, by the Act, or by these articles, required to be exercised by the company in general meeting, subject nevertheless to any regulation of these articles, to the provisions of the Act, and to such regulations, being not inconsistent with the aforesaid regulations or provisions, as may be prescribed by the company in general meeting, but no regulation made by the company in general meeting shall invalidate any prior act of the directors which would have been valid if that regulation had not been made. 32. The directors shall cause minutes to be made in books provided for the purpose— (a) of all appointments of officers made by the directors; (b) of the names of the directors present at each meeting of the directors and of any committee of the directors; «¢) of all resolutions and proceedings at all meetings of the company, and of the directors, and of committees ot directors; and every director present at any meeting of directors or committee of directors shall sign his name in a book to be kept for that purpose The Seal. 33. The seal of the company shall not be affixed to any instrument except by the authority of a resolution of the board of directors, and in the presence of a director and of the secretary or such other person as the directors may appoint for the purpose; and that director and the secretary or other person as aforesaid shall sign every instrument to which the seal of the company is so affixed in their presence. Disqualifications of Directors. 34. The office of director shall be vacated, if the director— (a) without the consent of the company in general meeting holds any other office of profit under the company; or (b) becomes bankrupt; or - (¢) becomes prohibited from being a director by reason of any order made under sections 217 or 275 of the Act; (d) is found lunatic or becomes of unsound mind: or COMPANIES ACT, 1929 =F scl (e) resigns his office by notice in writing to the company; (f) is directly or indirectly interested in any contract with the company and fails to declare the nature of his interest in manner required by section 149 of the Act. A director shall not vote in respect of any contract in which he is interested or any matter arising thereout, and if he does so vote his vote shall not be counted. Rotation of Divectors. 35. At the first ordinary general meeting of the company the whole of the directors shall retire from office, and at the ordinary general meeting in every subsequent year one-third of the directors for the time being, or, if their number is not three or a multiple of three. then the number nearest one-third, shall retire from office. 36. The directors to retire in every year shall be those who have been longest in office since their last election but as between persons who became directors on the same day those to retire shall (unless they otherwise agree among themselves) be determined by lot. 37. A retiring director shall be eligible for re-election. 38. The company at the general meeting at which a director retires in manner aforesaid may fill up the vacated office by electing a person thereto and in default the retiring director shall be deemed to have been re-elected unless at such meeting it is resolved not to fill up such vacated office. 39. The company may from time to time in general meeting increase or reduce the number of directors, and may also determine in what rotation the increased or reduced number is to go out of office 40. Any casual vacancy occurring in the board of directors may be filled up by the directors but the person so chosen shall be subject to retirement at the same time as if he had become a director on the day on which the director in whose place he is appointed was last elected a director. 41. The directors shall have power at any time, and from time to time, to appoint a person as an additional director who shall retire from office at the next following ordinary general meeting, but shall be eligible for election by the companv at that meeting as an additional director. 42. The company may by extraordinary resolution remove any director before the expiration of his period of office, and may by an ordinary resolution appoint another person in his stead. The person so appointed shall be subject to retirement at the same time as if he had become a director on the day on which the director in whose place he is appointed was last elected a director 766 SECRETARIAL PRACTICE Proceedings of Directors. 43. The directors may meet together for the despatch of business, adjourn, and otherwise regulate their meetings, as they think fit. Questions arising at any meeting shall be decided by a majority of votes. In case of an equality of votes the chairman shall have a second or casting vote. A director may, and the secretary on the requisition of a director shall, at any time summon a meeting of the directors. 44. The quorum necessary for the transaction of the business of the directors may be fixed by the directors, and unless so fixed shall, when the number of directors exceed three, be three and shall, when the number of directors does not exceed three. be two. 45. The continuing directors may act notwithstanding any vacancy in their body, but, if and so long as their number is reduced befow the number fixed by or pursuant to the regulations of the company as the necessary quorum of directors, the continuing directors may act for the purpose of increasing the number of directors to that number, or of summoning a general meeting of the company, but for no other purpose. 46. The directors may elect a chairman of their meetings and determine the period for which he is to hold office; but, if no such chairman is elected, or if at any meeting the chairman is not present within five minutes after the time appointed for holding. the same, the directors present may choose one of their number to be chairman of the meeting. 47. The directors may delegate any of their powers to committees consisting of such member or members of their body as they think fit; any committee so formed shall, in the exercise of the powers so delegated, conform to any regulations that may be imposed on them by the directors. 48. A committee may elect a chairman of its meetings; if no such chairman is elected, or if at any meeting the chairman is not present within five minutes after the time appointed for holding the same, the members present may choose one of their number to be chairman of the meeting. 49. A committee may meet and adjourn as it thinks proper Questions arising at any meeting shall be determined by a majority of votes of the members present, and in case of an equality of votes the chairman shall have a second or casting vote. 50. All acts done by any meeting of the directors or of a committee of directors, or by any person acting as a director, shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such directors or persons acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and was qualified to be a director. COMPANIES ACT, 1929 767; Accounts. 51. The directors shall cause proper books of account to be kept with respect to— All sums of money received and expended by the company and the matter in respect of which the receipt and expenditure takes place; All sales and purchases of goods by the company; and The assets and liabilities of the company. 52. The books of account shall be kept at the registered office of the company, or at such other place or places as the directors think fit, and shall always be open to the inspection of the directors. 53. The directors shall from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the company or any of them shall be open to the inspection of members not being directors and no member (not being a director) shall have any right of inspecting any account or book or document of the company except as conferred by statute or authorised bv the directors or by the company in general meeting. 54. The directors shall from time to time in accordance with section 123 of the Act, cause to be prepared and to be laid before the company in general meeting such profit and loss accounts balance sheets and reports as are referred to in that section. 55. A copy of every balance sheet (including every document required by law to be annexed thereto) which is to be laid before the company in general meeting together with a copy of the auditor's report shall not less than seven days before the date of the meeting be sent to all persons entitled to receive notices of general meetings of the Companv Audit 56. Auditors shall be appointed and their duties regulated] in accordance with sections 132, 133, and 134 of the Act. Notices. 57. A notice may be given by the company to any member either personally or by sending it by post to him to his registered address, or (if he has no registered address within the United Kingdom) to the address, if any, within the United Kingdom supplied by him to the company for the giving of notices to him. Where a notice is sent by post, service of the notice shall be deemed to be effected by properly addressing, prepaying, and posting a letter containing the notice, and to have been effected at the expiration of 24 hours after the letter containing the same was posted. 58. If a member has no registered address within the United Kingdom and has not supplied to the company an address within the United Kingdom for the giving of notices to him 2a notice addrecced 768 SECRETARIAL PRACTICE to him and advertised in a newspaper circulating in the neighbourhood of the registered office of the company, shall be deemed to be duly given to him on the day on which the advertisement appears. 59. Notice of every general meeting shall be given in some manner nereinbefore authorised to every member except those members whe (having no registered address within the United Kingdom) have not supplied to the company an address within the United Kingdom for the giving of notices to them. No other persons shall be entitled to receive notices of general meetings. Names, Addresses and Descriptions of Subscribers. “1. John Jones of in the county of schoolmaster “2. John Smith of in the county of ~~ Thomas Green of in the county of John Thompson of in the county of Caleb White of in the county of ». Andrew Brown of in the county of "7. Caesar White of in the county of Dated the day of 19 Witness to the above signatures, A.B., No. 20, Bond Street, London. TABLE D. Sections 11 and MEMORANDUM AND ARTICLES OF ASSOCIATION OF A COMPANY 379. LIMITED BY GUARANTEE, AND HAVING A SHARE CAPITAL. Memorandum of Association. Ist. The name of the company is “ The Highland Hotel Company, Limited.” 2nd. The registered office of the company will be situate in Scotland. 3rd. The objects for which the company is established are ‘‘the “facilitating travelling in the Highlands of Scotland, by providing “hotels and conveyances by sea and by land for the accommodation “of travellers, and the doing all such other things as are incidental “or conducive to the attainment of the above object.” 4th. The liability of the members is limited. 5th. Every member of the company undertakes to contribute to the assets of the company in the event of its being wound up while he is a member, or within one year afterwards, for payment of the debts and liabilities of the company, contracted before he ceases to be a member, and the costs, charges and expenses of winding up the same and for the adjustment of the rights of the contributories amongst themselves, such amount as may be required, not exceeding twenty pounds. COMPANIES ACT, 1029 76Q 6th. The share capital of the company shall consist of five hundred thousand pounds, divided into five thousand shares of one hundred pounds each. WE, the several persons whose names and addresses are subscribed, are desirous of being formed into a company, in pursuance of this memorandum of association, and we respectively agree to take the number of shares in the capital of the company set opposite our respective names. Number of Shares taken by each Subscriber Names. Addresses, and Descriptions of Subscribers. “1. John Jones of “2. John Smitl: “3. Thomas Green c. “4. John Thompson of “5. Caleb White of “6. Andrew Brown of “= Caesar White of in the county of :n the county of in the county in the count in the county in the count: in the countv °° merch: G Total shares tak. Dated the day of 19 Witness to the above signatures, 4 B., No. 1 Hute Street, Clerkenwell, London. - ARTICLES OF ASSOCIATION TO ACCOMPANY PRECEDING MEMORANDUM OF ASSOCIATION. 1. The Articles of Table A set out in the First Schedule to the Companies Act, 1929, shall be the articles of association of the company and apply to the company. Names, Addresses, and Descriptions of Subscribers. “1. John Jones .° in the count > che “2. John Smith ou. in the county “3. Thomas Green o. in the county “4. John Thompson ~f in the count “5. Caleb White ou! in the county .. “6. Andrew Brown of in the coun” “7. Caesar White of in the conn? Datee wa "7 Laaess to tne above signatu. Hute Street. Clerkenwell London. Sections 11 and 170. 770 SECRETARIAL PRACTICE TABLE E. MEMORANDUM AND ARTICLES OF ASSOCIATION OF AN UNLIMITEL COMPANY HAVING A SHARE CAPITAL. Memorandum of Association. 1st. The name of the company is “The Patent Stereotype Company.” 2nd. The registered office of the company will be situate in England. 3rd. The objects for which the company is established are ‘“the “working of a patent method of founding and casting stereotype “plates, of which method John Smith of London, is the sole patentee, “and the doing of all such things as are incidental or conducive to the “attainment of the above objects.” WE, the several persons whose names are subscribed, are desirous of being formed into a company, in pursuance of this memorandum of association, and we respectively agree to take the number of shares in the capital of the company set opposite our respective names. “1. John Jones of in the county of “2. John Smith of in the county of “3. Thomas Green of in the county of “6. John Thompson of in the county of “5. Caleb White of in the county of “6. Andrew Brown of in the county of “7. Abel Brown of in the county of merchant 3 2 1 2 2 x I 12 a ¥ Total shares taken Dated the day of 19 . Witness to the above signatures, A.B., No. 20, Bond Street, London. ARTICLES OF ASSOCIATION TO ACCOMPANY THE PRECEDING MEMORANDUM OF ASSOCIATION. 1. The share capital of the company is two thousand pounds divided into twenty shares of one hundred pounds each. 2. The company may by special resolution— (a) increase the share capital by such sum to be divided into shares of such amount as the resolution may prescribe; (6) consolidate its shares into shares of a larger amount than its existing shares: COMPANIES ACT, 1929 (¢) sub-divide its shares into shares of a smaller amount than its existing shares; cancel any shares which at the date of the passing of the resolution have not been taken or agreed to be taken by any person; (e) reduce its share capital in any wav. 3. The Articles of Table A set out in the First Schedule to the Companies Act, 1929 (other than Articles 30, 31, 32, 33, 34, 37, and 38) shall be deemed to be incorporated with these articles and shall apply to the company. Names, Addresses and Descriptions o! 1. John Jones of in the county .* 2. John Smith of in the county .. 3. Thomas Green of in the county . 4. John Thompson of in the count 5. Caleb White of in the county .. 6. Andrew Brown of in the county 7. Abel Brown of in the coun* Dated the day of Witness to the above signatures, A4.B., No. 20, Bond Street, London Suvbsciib.o.. . Yarn SECOND SCHEDULE. Sections 14 and 37Q. FORM OF LICENCE TO HOLD LANDS. The Board of Trade hereby licence the toghold the lands hereunder described (insert description | lands, [or to hold lands not exceeding in the whole acres]. The conditions of this licence are (insert conditions, if any’ 172 SECRETARIAL PRACTICE THIRD SCHEDULE. Section 27. FORM OF STATEMENT IN LIEU OF PROSPECTUS TO BE DELIVERED TO REGISTRAR BY A PRIVATE COMPANY ON BECOMING A PuBLic COMPANY. Tue COMPANIES ACT, 1929. Statement in lieu of Prospectus delivered for registration by [Insert the name of the Company.) Pursuant to section 27 of the Companies Act, 1929. Delivered for registration by The nominal share capital of the| £ Company. Divided into - - Shares of £ each. Shares of £ each. Amount (if any) of above capital which consists of redeemable preference shares. The date on or before which those shares are, or are liable, to be redeemed. Names, descriptions and addresses of directors or proposed directors. Amount of shares issued - - - Amount of commissions paid in connection therewith. Amount of discount, if any, allowed on the issue of any shares, or so much thereof as has not been written off at the date of the statement. Unless more than one year has elapsed since the date on which the Company was entitled to commence business:— Amount of preliminary expenses. Amount paid to any promoter - Shares £ Name of promoter. Amount £ ' Consideration :— Consideration for the payment - [f the share capital of the Company is divided into different classes of shares, the right of voting at meetings of the Company conferred by, and the rights in respect of COMPANIES ACT, 1929 capital and dividends attached to, the several classes of shares respectivelv. Number and amount of shares and debentures issued within the two years preceding the date of this statement as fully or partly paid up otherwise than for cash or agreed to be so issued at the date of this statement. Consideration for the issue of those shares or debentures. Names and addresses of Vendors of Property (1) purchased or acquired by the Company within the two years preceding the date of this statement or (2) agreed or proposed to be purchased or acquired by the Company. Amount (in cash, shares or debentures) paid or payable to each separate vendor. Amount paid or payable in cash, shares or debentures for any such property, specifying the amount paid or payable for goodwill. shares of £ fully paid. shares upon which £ per share crediteu as paid. 7 3. debenture 4. Consideration :-F Total purch: - Fo 1 S--De Ga: Dates of, and parties to, every ma. terial contract (other than con tracts entered into in the ordinary course of business or entered into more than two years before the delivery of this statement). Time and place at which the contracts or copies thereof may be inspected. Names and addresses of the auditors of the Company. Full particulars of the nature and extent of the interest of every director in any property purchased or acquired by the Company within the two years preceding the date of this statement or proposed to be purchased or acquired by the Company or. where 774 SECRETARIAL PRACTICE the interest of such a director consists in being a partner in a firm, the nature and extent of the interest of the firm, with a statement of all sums paid or agreed to be paid to him or to the firm in cash or shares, or otherwise, by any person either to induce him to become or to qualify him as, a director, or otherwise for services rendered or to be rendered to the Company by him or by the firm. Rates of the dividends (if any) paid by the Company in respect of each class of shares in the Company in each of the three financial years immediately preceding the date of this statement or since the incorporation of the Company whichever period is the shorter. Particulars of the cases in which no dividends have been paid in respect of any class of shares in any of these vears. [f any of the unissued shares or debentures are to be applied in the purchase of any business the amount, as certified by the persons by whom the accounts of the business have been audited, of the net profits of the business in respect of each of the three financial years immediately preceding the date of this statement, provided that in the case of a business which has been carried on for less than three years and the accounts of which have only been made up in respect of two years or one year the above requirement shall have effect as if references to two years or one year, as the case may be, were substituted for references to three years, and in any such case the statement shall say how long the business to be acquired has been carried on. COMPANIES ACT, 192g {Signatures of the persons above-named as directors or proposed directors or of their agents authorised in writing } Pate Note.—In this Form the expression ‘‘ vendor’ includes a vendor as defined in Part III of the Fourth Schedule to this Act, and the expression ‘financial year’ has the meaning assigned to it in that Part of the said Schedule FOURTH GJSCHEDULE. Sections 35 and 18%, PART MATTERS REQUIRED TO BE STATED IN PROSPECTUS 1. Except where the prospectus is published as a newspaper advertisement, the contents of the memorandum, with the names, descriptions, and addresses of the signatories, and the number a shares subscribed for by them respectively. 2. The number of founders or management or deferred shares, if any, and the nature and extent of the interest of the holders in the property and profits of the company. 3. The number of shares, if any, fixed by the articles as the qualification of a director, and any provisions in the articles as to the remuneration of the directors. 4. The names, descriptions, and addresses of the directors or proposed directors. 5. Where shares are offered to the public for subscription particulars as to— (1) the minimum amount which, in the opinion of the directors, must be raised by the issue of those shares in order to provide the sums, or, if any part thereof is to be defrayed in any other manner, the balance of the sums, required to be provided in respect of each of the following matters: — (2) the purchase price of any property purchased or to be purchased which is to be defrayed in whole or in part out of the proceeds of the issue; (6) any preliminary expenses payable by the company, and any commission so payable to any person in consideration of his agreeing to subscribe for, or of his procuring or agreeing to procure subscriptions for, any shares in the companv 776 SECRETARIAL PRACTICE (c) the repayment of any moneys borrowed by the company in respect of any of the foregoing matters: (@) working capital; and (if) the amounts to be provided in respect of the matters aforesaid otherwise than out of the proceeds of the issue and the sources out of which those amounts are to be provided. 6. The amount payable on application and allotment on each share, and, in the case of a second or subsequent offer of shares the amount offered for subscription on each previous allotment made within the two preceding years, the amount actually allotted and the amount, if any, paid on the shares so allotted. 7. The number and amount of shares and debentures which within the two preceding years have been issued, or agreed to be issued, as fully or partly paid up otherwise than in cash, and in the latter case the extent to which they are so paid up, and in either case the consideration for which those shares or debentures have been issued or are proposed or intended to be issued. 8. The names and addresses of the vendors of any property purchased or acquired by the company, or proposed so to be purchased or acquired, which is to be paid for wholly or partly out of the proceeds of the issue offered for subscription by the prospectus, or the purchase or acquisition of which has not been completed at the date of issue of the prospectus, and the amount payable in cash, shares, or debentures, to the vendor, and where there is more than one separate vendor, or the company is a sub-purchaser, the amount so payable to each vendor. 9. The amount, if any, paid or payable as purchase money in cash, shares, or debentures, for any such property as aforesaid specifying the amount, if anv, pavable for goodwill. Io. The amount, if any, paid within the two preceding years, or payable, as commission (but not including commission to subunderwriters) for subscribing or agreeing to subscribe, or procuring or agreeing to procure subscriptions, for any shares in, or debentures of, the company, or the rate of any such commission. 11. The amount or estimated amount of preliminary expenses 12. The amount paid within the two preceding years or intended to be paid to any promoter, and the consideration for any such payment. 13. The dates of and parties to every material contract, not being a contract entered into in the ordinary course of the business carried on or intended to be carried on by the company or a contract entered into more than two years before the date of issue of the prospectus, and a reasonable time and place at which any such material contract or a copy thereof may be inspected. COMPANIES ACT, 1929 14. The names and addresses of the auditors, if any, of the company. / 15. Full particulars of the nature and extent of the interest, if any, of every director in the promotion of, or in the property proposed to be acquired by, the company, or, where the interest of such a director consists in being a partner in a firm, the nature and extent of the interest of the firm, with a statement of all sums paid or agreed to be paid to him or to the firm in cash or shares or otherwise by any person either to induce him to become, or to qualify him as a director, or, otherwise for services rendered by him or by the firm in connection with the promotion or formation of the comvanv. 16. If the prospectus invites the public to subscribe for shares in the company and the share capital of the company is divided into different classes of shares, the right of voting at meetings of the company conferred by, and the rights in respect of capital and dividends attached to. the several classes of shares respectively. 17. In the case of a company which has been carrying on business, or of a business which has been carried on for less than three years, the length of time during which the business of the company or the business to be acquired, as the case mav be. has been carried on WRI REPORTS TO BE SET OUT IN PROSPECTUS I. A report by the auditors of the company with respect to the profits of the company in respect of each of the three financial years immediately preceding the issue of the prospectus, and with respect to the rates of the dividends, if any, paid by the company in respect of each class of shares in the company in respect of each of the said three years, giving particulars of each such class of shares on which such dividends have been paid and particulars of the cases in which no dividends have been paid in respect of any class of shares in respect of any of those years, and, if no accounts have been made up in respect of any part of the period of three years ending on a date three months before the issue of the prospectus, containing a statement of that fact 2. If the proceeds, or any part of the proceeds, of the issue of the shares or debentures are or is to be applied directly or indirectly in the purchase of any business, a report made by accountants who shall be named in the prospectus upon the profits of the business in respect of each of the three financial vears immediately preceding the issue of the prospectus 773 SECRETARIAL PRACTICE Part III. ProvisioNs APPLYING TO PARTS I AND II oF SCHEDULE. 1. The provisions of this Schedule with respect to the memorandum and the qualification, remuneration and interest of directors the names, descriptions and addresses of directors or proposed directors, and the amount or estimated amount of the preliminary expenses, shall not apply in the case of a prospectus issued more than two years after the date at which the company is entitled to commence business. 2. Every person shall for the purposes of this Schedule be deemed to be a vendor who has entered into any contract, absolute or conditional, for the sale or purchase, or for any option of purchase of any property to be acquired by the company, in any case where— (a) the purchase money is not fully paid at the date of the issue of the prospectus; (b) the purchase money is to be paid or satisfied wholly or in part out of the proceeds of the issue offered for subscription by the prospectus; the contract depends for its validity or fulfilment on the result of that issue. (c) 3. Where any property to be acquired by the company is to be taken on lease, this Schedule shall have effect as if the expression “vendor” included the lessor, and the expression ‘‘ purchase money” included the consideration for the lease, and the expression ‘‘sub purchaser” included a sub-lessee. 4. For the purposes of paragraph 8 of Part I of this Schedule where the vendors or any of them are a firm, the members of the firm shall not be treated as separate vendors. 5. Ifin the case of a company which has been carrying on business or of a business which has been carried on for less than three years, the accounts of the company or business have only been made ap in respect of two years or one year, Part II of this Schedule shall have effect as if references to two years or one year, as the case may be. were substituted for references to three vears. 6. The expression ‘‘financial year” in Part II of this Schedule means the year in respect of which the accounts of the company or of the business, as the case may be, are made up, and where by reason of any alteration of the date on which the financial yea: of the company or business terminates the accounts of the company or business have been made up for a period greater or less than a year, that greater or less period shall for the purpose of the said Part of this Schedule be deemed to be a financial year. COMPANIES ACT, 192g FIFTH SCHEDULE. Section 40. FORM OF STATEMENT IN LIEU OF PROSPECTUS TO BE DELIVERED TO REGISTRAR BY A COMPANY WHICH DOES NOT ISSUE 4 PROSPECTUS OR WHICH DOES NOT GO TO ALLOTMENT ON A PROSPECTUS ISSUED. THE COMPANIES ACT, 102° Statement in lieu of Prospectus delivered for registration bv Insert the name of the company Pursuant to section 40 of the Companies Act, iy-. Delivered for registration bv The nominal Company. Divided inte share nial ¢ tit Amount (if any) of above capital which consists of redeemable pre ference shares. The date on or before which these shares are, or are liable. to be redeemed. Names, descriptions and addresses of directors or proposed directors. If the share capital of the Company is divided into different classes of shares, the right of voting atmeetings of the Company conferred by, and the rights in respect of capital and dividends attached to, the several classes of shares respectively. Number and amount of shares and debentures agreed to be issued as fully or partly paid up otherwise than in cash. The consideration for the intended issue of those shares and debentures Share: Share. shares © ad. share LN va n A Noro "1001 WiilC > shore 780 SECRETARIAL PRACTICE Names and addresses of vendors of property purchased or acquired, or proposed to be purchased or acquired by the Company. Amount (in cash, shares, or deben tures) payable to each separate vendor. Amount (if any) paid or payable (in cash or shares or debentures) for any such property, specifying amount (if any) paid or payable for goodwill. Total purchase price £ Cash - - £ Shares £ Debentures Goodwill Amount (if any) paid or payable as commission for subscribing or agreeing to subscribe or procuring or agreeing to procure subscriptions for any shares or debentures in the Company; or Rate of the commission - - The number of shares, if any, which persons have agreed for a com mission to subscribe absolutely. Estimated amount of preliminar, expenses. Amount paid or intended to be paid to any promoter. Consideration for the payment Amount paid. pavable Vy Rate per cent. / Name of promoter. Amount £ . Consideration :— Dates of, and parties to, every material contract (other than contracts entered into in the ordinary course of the business intended to be carried on by the Company B entered into more than two years before the delivery of this statement). lime and place at which the contracts or copies thereof may be inspected. Names and addresses of the auditors of the Company (if any). Full particulars of the nature and extent of the interest of every! director in the promotion of or, COMPANIES ACT, 192g in the property proposed to be acquired by the Company, or, where the interest of such a director consists in being a partner in a firm, the nature and extent of the: interest of the firm, with a state-| ment of all sums paid or agreed tol be paid to him or to the firm in cash or shares, or otherwise, by any: person either to induce him tol become, or to qualify him as, a director, or otherwise for services rendered by him or by the firm in connection with the promotion or formation of the Company. If it is proposed to acquire any business, the amount, as certified by the persons by whom the accounts of the business have: been audited, of the net profits of the business in respect of each: of the three financial years immediately preceding the date of this statement provided that in the case of a business which has been carried on for less than three years and the accounts of which have only been made up in respect of two years or one year the above requirement shall have effect as if references to two years or one year, as the case may be, were substituted for references to three years, and in any such case the statement shall say how long the business tc acauired has been carried - (Signatures of the persons above-namec as directors or proposed directors, or ~ their agents authorised in writin« Date Note.—In this Schedule the expression “vendor” includes a vendor as defined in Part III of the Fourth Schedule to this Act, and the expression “financial year’ has the meaning assigned tc it in that Part of the said Schedule Sections 108 and 370. 782 SECRETARIAL PRACTICE SIXTH SCHEDULE. ForM oF ANNUAL RETURN OF A COMPANY HAVING A SHARE CAPITAL. Annual Return of the Company, Limited made up to the day of 19 (being the fourteenth day after the date of the first or only ordinary general meeting in 19 ). The address of the registered office of the Company is as follows :— Summary of Share Capital and Shaves. Nominal Share Capital £ PS | £ into* J Total number of shares taken up* to the day of 19 being the date of the return (which number must agree with the total shown in the list as held by existing members). Number of shares issued subject to payment wholly in cash. Number of shares issued as fully paid up otherwise than in cash. Number of shares issued as partly paid up to the extent of per share otherwise than in cash. t Number of shares (if any) issued at a discount. Total amount of discount on the issue of shares which has not been written off at the date of this Return. *There has been called up on each of shares. *There has been called up on each o: shares. *There has been called up on each c. shares. £ 4, shares of each. shares of each. * Where there are shares of different kinds or amounts e.g. Preference and Ordinary or £ and 15.) state the number and nominal values separately. t If the shares are of different kinds, state them separately COMPANIES ACT, 1929 fTotal amount of calls received, including payments on application and allotment. Total amount (if any) agreed to be considered as paid on shares which have been issued as fully paid up otherwise than in cash. Total amount (if any) agreed to be considered as paid on shares which have been issued as partly paid up to the extent of per share otherwise than in cash. Total amount of calls unpaid - Total amount of the sums (if any) paid by way of commission in respect of any shares or debentures or allowed by way of discount in respect of any debentures since the date of the last Return. Total number of shares forfeited - - Total amount paid (if any) on shares forfeited Total amount of shares for which shai warrants to bearer are outstanding. Total amount of share warrants to bearer issued and surrendered respectively since the date of the last Return. Number of shares comprised in each share warrant to bearer. Total amount of the indebtedness of the Company in respect of all mortgages and charges of the kind which are required (or, in the case of a Company registered in Scotland, which, if the Company had been registered in England, would be required) to be registered with the Registrar of Companies under the Companies Act, 1929. Copy of last audited Balance Sheet of the Company. Nore.—Except where the Company is (1) a ‘Private Company” within the meaning of Section 26 of the Companies Act, 1929, or is (2) an Assurance Company which has complied with the provisions of Section 7 (4) of the Assurance Companies Act, 1909, this Return must include a written copy, certified by a Director or by the Manager or Secretary of the Company to be a true copy, of the last balance sheet which has been audited by the Company's auditors (including every document required by law to be annexed thereto) together with a copy of the report of the auditors thereon (certified as aforesaid), and if any such balance sheet is in a foreign language there must also be annexed to it a translation thereof in English certified * Where various amounts have been called, or there are shares of different kinds. state them separately. t Include what has been received on forfeited as well ac on exicting charec 784 SECRETARIAL PRACTICE in the prescribed manner to be a correct translation. If the said last balance sheet did not comply with the requirements of the law as in force at the date of the audit with respect to the form of balance sheets there must be made such additions to and corrections in the said copy as would have been required to be made in the said balance sheet in order to make it comply with the said requirements, and the fact that the said copy has been so amended must be stated thereon. Private Company. Certificates to be given by a Private Company. A. “I certify that the Company has not since the date of the “llast Annual Return issued any invitation to the public to subscribe “for any shares or debentures of the Company.” (Signature) (State whether Director or Secretary.) B. Should the number of members of the Company exceed fifty the following certificate is also required: — “I certify that the excess of members of the Company above “fifty consists wholly of person who are in the employment “of the Company and/or of person who, having been formerly “in the employment of the Company were while in such employ-“ment, and have continued after the determination of such “employment to be, members of the Company.” (Signature) (State whether Director or Secretary.) NoteE.—Banking companies must add a list of all their places ot business. The Return must be signed at the end by a Director or by the Manager or Secretary of the Company. Delivered for filing by Particulars of the *Directors of the Company, Limited, at the date of the Annual Return. The present Christian Name or Tames and Riirnarme Any former Christian Name or Names or aHrname Nationality tionality »f origin (i sther than the present ABE ipn A lisesy Usual residential address. 1 Other business occupation if any. If none state so 1In the case of the first Annual Return strike out the words “last Annual Return’’ and substitute therefor the words ‘Incorporation of the Company.” * “Director” includes any person who occupies the position of a Director by whatever name called and any person in accordance with whose directions or instructions the Directors of a Company are accustomed to act. nt In the case of a Corporation its corporate name and registered or principal office should be shown. 1 In the case of an individual who has no business occupation but holds any other directorship or directorships particulars of that directorship or of some one of those directorships must be entered COMPANIES ACT, 10929 wld 7% List of Persons holding Shares in the Company, Limited, on the day of 19 , and of Persons who have held Shares therein at any time since the date of the last Return, or (in the case of the first Return) of the incorporation of the Company, showing their Names and Addresses, and an Account of the Shares so held. N.B.—If the names in this list are not arranged in alphabetical order, an index sufficient to enable the name of any person in the list to be readilv found must be annexed to this list. Folio in Register Ledger containing Particulars NAMES, ADDRESSES AND OCCUPATIONS “Number f Shares neld by existing embers i Date of Return ACCOUNT OF SHARE: + Particulars of Shares transferred since the date of he last Return, or in the case of the first Return) of the incorporation of the Company, by Persons who are still Members 1 Particulars of Shares transferrec since the date of ‘he last Return, or ‘in the case of the first Return) of the incorporatior of the Company, by Persons who have ceased to be Members Num ber - Date of Registration of Trancfar Nurr be ate of Registra tion of Nranc<fer (Signature) ‘State whether Director or Manager or Secretar * The aggregate Number of Shares held, and not the Distinctive Numbers, must be stated, and the column must be added up throughout so as to make one total to agree with that stated in the Summary to have been taken up. t+ When the Shares are of different classes these columns may be subdivided so that the number of each class held, or transferred, may be shown separately. “Where any Shares have been converted into Stock the amount of Stock held by each member must be shown. 1 The date of Registration of each Transfer should be given as well as the Number of Shares transferred on each date. The Particulars should be placed opposite the name of the Transferor, and not opposite that of the Transferee, but the name of the Transferee mav be inserted in the * Remarks” column immediately opposite the particulars of each Transfer Section 131. 786 SECRETARIAL PRACTICE SEVENTH SCHEDULE. ForM OF STATEMENT TO BE PUBLISHED BY BANKING AND INSURANCE COMPANIES AND DEPOSIT, PROVIDENT, OR BENEFI] SOCIETIES. * The share capital of the company is ~, divided into shares of each. The number of shares issued is ‘ Calls to the amount of pounds per share have been made, under which the sum of pounds has been received. The liabilities of the company on the first day of January (or July® were— Debts owing to sundry persons by the company. On judgment, £ On specialty, £ On notes or bills, £ On simple contracts, £ On estimated liabilities, £ [he assets of the company on that day were-Government securities [stating them) Bills of exchange and promissory notes Cash at the bankers, ~ Other securities, * If the company has no share capital the portion of the statement relating to capital and shares must be omitted. Section 224. EIGHTH SCHEDULE. Part I. ORDERS PRONOUNCED IN VACATION IN SCOTLAND WHICH ARE TO BE FINAT S. 210. S. 214. S. 288. Pe =50. 291. Orders: — As to time for proving claims. As to the attendance of, and production of documents by, persons indebted to, or having property of, or information as to the affairs or property of, a company. As to meetings for ascertaining wishes of creditors or contributories. As to summoning meetings of creditors or contributories where a compromise is proposed. As to the examination of witnesses in regard to the property or affairs of a company COMPANIES ACT, 1929 7 Part II. ORDERS PRONOUNCED IN VACATION IN SCOTLAND WHICH ARE TO TAKE EFFECT UNTIL RECLAIMING NOTE DISPOSED OF. Orders :— Restraining or permitting commencement or continuance of legal Ss 1, 177, 202, proceedings. 336, 340, 341. Appointing an official liquidator to fill a vacancy, or appointing ss. 188, 249, 259. (except to fill a vacancy caused by the removal of a liquidator by the court) a liquidator for a winding up voluntarily or under supervision. Sanctioning the exercise of any power by an official liquidator s. ror. other than the powers specified in paragraphs (d), (¢) and (f) of subsection (1) and the power to appoint a law agent. Requiring the delivery of property or documents tv t..e official s. 204. liquidator. As to the arrest and detention of an absconding contribuic "vy and o. 21 his property. Limiting the powers of provisional official liquidator. For continuance of winding up under supervision "NTH SCHEDUI E PROVISIONS WHICH DO NOT APPLY IN THE CASE OF A SUBTECT TO SUPERVISION OF THE COURT WINDING UP 5 ,60 Statement of Companies affairs to be submitted to Official Receiver. s. sr. Report by Official Receiver. S. 182, Power of Court to appoint Liquidator. S. 183. Appointment and powers of provisional Liquidator. S. 184. Appointment, style, &c., of Liquidators in English winding up. s. 18s. Provisions where person other than Official Receiver is appointed s. 186 Liquidator. Provisions as to Liquidators in Scottish winding us S. 187. General provisions as to Liquidators. S. 188 excep! y . ” . . subs. (5). Exercise and control of Liquidators powers in Englanc S. 192. Books to be kept by Liquidator in English winding S. 193. Payments of Liquidator in English winding up into ba. S$ 194. Audit of Liquidators’ accounts in English winding - 195. Control of Board of Trade over Liquidators in Ene. 5. 196. Release of Liquidators in England. S. 197. Meeting of creditors and contributories to determine whether s, 108. committee of inspection shall be appointed S. 199. S. 200. S. 201. S. 209. S. 216. 3. 217. S. 220. S. 307. 788 SECRETARIAL PRACTICE Constitution and proceedings of committee of inspection. Powers of Board of Trade where no committee of inspection in England. Additional powers of committee of inspection in Scotland. Appointment in England of special manager. Power in England to order public examination of promoters directors, &c. Power in England to restrain fraudulent persons from managing companies. Delegation to Liquidator of certain powers of court in England. Power in England to appoint Official Receiver as receiver for debenture holders or creditors. TENTH SCHEDULE. Sections 313, 329, 379. TABLE OF FEES TO BE PAID TO THE REGISTRAR OF COMPANIES I1.—Byvy A COMPANY HAVING A SHARE CAPITAL. . s. d. For registration of a company whose nominal share 4 capital does not exceed 2,000/. - - - - For registration of a company whose nominal share capital exceeds 2,000/.,, the following fees, regulated according to the amount of nominal share capital ‘that is to say); £ s. d. For every 1,000!/. of nominal share capital, or part of 1,000l., up to 5,000l. - - For every 1,000!/. of nominal share capital, or part of 1,000/., after the first 5,000l., up to 100,000. - - - - - For every 1,000!. of nominal share capital, or part of 1,000/., after the first 100,000. 0 1 © For registration of any increase of share capital made after the first registration of the company, the same fees per 1,000l., or part of a 1,000!l., as would have been payable if the increased share capital had formed part of the original share capital at the time of registration: Provided that no company shall be liable to pay in respect of nominal share capital, on registration or afterwards, any greater amount of fees than 50/., taking into account in the case of fees payable on an increase of share capital after registration the fees paid on registration. For registration of any existing company, except such companies as are by this Act exempted from payment of fees in respect of registration under this Act, the same fee as is charged for registering a new company 0 COMPANIES ACT. 1020 For registering any document by this Act required or authorised to be registered or required to be delivered sent or forwarded to the registrar other than the memorandum or the abstract required to be delivered to the registrar by a receiver or manager or the statement required to be sent to the registrar by the liquidator in a winding-up in England - - - For making a record of any fact by this Act required or authorised to be recorded bv the registrar - [I.—By A COMPANY NOT HAVING A SHARE CAPITA; For registration of a company whose number of members as stated in the articles does not exceed 25 - - - For registration of a company whose number of members as stated in the articles exceeds 25, but does not exceed 100, the above fee of 2/. with an additional 1/. for every additional 25 members or less after the first 25 - For registration of a company whose number of members as stated in the articles exceeds 100 but is not stated to be unlimited, a fee+of 5/. with an additional 5s. for every additional 50 members or less after the first 100 - For registration of a company in which the number of members is stated in the articles to be unlimited - For registration of any increase on the number of members made after the registration of the company in respect of every 50 members, or less than 50 members, of that increase - - - Provided that no company shall be liable to pay on the whole a greater fee than 20!l. in respect of its number of members, taking into account the fee paid on the first registration of the company. For registration of any existing company, except such companies as are by this Act exempted from payment of fees in respect of registration under this Act, the same fee as is charged for registering a new company. For registering any document by this Act required or authorised to be registered or required to be delivered, sent or forwarded to the registrar, other than the memorandum or the abstract required to be delivered to the registrar by a receiver or manager or the statement required to be sent to the registrar by the liquidator in a winding up in England - - For making a record of any fact by this Act required or authorised to be recorded bv the registrar 790 SECRETARIAL PRACTICE III.—By A CoMPANY TO WHICH PART XI OF THIS ACT APPLIES. For registering any document required to be delivered to the registrar under Part XI of this Act, except documents required to be delivered under section three hundred and fifty-three of this Act OO g I ELEVENTH SCHEDULE 3S. 362. S. 15. S. 35. S. 40. S. 42. S. 79. 5. 8o (1). S. 81. S. go. 3. 94. 3. 108 (3) (») (0). S. 113. S. 134 (1) (2). 5. 140. S. 250. S. 310. S. 344. S. 46. S. 347. S. 348. 5. 376. PROVISIONS REFERRED TO IN SECTION 362 OF THE ACT. Provisions relating to— Conclusiveness of certificate of incorporation; Specific requirements as to particulars in prospectus; Prohibition of allotment in certain cases unless statement in lieu of prospectus delivered to registrar; Return as to allotments; , Registration of charges created by company registered in England; Duty of company to register charges created by company; Duty of company to register charges existing on property acquired; Application of Part III to companies incorporated outside England; Restrictions on commencement of business; The particulars as to directors and indebtedness of the company; Statutory meeting and statutory report; Auditors’ report and right to information and explanations; Restrictions on appointment or advertisement of director; Notice by liquidator of his appointment; Delivery to registrar of accounts of receivers and managers; Documents, &c., to be delivered to registrar by companies carrying on business in Great Britain; Return to be delivered to registrar where documents, &c., altered; Balance sheet of company carrying on business in Great Britain; Obligation to state name of company, &c. Annual report bv Board of Trade. COMPANIES ACT, 1929 TWELFTH SCHEDULE PART Section 381. KNACTMENTS REPEALET Session and Chapter Short ™ Li Extent of Repeai. 45 & 46 Vict. Cc. 72. The Revenue. Societies an Debt Act 774» Friendly Nationa) Section eleven, and in the First Schedule the words “7 Geo. IV. c. 46, 7 Geo. “IV, ¢c. 67, 7 & 8 Vict. “c. 32, s. 21, 8 & 9 Vict. “c. 38,8. 17 7 The whole ._ 8 Edw. 7. ¢. 69| The Companies (Consolidation) Act, 1908. The Foreign Jurisdiction|In the Schedule, the words Act, 1913. from “8 Edw. 7” to the ' end. The Companies Act, 1913 The whole Act. 3 & 4 Geo. 5 Cc. 25. 7 & 8 Geo. 5 c 28 ‘The Companies (Particulars as to Directors! Act, 1917. 10 & 11 Geo. 5/The Unemployment Inc. 30. | surance Act, 1920. I4 & 15 Geo. 5 The National Health Inc. 38. , surance Act, 1924. 15 & 16 Geo. 5, The Workmen's Compenc. 84. sation Act, 1925. The whole Ac. Subsections (1), (2) and (5, of section twenty-six. Section one hundred anc six. In subsection (3) of section seven, paragraphs (ii) and (i), the words ‘the “following date, that is “tosay:— “(a) in the first case,” and paragraphs (b) and (c); subsection (4); in subsection (5) the words “or the company’; subsection (6). The Fourth Schedule, so far as it amends subsection (1) of section twentysix of the Unemployment Insurance Act, 102¢ laragrenl 7 of gectior nin. “he whole 17 & 18 Geo. 5,The Unemployment In. surance Act, 1927. 18 & 19 Ge. Cc. 14. 18 & 19 Geo. 5 C. 45. "une National Hea® surance Act, ; 9g. Tae Companies Act, , Section 382. 792 SECRETARIAL PRACTICE Part II. ENACTMENTS SAVED. AN AcT 10 REGULATE JOINT STOCK BANKS IN ENGLAND (7 & 8 Vict C. II3, S. 47). Existing com- Every company of more than six persons established on the sixth es wore of day of May, one thousand eight hundred and forty-four, for the suing and being purpose of carrying on the trade or business of bankers within the sued. distance of sixty-five miles from London, and not within the provisions of the Act passed in the session ot the seventh and eighth years of Queen Victoria, chapter one hundred and thirteen, intituled “An Act to regulate Joint Stock Banks in England,” shall have the same powers and privileges of suing and being sued in the name of any one of the public officers of such co-partnership as the nominal plaintiff, petitioner, or defendant on behalf of such co-partnership; and all judgments, decrees, and orders made and obtained in any such suit may be enforced in like manner as is provided with respect to such companies carrying on the said trade or business at any place in England exceeding the distance of sixty-five miles from London under the provisions of the Country Bankers Act, 1826, provided that such first-mentioned company shall make out and deliver from time to time to the Commissioners of Inland Revenue the several accounts or returns required by the last-mentioned Act, and all the provisions of the last-recited Act as to such accounts or returns shall be taken to apply to the accounts or returns so made out and delivered by such first-mentioned companies as if they had been originally included in the provisions of the last-recited Act. Tue JoiNT Stock BANKING COMPANIES ACT, 1857, PART OF Ss. 12 Power to form banking partnerships of ten Jersons. Notwithstanding anything contained in any Act passed in the session holden in the seventh and eighth years of Queen Victoria, chapter one hundred and thirteen, and intituled ‘ An Act to regulate Joint Stock Banks in England,” or in any other Act, it shall be lawful for any number of persons, not exceeding ten, to carry on in partnership the business of banking, in the same manner and upon the same conditions in all respects as any company of not more than six persons could before the passing of the Joint Stock Banking Companies Act, 1857, have carried on such business. APPENDIX J [Permission has been given for this reprint, but it does not purport to be published ‘by authority.) Registration of Business Names Act, 1016 6 & 7 Geo. V, c. 58] [22nd December, 1916, ARRANGEMENT OF SECTIONS. Firms and persons to be registered. Registration by nominee, &c. Manner and particulars of registration. Statement to be signed by persons registering. Time for registration. Registration of changes in firm. Penalty for default in registration. Disability of persons in default. Penalty for false statements. Duty to furnish particulars to Board of Trade. Registrar to file statement and issue certificate of registration Index to be kept. Removal of names from register. Misleading business names. Registrar. [nspection of statements registered. Power for Board of Trade to make rules Publication of true names, &c. Offences by Corporations. Mode of action by the Board of Trade. Remuneration for duties under this Act. [nterpretation of terms. Application to Scotland Application to Ireland. Short title. SCHEDULE i. 3 5. 6. 7 8. 9. 10. II. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. BE it enacted by the King’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled. and bv the authority of the same. as follows: Firms and persons to be registered. Registration by nominee, &c. 794 SECRETARIAL PRACTICE I.—Subject to the provisions of this Act— (a) Every firm having a place of business in the United Kingdom and carrying on business under a business name which does not consist of the true surnames of all partners who are individuals and the corporate names of all partners who are corporations without any addition other than the true Christian names of individual partners or initials of such Christian names; Every individual having a place of business in the United Kingdom and carrying on business under a business name which does not consist of his true surname without any addition other than his true Christian names or the initials thereof; Every individual or firm having a place of business in the United Kingdom, who, or a member of which, has either before or after the passing of this Act changed his name, except in the case of a woman in consequence of marriage; shall be registered in the manner directed by this Act: Provided that— (i) where the addition merely indicates that the business is carried on in succession to a former owner of the business, that addition shall not of itself render registration necessary; and where two or more individual partners have the same surname, the addition of an s at the end of that surname shall not of itself render registration necessary; and (iii) where the business is carried on by a trustee in bankruptcy or a receiver or manager appointed by any court, registration shall not be necessary; and a purchase or acquisition of property by two or more persons as joint tenants or tenants in common is not ot itself to be deemed carrying on a business whether or not the owners share any profits arising from the sale thereof. 2.—Where a firm, individual, or corporation having a place ot business within the United Kingdom carries on the business wholly or mainly as nominee or trustee of or for another person, or other persons, or another corporation, or acts as general agent for any foreign firm, the first-mentioned firm, individual, or corporation shall be registered in manner provided by this Act, and, in addition to the other particulars required to be furnished and registered, there shall be furnished and registered the particulars mentioned in the schedule to this Act: Provided that where the business is carried on by a trustee in bankruptcy or a receiver or manager appointed by any court, registration under this section shall not be necessary. REGISTRATION OF BUSINESS NAMES ACT, 1916 795 3.—(1) Every firm or person required under this Act to be registered shall furnish by sending by post or delivering to the registrar at the register office in that part of the United Kingdom in which the principal place of business of the firm or person is situated a statement in writing in the prescribef form containing the following particulars: — The business name; The general nature of the business; The principal place of the business; Where the registration to be effected is that of a firm, the present Christian name and surname, any former Christian name or surname, the nationality, and if that nationality is not the nationality of origin, the nationality of origin, the usual residence, and the other business occupation (if any) of each of the individuals who are partners, and the corporate name and registered or principal office of every corporation which is a partner; Where the registration to be effected is that of an individual, the present Christian name and surname, any former Christian name or surname, the nationality, and if that nationality is not the nationality of origin, the nationality of origin, the usual residence, and the other business occupation (if any) of such individual; Where the registration to be effected is that of a corporation, its corporate name and registered or principal office; If the business is commenced after the passing of this Act, the date of the commencement of the business. € Manner and particulars of registration. (2) Where a business is carried on under two or more business names, each of those business names must be stated. 4.—The statement required for the purpose of registration must in the case of an individual be signed by him, and in the case of a corporation by a director or secretary thereof, and in the case of a firm either by all the individuals who are partners, and by a director or the secretary of all corporations which are partners by some individual who is a partner, or a director or the secretary of some corporation which is a partner, and in either of the last two cases must be verified by a statutory declaration made by the signatory: Provided that no such statutory declaration stating that any person other than the declarant is a partner, or omitting to state that any person other than as aforesaid is a partner, shall be evidence for or against any such other person in respect of his liability or non-liability as a partner, and that the High Court or a judge thereof may on application of any person alleged or claiming to be a partner direct the rectification of the register and decide any question arising under this section. 5.—The particulars required to be furnished under this Act shall be furnished within fourteen days after the firm or person commences business, or the business in respect of which registration is required. as the case mav be: Provided that if such firm Statement to be signed by persons regis tering. Time for ~egistration 796 SECRETARIAL PRACTICE or person has carried on such business before the passing of this Act or commences such business within two months thereafter, the statement of particulars shall be furnished after the expiration of two months and before the expiration of three months from the passing of this Act, and that if at the expiration of the said two months the conditions affecting the firm or persons have ceased to be such as to require registration under this Act, the firm or person need not be registered so long as such conditions continue. This section shall apply, in the case where registration is required in consequence of a change of name, as if for references to the date of the commencement of the business there were substituted references to the date of such change. Registration of changes in firm. Penalty for default in registration. Disability of persons in default. 6.—Whenever a change is made or occurs in any of the particulars registered in respect of any firm or person such firm or person shall, within fourteen days after such change, or such longer period as the Board of Trade may, on application being made in any particular case, whether before or after the expiration of such fourteen days, allow, furnish by sending by post or delivery to the registrar in that part of the United Kingdom in which the aforesaid particulars are registered a statement in writing in the prescribed form specifying the nature and date of the change signed, and where necessary verified, in like manner as the statement required on registration. »v—If any firm or person by this Act required to furnish a statement of particulars or of any change in particulars shall without reasonable excuse make default in so doing in the manner and within the time specified by this Act, every partner in the firm or the person so in default shall be liable on summary conviction to a fine not exceeding five pounds for every day during which the default continues, and the court shall order a statement of the required particulars or change in the particulars to be furnished to the registrar within such time as may be specified in the order. 8.—(1) Where any firm or person by this Act required to furnish a statement of particulars or of any change in particulars shall have made default in so doing, then the rights of that defaulter under or arising out of any contract made or entered into by or on behalf of such defaulter in relation to the business in respect to the carrying on of which particulars were required to be furnished at any time while he is in default shall not be enforceable by action or other legal proceeding either in the business name or otherwise: Provided always as follows: — (a) The defaulter may apply to the court for relief against the disability imposed by this section, and the court, on being satisfied that the default was accidental or due to inadvertence, or some other sufficient cause, or that on other grounds it is just and equitable to grant relief, REGISTRATION OF BUSINESS NAMES ACT, 1916 797 (b) may grant such relief either generally, or as respects any particular contracts, on condition of the costs of the application being paid by the defaulter, unless the court otherwise orders, and on such other conditions (if any) as the court may impose, but such relief shall not be granted except on such service and such publication of notice of the application as the court may order, nor shall relief be given in respect of any contract if any party to the contract proves to the satisfaction of the court that, if this Act had been complied with, he would not have entered into the contract; Nothing herein contained shall prejudice the rights of any other parties as against the defaulter in respect of such contract as aforesaid: If any action or proceeding shall be commenced by any other party against the defaulter to enforce the rights of such party in respect of such contract, nothing herein contained shall preclude the defaulter from enforcing in that action or proceeding, by way of counterclaim set off or otherwise, such rights as he may have against that party in respect of such contract. (2) In this section the expression ‘‘ court’ means the ‘“ High Court” or a judge thereof: Provided that, without prejudice to the power of the High Court or a judge thereof to grant such relief as aforesaid, if any proceeding to enforce any contract is commenced by a defaulter in a county Court, the county court may, as respects that contract grant such relief as aforesaid. ao.—If any statement required to be furnished under this Act Penalty for 7 7 y . . y false statecontains any matter which is false in any material particular to ments. the knowledge of any person signing it, that person shall, on summary conviction, be liable to imprisonment with or without hard labour for a term not exceeding three months, or to a fine not exceeding twenty pounds. or to both such imprisonment and fine 10.—(1) The Board of Trade may require any person to furnish to the Board such particulars as appear necessary to the Board for the purpose of ascertaining whether or not he or the firm of which he is partner should be registered under this Act, or an alteration made in the registered particulars, and may also in the case of a corporation require the secretary or any other officer of a corporation performing the duties of secretary to furnish such particulars, and if any person when so required fails to supply such particulars as it is in his power to give, or furnishes particulars which are false in any material particular, he shall on summary conviction be liable to imprisonment with or without hard labour for a term not exceeding three months or to a fine not exceeding twenty pounds or to both such imprisonment and fine Duty to furnish particulars to Board of Trade 708 SECRETARIAL PRACTICE (2) If from any information so furnished it appears to the Board of Trade that any firm or person ought to be registered under this Act, or an alteration ought to be made in the registered particulars, the Board may require the firm or person to furnish to the registrar the required particulars within such time as may be allowed by the Board, but, where any default under this Act has been discovered from the information acquired under this section, no proceedings under this Act shall be taken against any person in respect of such default prior to the expiration of “he time within which the firm or person is required by the Board under this section to furnish particulars to the registrar. Registrar to file statement and issue certificate of registration. Index to be kept. Removal of names from register. Misleading business names. 11.—On receiving any statement or statutory declaration made in pursuance of this Act the registrar shall cause the same to be filed, and he shall send by post or deliver a certificate of the registration thereof to the firm or person registering and the certificate or a certified copy thereof shall be kept exhibited in a conspicuous position at the principal place of business of the firm or individual, and if not kept so exhibited, every partner in the firm or the person, as the case may be, shall be liable on summary conviction to a fine not exceeding twenty pounds. 12.—At each of the register offices hereinafter referred to the registrar shall keep an index of all the firms and persons registered at that office under this Act. 13.—(1) If any firm or individual registered under this Act ceases to carry on business, it shall be the duty of the persons who were partners in the firm at the time when it ceased to carry on business or of the individual or if he is dead his personal representative, within three months after the business has ceased to be carried on, to send by post or deliver to the registrar notice in the prescribed form that the firm or individual has ceased to carry on business, and if any person whose duty it is to give such notice fails to do so within such time as aforesaid, he shall be liable on summary conviction to. a fine not exceeding twenty pounds. (2) On receipt of such a notice as aforesaid the registrar may remove the firm or individual from the register. (3) Where the registrar has reasonable cause to believe that any firm or individual registered under this Act is not carrying on business he may send to the firm or individual by registered post a notice that, unless an answer is received to such notice within one month from the date thereof, the firm or individual may be removed from the register. (4) If the registrar either receives an answer from the firm or individual to the effect that the firm or individual is not carrying on business or does not within one month after sending the notice receive an answer, he may remove the firm or individual from the register. 14.—(1) Where any business name under which the business of a firm or individual is carried on contains the word ‘ British’’ or REGISTRATION OF BUSINESS NAMES ACT, 1916 799 any other word which, in the opinion of the registrar, is calculated to lead to the belief that the busines is under British ownership or control, and the registrar is satisfied that the nationality of the persons by whom the business is wholly or mainly owned or controlled is at any time such that the name is misleading, the registrar shall refuse to register such business name or, as the case may be, remove such business name from the register, but any person aggrieved by a decision of the registrar under this provision may appeal to the Board of Trade, whose decision shall be final. (2) The registration of a business name under this Act shall not be construed as authorising the use of that name if apart from such registration the use thereof could be prohibited. 15. There shall be offices in London, Edinburgh, and Dublin for the registration of firms and persons whose principal places of business are respectively situated in England and Wales, Scotland, and Ireland, and the registrar of companies in each of those cities or such other person as the Board of Trade may determine shall be the registrar for the purposes of this Act. 16. At any time after the expiration of six months from the passing of this Act or of such longer period, not being more than nine months from the passing of this Act, as the Board of Trade may by order direct, any person may inspect the documents filed by the registrar on payment of such fees as may be prescribed not exceeding one shilling for each inspection; and any person may require a certificate of the registration of any firm or person, or a copy of or extract from any registered statement to be certified by the registrar or assistant registrar, and there shall be paid for such certificate of registration, certified copy, or extract such fees as may be prescribed not exceeding two shillings for the certificate of registration, and not exceeding sixpence for each folio of seventy-two words, or in Scotland for each sheet of two hundred words, of the entry, copy, or extract. A certificate of registration, or a copy of or extract from any statement registered under this Act, if duly certified to be a true copy or extract under the hand of the registrar or one of the assistant registrars (whom it shall not be necessary to prove to be the registrar or assistant registrar), shall, in all legal proceedings. civil or criminal, be received in evidence. 17.—(1) The Board of Trade may make rules (but as to fees with the concurrence of the Treasury) concerning any of the following matters— ~The fees t~ be paid to the registrar under this Act, so that the, ue not exceed the sum of five shillings for «he =r _L.-lion oi any one statemen; . -orms i. be used under this Ac, duties to be performed by anv registrar under this Registrar Inspection of statements registered. Power for Board of I'rade to make riilec Roo SECRETARIAL PRACTICE (d) The performance by assistant registrars and other officers of acts by this Act required to be done by the registrar; Generally the conduct and regulation of registration under this- Act, and any matters incidental thereto. (2) All fees payable in pursuance of any such rules shall be applied as the Treasury may direct. Publication of 18.—(1) After the expiration of three months from the passing ‘rue names, &¢. of this Act every individual and firm required by this Act to be registered shall, in all trade catalogues, trade circulars, showcards, and business letters, on or in which the business name appears and which are issued or sent by the individual or firm to any person in any part of His Majesty’s dominions, have mentioned in legible characters— (a) in the case of an individual, his present Christian name or the initials thereof and present surname, any former Christian name or surname, his nationality if not British, and if his nationality is not his nationality of origin his nationality of origin; and in the case of a firm, the present Christian names, or the initials thereof and present surnames, any former Christian names and surnames, and the nationality if not British, and if the nationality is not the nationality of origin the nationality of origin of all the partners in the firm or, in the case of a corporation being a partner, the corporate name. (2) If default is made in compliance with this section the individual or, as the case may be, every member of the firm shall be liable on summary conviction for each offence to a fine not exceeding five pounds. Provided that no proceedings shall in England or Ireland be instituted under this section except by or with the consent of the Board of Trade. 19. Where a corporation is guilty of an offence under this Act svery director, secretary, and officer of the corporation who is knowingly a party to the default shall be guilty of a like offence and liable to a like penalty. 20. Anything required or authorised by this Act to be done by the Board of Trade may be done by the President or a Secretary or Assistant Secretary of the Board, or any other person authorised in that behalf by the President of the Board. 21. There shall be paid out of moneys to be provided by Parliament such remuneration in respect of the duties performed under this Act as the Treasury may assign. Interpretation 22. In the construction of this Act the following words and OLS, expressions shall have the meanings in this section assigned to them, unless there be something in the subject or context repugnant to such construction :— 'b) REGISTRATION OF BUSINESS NAMES ACT, 1916 8o1 “Firm” shall mean an unincorporated body of two or more individuals, or one or more individuals and one or more corporations, or two or more corporations, who have entered into partnership with one another with a view to carrying on business for profit, but shall not include any unincorporated company which was in existence on the second day of November eighteen hundred and sixty-two: *“ Business’ shall include profession: “Individual” shall mean a natural person and shall not include a corporation: “Christian name” shall include any forename: “Initials” shall include any recognised abbreviation of a Christian name: In the case of a peer or person usually known by a British title different from his surname, the title by which he is known shall be substituted in this Act for his surname: References in this Act to a former Christian name or surname shall not, in the case of natural-born British subjects, include a former Christian name or surname where that name or surname has been changed or disused before the person bearing the name had attained the age of eighteen years, and in the case of a married woman, shall not include the name or surname by which she was known previous to the marriage: References in this Act to a change of name shall not include, in the case of natural-born British subjects, a change of name which has taken place before the person whose name has been changed has attained the age of eighteen years; or, in the case of a peer or a person usually known by a British title different from his surname, the adoption of or succession to the title: “Business name’ shall mean the name or style under which any business is carried on, whether in partnership or otherwise: “Foreign firm” shall mean any firm, individual, or corporation whose principal place of business is situate outside His Majesty’s dominions: “Showcards’’ shall mean cards containing or exhibiting articles dealt with, or samples or representations thereof : “Prescribed” shall mean prescribed bv rules made in pursuance of this Act. 23.—(1) In the application of this Act to Scotlana-“Court of Session” shall be substituted for “Hig “Sheriff court” shall be substituted for ““countv “Trustee on a sequestrated estate” shall be subs. “trustee in bankruptcy”; “Receiver or manager appointed by any court’ shall include “1udicial factor’: and “du Application to Scotland R02 SECRETARIAL PRACTICE ‘“ Joint tenants’ and ‘tenants in common” shall mean pro indiviso proprietors. Application to 24. In the application of this Act to Ireland the expression reland “trustee in bankruptcy” shall be construed as including an assignee in bankruptcy and a trustee of the estate of an arranging debtor. 25. This Act may be cited as the Registration of Business Names Act, 1916. Short title. Section 2. Schedule Description of Firm, &c. The additional Particulars The present Christian name and surname, any former name, nationality, and, if that nationality is not the nationality of origin, the nationality of origin, and usual residence, or, as the case may be, the corporate name, of every person or corporation on whose behalf the business is carried on: Provided that if the business is carried on under any trust and any of the beneficiaries are a class of children or other persons, a description of the class shall be sufficient. [ he business name and address of the firm or person as agent for whom the business is carried on: Provided that if the business is carried on as agent for three or more foreign firms it shall be sufficient to state the fact that the business is so carried on, specifying the countries in which such foreign firms carry on business. Where the firm, individual, or corporation required to be registered carries on business as nominee or trustee. Where the firm, individual, or corporation required to be registered carries on business as general agent for any foreign firm. APPENDIX K Winding-up Rules "Permission has been given for this reprint, but it does not purport to be published ‘ by authority.” ‘EXTRACTS FROM ‘‘ THE CoMPANIES (WINDING-UP) RULES, 1929, DATED AUGUST 29, ° MADE PJRSUANT TO THE COMPANIES - “ROL: 90. A debt may be proved in any winding-up by delivering or Mode of proof sending through the post an affidavit verifying the debt. In a winding-up by the Court the affidavit shall be so sent to the Official Receiver or if a Liquidator has been appointed, to the Liquidator; and in any other winding-up the affidavit may be so sent to the Liquidator. 91. An affidavit proving a debt may be made by the creditor himself or by some person authorised by or on behalf of the creditor. If made by a person so authorised. it shall state his authority and means of knowledge. Verification of nroof 92. An affidavit proving a debt shall contain or refer to a state- Contents of ment of account showing the particulars of the debt, and shall Proof. specify the vouchers if any, by which the same can be substantiated. Form so The Official Receiver or Liquidator to whom the proof is sent may at anv time call for the production of the vouchers 93. An affidavit proving a debt shall state whether the creditor Statement of is or is not a secured creditor security 94. An affidavit proving a debt may in a winding-up by the Proof before Court be sworn before an Official Receiver, or Assistant Official “bom sworn Receiver, or any Officer of the Board of Trade or any clerk of an Official Receiver duly authorised in writing bv the Court or the Board of Trade in that behalf SECRETARIAL PRACTICE Costs of proof. 95. A creditor shall bear the cost of proving his debt unless the Court otherwise orders. Discount. Periodical pay: ments. interest. Proof for debt payable at a future time. Proof under section 264. Workmen's vages Form 60 96. A creditor proving his debt shall deduct therefrom (a) any discount which he may have agreed to allow for payment in cash in excess of five per centum on the net amount of his claim and (b) all frade discounts. 97. When any rent or other payment falls due at stated periods, and the order or resolution to wind-up is made at any time other than one of those periods, the persons entitled to the rent or payment may prove for a proportionate part thereof up to the date of the winding-up order or resolution as if the rent or payment grew due from day to day. Provided that where the Liquidator remains in occupation of premises demised to a Company which is being wound up, nothing herein contained shall prejudice or affect the right of the andlord of such premises to claim payment by the Company, or the Liquidator, of rent during the period of the Company’s or the Liguidator’s occupation. 98. On any debt or sum certain, payable at a certain time or otherwise, whereon interest is not reserved or agreed for, and which is overdue at the date of the commencement of the winding-up, the creditor may prove for interest at a rate not exceeding four per centum per annum to that date from the time when the debt or sum was payable, if the debt or sum is payable by virtue of a written instrument at a certain time, and if payable otherwise, then from the time when a demand in writing has been made, giving notice that interest will be claimed from the date of the demand until the rime of payment. 99. A creditor may prove for a debt not payable at the date of the winding-up order or resolution, as if it were payable presently, and may receive dividends equally with the other creditors, deducting only thereout a rebate of interest at the rate of five per centum per annum computed from the declaration of a dividend to the time when the debt would have become payable according to the terms on which it was contracted. 100. Unless the Official Receiver or Liquidator shall in any special case otherwise direct formal proof of the debts mentioned in paragraph (¢) of subsection (1) of section 264 of the Act shall not be required. 101. In any case in which it appears that there are numerous claims for wages by workmen and others employed by the Company, it shall be sufficient if one proof for all such claims is made either by a foreman or by some other person on behalf of all such creditors. Such proof shall have annexed thereto as forming part thereof, a schedule setting forth the names of the workmen and others, and the amounts severally due to them. Any proof made in compliance with this Rule shall have the same effect as if separate proofs had been made by each of the said workmen and others. 102 & 103 WINDING-UP RULES ADMISSION AND REJECTION OF PROOFS AND PREFERENTIAL CLAIMS AND APPEAL TO THE COURT. 104.—(1) Subject to the provisions of the Act, and unless otherwise ordered by the Court, the Liquidator in any winding-up may from time to time fix a certain day, which shall be not less than fourteen days from the date of the notice, on or before which the creditors of the Company are to prove their debts or claims, and to establish any title they may have to priority under section 264 of the Act, or to be excluded from the benefit of any distribution made before such debts are proved, or as the case may be from objecting to such distribution. (2) The Liquidator shall give notice in writing of the day sc fixed by advertisement in such newspaper as he shall consider convenient, and in a winding-up by the Court to every person mentioned in the Statement of Affairs as a creditor, and who has not proved his debt, and to every person mentioned in the Statement of Affairs as a preferential creditor whose claim to be a preferential creditor has not been established and is not admitted, and in any other windingup to the last known address or place of abode of each person who, to the knowledge of the Liquidator, claims to be a creditor or preferential creditor of the Company and whose claim has not been admitted. (3) All the Rules hereinafter set out as to admission and rejection of proofs shall apply with the necessary variations to anv such claim to priority as aforesaid. 105. The Liquidator shall examine every proof of debt lodged with him, and the grounds of the debt, and in writing admit or reject it, in whole or in part, or require further evidence in support of it. If he rejects a proof he shall state in writing to the creditor the grounds of the rejection. Notice to Creditors tc Drove. Examination of proof. Form 61 106. If a creditor or contributory is dissatisfied with the decision Appeal by of the Liquidator in respect of a proof, the Court may, on the applica- creditor. tion of the creditor or contributory, reverse or vary the decision; but, subject to the power of the Court to extend the time, no application to reverse or vary the decision of the Liquidator in a winding-up by the Court rejecting a proof sent to him by a creditor, or person claiming to be a creditor, shall be entertained, unless notice of the application is given before the expiration of twenty-one days from the date of the service of the notice of rejection. 107. If the Liquidator thinks that a proof has been improperly admitted, the Court may, on the application of the Liquidator, after notice to the creditor who made the proof. expunge the proof or reduce its amount. 108. The Court may also expunge or reduce a proof upon the Expunging a) application of a creditor or contributory if the Liquidator declines to pin interfere in the matter 109 to 1.4 306 SECRETARIAL PRACTICE GENERAL MEETINGS OF CREDITORS AND CONTRIBUTORIES IN RELATION ro WINDING UP BY THE COURT AND OF CREDITORS IN RELATION TO A CREDITORS’ VOLUNTARY WINDING UP. [liquidator’s meetings of creditors and contributories. Application of rules as to meetings. Summoning of meetings. Form 75. 125.—(1) In addition to the first meetings of creditors and con tributories and in addition also to meetings of creditors and contributories directed to be held by the Court under section 288 of the Act (hereinafter referred to as Court meetings of creditors and contributories), the Liquidator in any winding-up by the Court may himself from time to time subject to the provisions of the Act and the control of the Court summon, hold and conduct meetings of the creditors or contributories (hereinafter referred to as Liquidator’s meetings of creditors and contributories) for the purpose of ascertain ing their wishes in all matters relating to the winding-up. (2) In any creditors’ voluntary winding up the Liquidator may himself from time to time summon hold and conduct meetings of creditors for the purpose of ascertaining their wishes in all matters relating to the winding-up (such meetings and all meetings of creditors which a Liquidator or a Company is by the Act required to convene in or immediately before such a voluntary winding-up and all meetings convened by a creditor in a voluntary windingup under these Rules are hereinafter called voluntary liquidation meetings). 126. Except where and so far as the nature of the subject-mattes or the context may otherwise require the Rules as to meetings here inafter set out shall apply to first meetings, Court meetings, Liquidator’s meetings of ecreditors and contributories, and voluntary liquidation meetings, but so nevertheless that the said Rules shal. take effect as to first meetings subject and without prejudice to any express provisions of the Act and as to Court meetings subject and without prejudice to anv express directions of the Court. 127.—(1) The Official Receiver or Liquidator shall summon all meetings of creditors and contributories by giving not less than seven days’ notice of the time and place thereof in the London Gazette and in a local paper; and shall not less than seven days before the day appointed for the meeting send by post to every person appearing by the Company’s books to be a creditor of the Company notice of the meeting of creditors, and to every person appearing by the Company’s books or otherwise to be a contributory of the Company notice of the meeting of contributories. (2) The notice to each creditor shall be sent to the address given in his proof, or if he has not proved to the address given in the Statement of Affairs of the Company, if any, or to such other address as may be known to the person summoning the meeting. The notice to each contributory shall be sent to the address mentioned in the Company's books as the address of such contributory, or to such other address as may be known to the person summoning the meeting. WINDING-UP RULES 80 (3) In the case of meetings under section 242 of the Act the continuing Liquidator or if there is no continuing Liquidator any creditor may summon the meeting. (4) This Rule shall not apply to meetings under section 238 or section 245 of the Act. 128. A certificate by the Official Receiver or other officer of the Court, or by the clerk of any such person, or an affidavit by the Liquidator, or creditor, or his solicitor, or the clerk of either of such persons, or as the case may be by some officer of the Company or its solicitor or the clerk of such Company or solicitor, that the notice of any meeting has been duly posted, shall be sufficient evidence of such notice having been duly sent to the person to whom the same was addressed 129. Every meeting shall be held at such place as is in the opinion of the person convening the same most convenient for the majority of the creditors or contributories or both. Different times or places or both may if thought expedient be named for the meetings o creditors and for the meetings of contributories 130. The costs of summoning a meeting of creditors or contributories at the instance of any person other than the Official Receiver or Liquidator shall be paid by the person at whose instance it is summoned who shall before the meeting is summoned deposit with the Official Receiver or Liquidator (as the case may be) such sum as may be required by the Official Receiver or Liquidator as security for the payment of such costs. The costs of summoning such meeting of creditors or contributories, including all disbursements, for printing, stationery, postage and the hire of room, shall be calculated at the following rate for each creditor or contributory to whom notice is required to be sent, namely, two shillings per creditor or contributory for the first 20 creditors or contributories, one shilling per creditor or contributory for the next 30 creditors or contributories, sixpence per creditor or contributory for any number of creditors or contributories after the first 50. The said costs shall be repaid out of the assets of the Company if the Court shall by order or if the creditors or contributories (as the case may be) shall by resolution so direct. This Rule shall not apply to meetings under sections 238 or 242 of the Act. 131. Where a meeting is summoned by the Official Receiver or the Liquidator, he or someone nominated by him shall be Chairman of the meeting. At every other meeting of creditors or contributories the Chairman shall be such person as the meeting by resolution shall appoint. This Rule shall not applv to meetings under section 238 of the Act. 132. At a meeting of creditors a resolution shall be deemed to be passed when a majority in number and value of the creditors present personally or by proxy and voting on the resolution have voted in favour ef the resolution. and at a meeting of the contributories a Proof of notice Forms 76 and aay Place of meetings Costs of calling meeting Chairman of meeting. Form 78. Ordinary resolution of creditors and crontrihiitoriec 808 SECRETARIAL PRACTICE resolution shall be deemed to be passed when a maj ority in number and value of the contributories present personally or by proxy, and voting on the resolution, have voted in favour of the resolution, the value of the contributories being determined according to the number of votes conferred on each contributory by the regulations of the Company. 133. The Official Receiver or as the case may be the Liquidator shall file with the Registrar a copy certified by him of every resolution of a meeting of creditors or contributories in a winding-up by the Court. Copy of resolution to be filed, Non-reception of notice by a reditor. 134. Where a meeting of creditors or contributories is summoned by notice the proceedings and resolutions at the meeting shall anless the Court otherwise orders be valid notwithstanding that some creditors or contributories may not have received the notice sent to them. 135. The Chairman may with the consent of the meeting adjourn it from time to time and from place to place, but the adjourned meeting shall be held at the same place as the original meeting unless ‘n the resolution for adjournment another place is specified or unless the Court otherwise orders. 136.—(1) A meeting may not act for any purpose except the election of a chairman, the proving of debts and the adjournment of the meeting unless there are present or represented thereat at least three creditors entitled to vote or three contributories or ali the creditors entitled to vote or all the contributories if the number of creditors entitled to vote or the contributories as the case may be shall not exceed three. (2) If within half an hour from the time appointed for the meeting a quorum of creditors or contributories is not present or represented the meeting shall be adjourned to the same day in the following week at the same time and place or to such other day or time or place as the chairman may appoint but so that the day appointed shall be not less than seven or more than twenty-one days from the day from which the meeting was adjourned. Creditors 137. In the case of a first meeting of creditors or of an adjournment entitled to vote. thereof a person shall not be entitled to vote as a creditor unless he has duly lodged with the Official Receiver not later than the time mentioned for that purpose in the notice convening the meeting or adjourned meeting a proof of the debt which he claims to be due tc him from the Company. In the case of a Court meeting or Liquidator’s meeting of creditors a person shall not be entitled to vote as a creditor unless he has lodged with the Official Receiver or Liquidator a proof of the debt which he claims to be due to him from the Company and such proof has been admitted wholly or in part before the date on which the meeting is held. Provided that this and the next four following rules shall not apply to a Court meeting of creditors held prior to the first meeting of creditors. This Rule shall not apply to any creditors or class of creditors who bv virtue of the Juorum. WINDING-UP RULES Roc Rules or any directions given thereunder are not required to prove their debts or to any voluntary liquidation meeting. 138. A creditor shall not vote in respect of any unliquidated or Cases in contingent debt, or any debt the value of which is not ascertained, Which creditor: nor shall a creditor vote in respect of any debt on or secured by a current bill of exchange or promissory note held by him unless he is willing to treat the liability to him thereon of every person who is liable thereon antecedently to the Company, and against whom a Receiving Order in Bankruptcy has not been made, as a security in his hands, and to estimate the value thereof, and for the purposes of voting, but not for the purposes of dividend. to deduct it from his proof. 139. For the purpose of voting, a secured creditor shall, unless Votes of secured he surrenders his security, state in his proof or in a voluntary creditors liquidation in such a statement as is hereinafter mentioned the particulars of his security, the date when it was given, and the value at which he assesses it, and shall be entitled to vote only in respect of the balance (if any) due to him after deducting the value of his security. If he votes in respect of his whole debt he shall be deemed to have surrendered his security, unless the Court on application is satisfied that the omission to value the securitv has arisen from inadvertence 140. The Official Receiver or Liquidator may within twentyeight days after a proof or in a voluntary liquidation a statement estimating the value of a security as aforesaid has been used in voting at a meeting require the creditor to give up the security for the benefit of the creditors generally on payment of the value so estimated with an addition thereto of twenty per cent. Provided that where a creditor has valued his security he may at any time before being required to give it up correct the valuation by a new proof and deduct the new value from his debt, but in that case the said addition of twenty per cent. shall not be made if the security is required to be given up. 141. The Chairman shall have power to admit or reject a proof for the purpose of voting, but his decision shall be subject to appeal to the Court. If he is in doubt whether a proof shall be admitted or rejected he shall mark it as objected to and allow the creditor to vote subject to the vote being declared invalid in the event of the obiection being sustained. 142. For the purpose of voting at any voluntary liquidation meetings a secured creditor shall unless he surrender his security lodge with the Liquidator or where there is no Liquidator at the Registered Office of the Company before the meeting a statement giving the particulars of his security, the date when it was given and the value at which he assesses 1+ Creditor required to give up Security Admission and rejection of proofs for purpose of voting. Statement of Security 143.—(1) The Chairman shall cause minutes of the proceedings at Minutes of the meeting to be drawn up and fairlv entered in a book kent for meeting 810 SECRETARIAL PRACTICE that purpose and the minutes shall be signed by him or by the Chairman of the next ensuing meeting. (2) A list of creditors and contributories present at every meeting shall be made and kept as in Form 74. Form 74 Proxies. Form of proxies. Forms 80 and 81. PrOXI1ES IN RELATION TO A WINDING-UP BY THE COURT AND TC MEETINGS OF CREDITORS IN A CREDITORS’ VOLUNTARY WINDING-UP 144. A creditor or a contributory may vote either in person or by proxy. Where a person is authorised in manner provided by section 116 of the Act to represent a corporation at any meeting of creditors or contributories such person shall produce to the Official Receiver or Liquidator or other the Chairman of the meeting a copy of the resolution so authorising him. Such copy must either be under the seal of the corporation or must be certified to be a true copy by the secretary or a director of the corporation. The succeeding Rules as to proxies shall not (unless otherwise directed by the Court) apply to a Court meeting of creditors or contributories prior to the first meeting. 145. Every instrument of proxy shall be in accordance with the form in the Appendix and every written part thereof shall be in the handwriting of the person giving the proxy or of any manager or clerk or other person in his regular employment or of a Commissioner to administer oaths in the Supreme Court. 146. General and special forms of proxy shall be sent to the creditors and contributories with the notice summoning the meeting, and neither the name nor description of the Official Receiver or Liquidator or any other person shall be printed or inserted in the body of any instrument of proxy before it is so sent. General proxies. 147. A creditor or a contributory may give a general proxy to any person. Special proxies. ~~ 148. A creditor or a contributory may give a special proxy to any person to vote at any specified meeting or adjournment thereof :— (a) for or against the appointment or continuance in office. of any specified person as Liquidator or Member of the Committee of Inspection, and; on all questions relating to any matter other than thoseabove referred to and arising at the meeting or an adjournment thereof. Solicitation by Liquidator to obtain proxies. 149. Where it appears to the satisfaction of the Court that any solicitation has been used by or on behalf of a Liquidator in obtaining proxies or in procuring his appointment as Liquidator except by the direction of a meeting of creditors or contributories the Court if it WINDING-UP RULES 817 thinks fit may order that no remuneration be allowed to the person by whom or on whose behalf the solicitation was exercised notwithstanding any resolution of the Committee of Inspection or of the creditors or contributories to the contrary. 150. A creditor or a contributory in a winding-up by the Court may appoint the Official Receiver or Liquidator and in a voluntary winding-up the Liquidator or if there is no Liquidator the Chairman of a meeting to act as his general or special proxy. Proxies to Official Receiver or Liquidator 151. No person acting either under a general or a special proxy Holder of proxy shall vote in favour of any resolution which would directly or hoyio ote on indirectly place himself, his partner or employer in a position to be is financially receive any remuneration out of the estate of the Company other. rested wise than as a creditor rateably with the other creditors of the Company: Provided that where any person holds special proxies to vote for an application to the Court in favour of the appointment of himself as Liquidator he mav use the said proxies and vote accord: inglv. 152. —(1) A proxy intended to be used at the first meeting of creditors or contributories, or an adjournment thereof, shall be lodged with the Official Receiver not later than the time mentioned for that purpose in the notice convening the meeting or the adjourned meeting, which time shall be not earlier than twelve o’clock at noon of the day but one before, nor later than twelve o’clock at noon of the day before the day appointed for such meeting, unless the Court otherwise directs. Proxies. Forms 80 and 81. (2) In every other case a proxy shall be lodged with the Official Receiver or Liquidator in a winding-up by the Court; with the Company at its Registered Office for a meeting under section 238 of the Act, and with the Liquidator or if there is no Liquidator with the person named in the notice convening the meeting to receive the same in a voluntary winding-up not later than four o’clock in the afternoon of the day before the meeting or adjourned meeting at which it is to be used. (3) No person shall be appointed a general or special nrc who is a minor. 153. Where an Official Receiver who holds any proxies cannot attend the meeting for which they are given, he may, in writing, depute some person under his official control to use the proxies on his behalf and in such marner as he mav direct. 154. The proxy of a creditor blind or incapable of writing may be accepted, if such creditor has attached his signature or mark thereto in the presence of a witness, who shall add to his signature his description and residence; provided that all insertions in the proxy are in the handwriting of the witness, and such witness shall have certified at the foot of the proxy that all such insertions have been made by him at the request and in the presence of the creditor before he attached his signature or mark Use of proxies bv deputy Filling in where creditor blind or incapable. R12 SECRETARIAL PRACTICE 155 to 157 L1QUIDATOR AND COMMITTEE OF INSPECTION. Limit of remuneration. 158. Except as provided by the Act or the Rules, a Liquidator shall not under any circumstances whatever, make any arrangement for, or accept from any solicitor, auctioneer, or any other person connected with the Company of which he is Liquidator, or who is employed in or in connection with the winding-up of the Company, any gift, remuneration, or pecuniary or other consideration or benefit whatever beyond the remuneration to which under the Act and the Rules he is entitled as Liquidator, nor shall he make any arrangement for giving up, or give up any part of such remuneration to any such solicitor, auctioneer, or other person. 159 et sq. APPENDIX . Finance Act, 192° ‘Section 55, as amended by Finance Act, 1928, Section : (The revision of the 1927 Act made by the 1028 Act ts shoum in italic. (1) If in connection with a scheme for the reconstruction of any company or companies or the amalgamation of any companies it is shown to the satisfaction of the Commissioners of Inland Revenue that there exist the following conditions, that is to say— fa) that a company with limited liability is to be registered, or that since the commencement of this Act a company has been incorporated by letters patent or Act of Parliament, or the nominal share capital of a company has been increased ; that the company (in this section referred to as ‘the transferee company’) is to be registered or has been incorporated or has increased its capital with a view to the acquisition either of the undertaking of, or of not less than ninety per cent. of the issued share capital of. any particular existing company: that the consideration for the acquisition (except such part thereof as consists in the transfer to or discharge by the transferee company of liabilities of the existing company) consists as to not less than ninety per cent. thereof— (i) where an undertaking is to be acquired, in the issue of shares in the transferee company to the existing company or to holders of shares in the existing comcompany; or 'i1) where shares are to be acquired, in the issue of shares in the transferee company to the holders of shares in the existing company in exchange for the shares held by them in the existing company; then. subject to the provisions of this sectiu. (A) The nominal share capital of the transferee company, or the amount by which the capital of the transferee company has been increased, as the case mav be. shall. for the purpose of computing C Relief from capital and transfer stamp duty in case of reconstructions or amalgamations nf companies. F.A. 1928, s. 31. 58 & 59 Vict. >. 16. dw. 5 ry 814 SECRETARIAL PRACTICE the stamp duty chargeable in respect of that capital, be treated as being reduced by either— (i) an amount equal to the amount of the share capital of the existing company in respect of which stamp duty has been paid, or, in the case of the acquisition of a part of an undertaking, equal to such proportion of the said share capital as the value of that part of the undertaking bears to the whole value of the undertaking; or the amount to be credited as paid up on the shares to be issued as such consideration as aforesaid, gud on the shaves, if any, to be issued to creditors of the existing company in consideration of the velease of debts (whether secured ov unsecured) due ov accruing due to them from the existing company or of the assignment of such debts to the transferee company, whichever amount is the less; and (B) Stamp duty under the heading ‘ Conveyance or Transfer on Sale’ in the First Schedule to the Stamp Act, 1891, shall not be chargeable on any instrument made for the purposes of or in connection with the transfer of the undertaking or shares, or on any instrument made, for the purposes of ov in connection with the assignment to the tramsfevee company of any debts, secuved ov unsecured of the existing company, nor shall any such duty be chargeable under section twelve of the Finance Act, 1895, on a copy of any Act of Parliament, or on any instrument vesting, or relating to the vesting of, the undertaking or shares in the transferee company: Provided that— (@) mo such instrument shall be deemed to be duly stamped unless either it is stamped with the duty to which it would but for this section be liable or it has in accordance with the provisions of section twelve of the Stamp Act, 1891, been stamped with a particular stamp denoting either that it is not chargeable with any duty or that it is dulv stamped and in the case of an instrument made for the purposes of or in connection with a transfer to a company within the meaning of the Companies (Consolidation) Act, 1908, the provisions of paragraph (B) of this subsection shall not apply unless the instrument is either— (i) executed within a period of twelve months from the date of the registration of the transferee company or the date of the resolution for the increase of the nominal share capital of the transferee company, as the case may be; or made for the purpose of effecting a conveyance or transfer in pursuance of an agreement which has been filed, or particulars of which have been filed, with the registrar of companies within the said period of twelve months; and (c) the foregoing provision with respect to FINANCE ACT, 1027 815 the release and assignment of debts of the existing company shall not, except in the case of debts due to banks or to trade creditors apply to debts which were incurred less than two years befove the proper time for making a claim for exemption under this section. (2) For the purposes of a claim for exemption under paragraph (B) of subsection (1) of this section, a company which has, in connection with a scheme of reconstruction or amalgamation, issued any unissued share capital shall be treated as if it had increased its nominal share capital. (3) A company shall not be deemed to be a particular existing company within the meaning of this section unless it is provided by the memorandum of association of, or the letters patent or Act incorporating, the transferee company that one of the bbjects for which the company is established is the acquisition of the undertaking of, or shares in, the existing company, or unless it appears from the resolution, Act or other authority for the increase of the capital of the transferee company that the increase 1s authorised for the purpose of acquiring the undertaking of. or shares in, the existing company. (4) In a case where the undertakings of or shares in two or more companies are to be acquired, the amount of the reduction to be allowed under this section in respect of the stamp duty chargeable in respect of the nominal share capital or the increase of the capital of a company shall be computed separately in relation to each of those companies. (5) Where a claim is made for exemption under this section, the Commissioners of Inland Revenue may require the delivery to them of a statutory declaration in such form as they may direct, made in England by a solicitor of the Supreme Court or in Scotland by an enrolled law agent, and of such further evidence, if any. as the Commissioners may reasonably require. (6) If— (a) where any claim for exemption from duty under this section has been allowed, it is subsequently found that any declaration or other evidence furnished in support of the claim was untrue in any material particular, or that the conditions specified in subsection (1) of this section are not fulfilled in the reconstruction or amalgamation as actuallv carried out; or where shares in the transferee company have been issued to the existing company in consideration of the acquisition, the existing company within a period of two years from the date, as the case may be, of the registration or incorporation or of the authority for the increase of the capital, of the transferee company ceases, otherwise than in consequence of reconstruction, amalgamation or liquidation, to be the beneficial owner of the shares so issued to it: or (b) 316 SECRETARIAL PRACTICE where any such exemption has been allowed in connection with the acquisition by the transferee company of shares in another company, the transferee company within a period of two years from the date of its registration or incorporation or of the authority for the increase of its capital, as the case may be, ceases, otherwise than in consequence of reconstruction, amalgamation or liquidation, to be the beneficial owner of the shares so acquired; the exemption shall be deemed not to have been allowed, and an amount equal to the duty remitted shall become payable forthwith, and shall be recoverable from the transferee company as a, debt due to His Majesty, together with interest thereon at the rate of five per cent. per annum in the case of duty remitted under paragraph (A) of subsection (1) of this section from the date of the registration or incorporation of the transferee company or the increase of its capital, as the case. may be, and in the case of duty remitted under paragraph (B) of the said subsection from the date on which it would have become chargeable if this Act had not passed. (c) (7) If in the case of any scheme of reconstruction or amalgamation the Commissioners of Inland Revenue are satisfied that at the proper time for making a claim for exemption from duty under subsection (1) of this section there were in existence all the necessary conditions for such exemption other than the condition that not less than ninety per cent. of the issued share capital of the existing company would be acquired by the transferee company, the Commissioners may, if it is proved to their satisfaction that not less than ninety per cent. of the issued capital of the existing company has under the scheme been acquired within a period of six months from the earlier of the two following dates, that is to say— (2) the last day of the period of one month after the first allotment of shares made for the purposes of the acquisition; or the date on which an invitation was issued to the shareholders of the existing company to accept shares in the transferee company; and on production of the instruments on which the duty paid has been impressed, direct repayment to be made of such an amount of duty as would have been remitted if the said condition had been originally fulfilled. (8) In this section, unless the context otherwise requires— References to the undertaking of an existing company include references to a part of the undertaking of an existing company: The expression ‘shares’ includes stoc. APPENDIX © Extract from Law of Property Act, 1Q2¢ "SECTION 74 (1) In favour of a purchaser a deed shall be deemed to have been duly executed by a corporation aggregate if its seal be affixed thereto in the presence of and attested by its clerk, secretary or other permanent officer or his deputy, and a member of the board of directors, council or other governing body of the corporation, and where a seal purporting to be the seal of a corporation has been affixed to a deed, attested by persons purporting to be persons holding such offices as aforesaid, the deed shall be deemed to have been executed in accordance with the requirements of this section, and to have taken effect accordingly. (2) The board of directors, council or other governing body of a corporation aggregate may, by resolution or otherwise, appoint an agent either generally or in any particular case, to execute on behalf of the corporation any agreement or other instrument not under seal in relation to anv matter within the powers of the corporation. (3) Where a person is authorised under a power of attorney or under any statutory or other power to convey any interest in property in the name or on behalf of a corporation sole or aggregate, he may as attorney execute the conveyance by signing the name of the corporation in the presence of at least one witness, and in the case of a deed by affixing his own seal, and such execution shall take effect and be valid in like manner as if the corporation had executed the conveyance. (4) Where a corporation aggregate is authorised under a power of attorney or under any statutory or other power to convey any interest in property in the name or on behalf of any other person (including another corporation), an officer appointed for that purpose by the board of directors, council or other governing body of the corporation by resolution or otherwise, may execute the deed or other instrument in the name of such other person; and where an instrument appears to be executed by an officer so appointed, then in favour of a purchaser the instrument shall be deemed to have been executed bv an officer dulv authorised Execution of instruments by or on behalf of rOrDOrations 318 SECRETARIAL PRACTICE (5) The foregoing provisions of this section apply to transactions wherever effected, but only to deeds and instruments executed after the commencement of this Act, except that, in the case of powers or appointments of an agent or officer, they apply whether the power was conferred or the appointment was made before or after the commencement of this Act or by this Act. (6) Notwithstanding anything contained in this section, any mode of execution or attestation authorised by law or by practice or by the statute, charter, memorandum or articles, deed of settlement or other instrument constituting the corporation or regulating the affairs thereof, shall (in additien to the modes authorised by this section) be as effectual as if this section had not been passed. NOTE :(— ‘corporation aggregate’ is composed of many persons acting on all solemn occasions by the medium of their common seal, including joint-stock companies; in contradistinction to a ‘corporation sole’ which is composed only of one person, such as a bishop or a beneficed clergyman, the Treasury Solicitor, or the Public Trustee. APPENDIX N Company Legislation in the British Dominions Overseas AUSTRALIA - The Commonwealth—as a federal unit—has no power to create corporations or to enact a general code of company law; there are. therefore, no Commonwealth companies acts. NEw Soutn WALES. The principal Act is the Companies Act, No. 40 of 1899 (a consolidating Act); and the Amending Acts are Nos. 47 of 1900, 22 of 1906, 9 of 1907, and the Companies (Registration of Securities) Act, No. 37 of 1918. A special Act is the Companies (Death Duties) Act, No. 30 of 1901. The Companies Acts comprise, with small exceptions and subject to what is stated below, the provisions of the English Companies Act, 1929. Companies Act, No. 40 of 1899. The following provisions are noteworthy :— ss. 186-203. No-liability companies. Among the special features of the company law of New South Wales is the system of ‘no-liability’ companies, which has been found useful for mining companies in Australia as in Canada. A no-liability company is a company of which the members are not liable for any calls or contributions, but are not entitled to a dividend on any share upon which a call is due and unpaid. For the protection of creditors a no-liability company is bound to use the words ‘no liability’ as the last two words of its name, and no goods may be ordered on behalf of a company of this class except on paper bearing the companv’s name. including the words ‘no liability.’ Before registration can be obtained, 10 per cent. of the ‘contributing capital’ must have been paid up in cash; (‘contributing capital’ is the total nominal capital exclusive of fully or partlypaid shares issuable for a consideration other than cash). A call on shares must be made so as to fall due only on the second Wednesday in any month, and no subsequent call may be made until 14 days after the previous call became due 820 SECRETARIAL PRACTICE . Shares on which calls remain unpaid 14 days after the due date are absolutely forfeited without any further formality, and must be sold by public auction: but if the sum bid is insufficient to cover the sum due from the shareholder and expenses, the directors may dispose of the shares in any way they think fit. They may also at any time before the auction annul the forfeiture by paying the amount due with expenses. A no-liability company must at least once a year present to the members in general meeting a balance sheet in a prescribed form. S. 274. Reconstructed Companies. On the recénstruction of an old company, the assets can be vested in the new company by the Governor's proclamation, made on the recommendation of the Chief Judge, or Judge in Equity. Notable omissions from the principal Act as compared with the English Companies Act, 1929, are the distinction between a public and a private company, and the filing of an annual statement in the form of a balance sheet. Companies Acts Amendment Act, No. 47 of 1900. This short Act merely empowers the court to permit the filing of a contract in regard to shares issued for consideration other than cash where ‘he omission to file the contract was accidental or reasonable. Companies Acts Amendment Act, No. 22 of 1906. Ss. 3-6 adopt the provisions of the English law as to alteration of the objects of a company. Ss. 7-14. Foreign Companies. A foreign company is one formed or incorporated outside New South Wales and carrying on business in New South Wales. Such a company must register its name, a copy of its memorandum and articles, a balance sheet shewing its assets and liabilities at a date not more than twelve months before registration, the name and address of its agent, and the situation of its principal office in New South Wales. It must also, before commencing business. obtain a certificate from the local Registrar. Companies Acts Amendment Act, No. 9 of 1907. This Act amends the provisions of the previous Act so as to make it obligatory for foreign companies to file an annual list of members and a list of debentures, stock or other charges on the property of the company. Companies (Death Duties) Act, No. 30 of 1907. By this Act every company incorporated outside New South Wales for the purpose of mining or of carrying on an agricultural industry in New South Wales is bound to have a registered office in the State, and every such company is to be liable to the Government of New South Wales for the payment of death duties on the death of a member of the company wherever such member may be domiciled. But no duty is payable where the value of the shares held by the member at the time of his death does not exceed £1000. DOMINION LEGISLATION—AUSTRALIA 821 QUEENSLAND. The principal Act is the Companies Act, No. 4 of 1863, and the Amending Acts are the Companies Act Amendment Acts, Nos. 18 of 1889, 10 of 1891, 3 of 1893, 21 of 1896, 13 of 1909, and 10 of 1913. There are also the following Acts: — The British Companies Act, No. 31 of 1886. The Mining Companies Act, No. 19 of 1886. The Dividend Duty Act, No. 10 of 1890. The Companies (Winding-up) Act, No. 24 of 1892. The Reconstructed Companies Act, No. 19 of 1894 The Foreign Companies Act, No. 2 of 1895. Life Assurance Companies Act, No. 20 of 1901. Life Assurance Companies (Amendment) Act, No. 29 of 1923. The principal Act follows the English Act of 1862 almost verbatim. No. 18 of 1889 reproduces the provisions of the English Act regarding reduction of capital, subdivision of shares, associations not for profit, calls on shares, transfer of shares, branch registers, compromise and duplicate seals. No. 10 of 1891 reproduces the English provisions as to power to alter a company’s objects, and as to liability of directors and others for statements in a prospectus. The Companies (Winding-up) Act, No. 24 of 1892, and Amendments Acts, Nos. 3 of 1893, and 21 of 1896 bring the provisions for winding-up in the principal Act into conformity with the English Act. No. 13 of 1909 reproduces the provisions of the English Act as to registration of mortgages and debentures and striking defunct companies off the register, while No. 10 of 1913 provides for share warrants to bearer and issue of share certificates within two months of allotment. The Companies Acts, therefore, embody the majority of the provisions of the English Act of 1929. By the Mining Companies Act, 1886, the same system of no-liability companies is created for mining companies as in New South Wales (q.v.) and South Australia. The only distinctive provisions in Queensland are that 5 per cent. of the capital must be paid up in cash before registration, and the period for forfeiture of shares on which calls are due is 26 days after the due date. The British Companies Act, 1886, provides for the registration in Queensland of companies formed in other parts of the British Empire. Such companies desiring to be registered must forward a certificate of incorporation, together with a certified copy of the memorandum and articles of association, to the Registrar and pay the prescribed fees, which the Act provides shall not exceed the fees payable upon the registration of a joint stock company under the laws of Queensland. British companies, when registered, have the same rights and privileges, including the right to hold land. as Oueensland companies. In the event 322 SECRETARIAL PRACTICE of the winding up of a registered British company, any land in Queensland shall, subject to any valid mortgages subsisting thereon, be applicable in the first instance in payment and discharge of the debts of the company contracted within Queensland in priority to all other debts. The Foreign Companies Act, 1895, makes provision for registration in Queensland of foreign companies, that is to say, companies incorporated according to the laws of a country other than a part of His Majesty's Dominions: Such companies desiring to be registered must forward a certificate of incorporation and documents showing constitution,” in the same way as British companies, to the Registrar, and pay the preseribed fees, which are not to exceed the fees payable upon the registration of a Queensland company. Foreign companies, when registered. have the right to sue and be sued in the Queensland Courts. SoUTH AUSTRALIA. The Acts relating to companies are the Companies (Consolidation) Act, No. 557 of 1892, and six Amending Acts, Nos. 576 of 1893, 914 of 1906, 1619 of 1924 (Companies Mortgages, Charges and Debentures) Act, 1738 of 1926, 1754 of 1926 and 1853 of 1928. There is also the Life Assurance Companies Act, 1882 (No. 277). The principal Act follows very closely the English act of 1862, the following differences being noteworthy: — S. 9. Any five or more persons may form a company with or without limited liability, or, if a mining company, with no liability. S. 39. The registered office is to be accessible to the public for not less than four hours on at least two days in each week. Secretary to be appointed and to attend at the registered office at the times when it is accessible to the public. ning authorised by the Act to be done by ‘pecial resolution may be done notwithstanding wnything to the contrary contained in the nemorandum or articles. Winding-up. These provisions do not apply to a no-liability company. By s. 155, no call can be made in a winding-up for the benefit of vendors’ shares in order to place vendors’ shares on an equality with shares which have been paid for in cash. 3s. 196-210. Foreign Companies. A foreign company means any joint stock company or corporation duly incorporated for business purposes other than a company incorporated in South Australia, and includes any unincorporated joint stock company which may sue or be sued or hold property in a common name, and which does not maintain its head office or principal place of Ss. 99-188. DOMINION LEGISLATION—AUSTRALIA 823 business in South Australia (s. 3 of No. 576 of 1893). A foreign company incorporated in Great Britain or Ireland need not comply with the regulations for these companies until after one year. These regulations provide that a foreign company must appoint an attorney resident in the State empowered to sue and be sued in any civil or criminal proceedings, and must file together with the power of attorney a declaration giving details as to the incorporation of the company, and the execution of the power of attorney; further, that a foreign company must have an office in the State where documents can be served, and that three months’ notice of intention on the part of a foreign company to cease business shall be given .in the Government Gazette, and that for three months after such publication legal and other documents may be served on the attorney or at the company’s office. The attorney of a foreign company may delegate his powers (s. 9 of No. 576 of 1893). Ss. 211-220. No-liability companies. The system of noliability companies is generally the same as in New South Wales (q.v.). An additional requirement is that directors shall be personally liable for payment of wages not exceeding four weeks owing by such companies. It is not possible to form a guarantee company, nor are there any provisions relating to share warrants to bearer. Under the Companies (Mortgages, Charges and Debentures) Act, No. 1619 of 1924, provision is made for the registration of all mortgages and charges created by companies before the commencement of the Act, which have not been wholly satisfied. In regard to subsequent mortgages and charges, and to debentures, the provisions of the English Act of 1929 are adopted with only the following variations: (1) mortgages on land are not included among those required to be registered; (2) mortgages registered within or on the expiration of 30 days from the creation of unregistered mortgages over the same assets are invalid unless made in good faith to correct a material error in the prior mortgage; (3) debentures issued within six months of a company’s going into liquidation are void as security on the company’s property except as security for a loan made or agreed to be made at the time of the issue of the debentures. Amending Act No. 1738 of 1926 is a short Act to prevent companies registering with a name which includes the words Friendly Society.” No. 1754 of 1926 amends those sections of the principal Act which relate to reduction of capital, while No. i853 of 1928 prevents the registration of companies which carry on business outside Australia, whose obiects. if carried on in Australia would be illecal 324 SECRETARIAL PRACTICE Tasmania. The principal Act is No. 66 of 1920 (a Consolidating Act), to which there have been four amendments; the Companies Amendment Act, No. 77 of 1922 and No. 23 of 1923, which introduce slight amendments in the law relating to foreign companies, and No. 69 of 1924 and No. 89 of 1928. No. 69 of 1924 is really the criminal code and merely amends certain sections of the principal Act which deal with the criminal offences of fraud and forgery. No. 89g of 1928 is a short amending Act following the latest English. legislation. It prohibits sharehawking (s. 3) and imposes restrictions on making offers of shares in writing (s. 4). There are also the Mining Companies (Foreign) Act, No. 16 of 1884, which has been amended by the following subsequent Acts: —No. 34 of 1905, No. 35 of 1916, No. 40 of 1921 and No. 69 of 1924, and the Life Assurance Companies Act, No. 6 of 1874 amended by the following Life Assurance Companies Acts: —No. 16 of 1906, No. 60 of 1916 and No. 69 of 1924. No. 66 of 1920 follows in the main the English Companies Act of £929. The following provisions are noteworthy: — S. 36 (2). On request of the transferor in writing a company must require the holder of a share certificate to produce it at the office of the company to be dealt with as the transfer proceedings may require. Unless otherwise provided in the articles, the Jualification of a director must be held by him solely and not as one of several joint holders. 89. Permits issue of an abridged prospectus in a newspaper advertisement provided that the fact is stated and reference to the full prospectus is made. Requires particulars of a mortgage on land by a company to be registered, whether created within or without the State. 5. 116. Balance Sheets. The annual balance sheet must be in a form prescribed by the Act and must include a statement of profit and loss. No balance sheet or other document issued on behalf of the company may contain any direct or indirect representation that the company has a reserve fund unless such reserve fund exists, and unless accompanied by a statement shewing whether it is used in the business or aot, and giving details of the investments, if it is invested. o>. 121 (3) and (4). Audit. A partner of a director may not be an auditor, and if an auditor becomes indebted to the companv. his office becomes vacant. DOMINION LEGISLATION—AUSTRALIA 825 222 (2) and (7). Auditors must use reasonable diligence with the view of ascertaining that the books of the company have been properly kept, and must obtain from the directors before reporting, a private balance sheet giving the details on which the shareholders’ balance sheet is founded, and shewing amongst other things, the amount of deduction (if any) for bad or doubtful debts. 0 person may act as auditor for a company unless he is licensed by the Companies’ Auditors’ Board, which is a Board of three persons appointed by the governor. Proprietary Company’ is a company which by its memorandum imposes on itself the same limitations as are imposed on a private company by s. 26 of the English Act of 1929, and, in addition, prohibits the receipt, except from its members, of deposits whether bearing interest or not. Its certificate of incorporation must certify that it is a proprietary company, and the word ‘proprietary’ must be inserted in its name immediately before ‘limited.’ No director, manager or promoter may be appointed voluntary liquidator except by a resolution of creditors at a meeting called for that purpose. Foreign Companies. A foreign company ‘which includes any unincorporated body or association which may sue or hold property in the name of its secretary or other authorised officer) is one incorporated outside Tasmania which fcarries on business in Tasmania, but a company is not deemed to be ‘carrying on business,’ if it only sells goods by an agent, or nas only invested its funds or other property in the State. It must, within one month of commencing business, file with the registrar a certified copy of its constitution, a list of the directors in the country where it is incorporated and in Tasmania (if any), and the name and address of its agent. A foreign limited company must in every prospectus issued in Tasmania state the country in which it is incorporated. Foreign companies carrying on the business of trustees and executors must deposit a security of £5000. 5. 269. No company may purchase or own shares or debentures J For the distinction between * carrying on business’ and ‘establishing a place ~f Lord Advocate v. Huron & Erie Loan Co. 1011. Scottish Cases. 61° business 326 SECRETARIAL PRACTICE S. 270. Forbids any advertisement of capital in which the amount of nominal or authorised capital is stated without the words ‘nominal’ or ‘authorised,’ or in which the amount of paid-up capital or of any charge on the uncalled capital is not stated. 5. 271. No dividend shall be payable except out of profits. 5. 272. Shares may not be issued at a premium until a company has been established twelve months, and any premiuin received must be credited to reserve. Victoria. The company law in Victoria has recently been consolidated in the Companies Act, 1928 (No. 3659) operating on 12th February, 1929. It is based mainly on the Act of 1913, No. 2631, which, in turn, was based on the English Companies (Consolidation) Act, 1908, and many sections are taken verbatim from: the English Act. The Act is divided into five parts: — Part 1 (ss. 3-294) dealing with Trading companies. Part II (ss. 205-438) with Mining companies. Part III (ss. 439—489) with Life Assurance companies. Part IV (ss. 490-494) with Dairying companies and Part V (ss. 495-505) with unclaimed moneys. There are few sections differing materially from the English Act which are worthy of comment :— S. 10. Any five or more persons may form a public company and any two or more, a proprietary company. 50. Every company must have a registered office in Victoria, notice of which, and of any change thereof must be given to the Registrar-General. 5. 310. Deals exclusively with mining companies and enacts that notice of the name of the manager and of any change in the manager must be filed with the Registrar-General. mining company may not borrow money or mortgage any of its property without the sanction of an extraordinary meeting and a majority of two-thirds in number and value of the shareholders. WEsT AUSTRALIA. The company law of West Australia is almost identical with that of South Australia. The principal Act is the Companies Act, No. 8 of 1893 (a Consolidating Act), to which there have been the following amendments: The Companies Act Amendment Acts, Nos. 2 of 1896, 35 of 1897, 28 of 1898, 54 of 1899, 19 of 1902, and 31 of 1022 and No. 28 of 1929 (Co-operative Companies). : There are also the following special Acts: — The Dividend Duties Act, No. 32 of 1902 as amended by the Dividend Duties Amendment Acts Nos. 30 of 1906. 24 of 1015. 22 of 1918, 40 of 1918, 32 of 1920 and 25 of 1624. DOMINION LEGISLATION—AUSTRALIA 827 The Banking Companies Act, No. 1 of 1837. The Banking Companies Amendment Act, No. 24 of 1905 The Life Assurance Companies Act, No. 12 of 1889. The Life Assurance Companies Amendment Act, No. 12 of 1905. The Insurance Companies Acts, Nos. 19 of 1918 and 34 of 1923. The following provisions of the Companies Acts are noteworthy :— "© Any five or more persons may form a limited or unlimited company or, if formed for mining purposes, a mno-liability company. Before registration can be obtained by a no-liability company, 5 per cent. of the nominal capital must have been paid up in cash. The directors of every company must appoint a secretary who must be present in person, or by agent or clerk, at the office while it is open to the public. S. 158. Unless otherwise provided by the memorandum or articles, no call may be made in a winding-up merely for the benefit of vendors’ shares in order to place them on an equality with shares said for in cash. Foreign Companies. By these sections as amended by the Companies Act Amendment Acts noted above (which refer exclusively to foreign companies), it is provided that a foreign company must appoint an attorney resident in the Colony empowered to sue and be sued in any civil or criminal proceedings, and must file, together with the power of attorney, a declaration giving details as to the incorporation of the company. A foreign company must have an office in the State where documents can be served. Three months’ notice of tention on the part of a foreign company to cease business must be given in the Government Gazette, and for three months after such publicationlegal and other documents may be served on the attorney or at the company’s office. It is further provided that every foreign company carrying on business within the State must zeep a Colonial register. There are no provisions relating to share warrants to bearer. ‘No-liability’ Companies. The provisions relating to ‘no-liability’ companies are substantially the same as in New South Wales (q.v.). The Dividend Duties Acts apply to every incorporated company carrying on business in Western Australia (excepting Friendly Societies and [.ife Assurance companies) Thev provide for the - - 328 SECRETARIAL PRACTICE payment of a duty of one shilling in the £ on dividends in the case of companies carrying. on business in Western Australia only, and on profits made in Western Australia in the case of companies carrying on business in Western Australia and elsewhere. Insurance companies pay a duty of £1 per £100 of premiums. CANADA. I. THE DoMiINION COMPANIES ACTS. In Canada companies may be incorporated either under the Dominion law or under the law of the Prouince in which the company carries on its business. In some Provinces the law relating to companies is founded on the Dominion law; in others, on the law of England, and there are many laws founded partly on ‘he one system and partly on the other. The insolvency of companies, however, is a matter exclusively within the jurisdiction of the Dominion Parliament. It is only ander the Dominion Winding-up Act, 1927, that a creditor can obtain a winding-up order on the ground of insolvency. Each of the Provinces has its own provisions for winding-up, but these relate only to winding-up on grounds other than insolvency. The principal Companies Act is No. 27 of 1927, and there is one amending Act of 1930. There are also separate Acts dealing with special classes of companies, such as Loan Companies and Trust Companies. The main features of the principal Act, No. 27 of 1927 as amended by the Act, 1930, resemble closely the provisions of the English Act of 1929. There are, however, several points peculiar to Canada. They are: 5. 5. Incorporation is obtained by application for Letters Patent to the Secretary of State by not less than three persons. Provides for the issue of any or all of the shares of the capital stock of a company without any nominal or par value and enacts that every such share shall be equal to every other such share subject to the preferences, restrictions or other conditions attached to any class of shares. company may, subject to confirmation by supplementary letters patent, change its name by a resolution passed by a majority of at least two-thirds at a special general meeting called for the purpose. Provides that a company shall possess as incidental and ancillary to the powers set out in the letters patent or supplementary letters patent, a large number of ‘general powers.” There is, however, at the end of the section, authority to withold anv or all if the powers of so desired. DOMINION LEGISLATION—CANADA 829 S. 3 Fr aU Every company must at all times have an office in the city or town in which its chief place of business in Canada is situate which place shall oe the legal domicile of the company in Canada. n extension or reduction of powers contained in the company’s letters patent or supplementary letters patent may be sought by the directors provided a resolution for such variation has been passed by a two-thirds majority of shareholders. Authorises the directors of any company to make by-laws consolidating any shares of less par value than one hundred dollars, into shares of a larger par value; but no such consolidated share shall exceed the par value of one hundred dollars. The section also contains powers to subdivide existing shares. Empowers the directors of any company to make a by-law to increase the capital stock of the company to any amount which they consider requisite. No such by-law as mentioned in the last two sections shall have any effect unless sanctioned by a two-thirds majority of shareholders at a special general meeting called for considering that particular matter. Confers similar rights on the directors to reduce the capital of a company with the reservation that any by-law for such a purpose must be confirmed by supplementary letters patent. Not less than ten per cent. of the allotted shares of a company shall be called up and made payable within one year from the incorporation of the company. Renders shareholders liable to pay interest at the rate of six per cent. on overdue calls. The company, on the other hand, are empowered to allow interest not exceeding eight per cent. on calls paid in advance. Transfers of shares not fully-paid can only be made subject to the consent of the directors. Luthorises directors to deduct from dividends payable, any money due from a particular shareholder to the company, whether on account of calls or otherwise. There must be at least three directors of a company. Shareholders who hold one quarter in value of the subscribed stock of a company may at any time by written requisition and notice call a special meeting of the company 330 SECRETARIAL PRACTICE S. 123. Failure to appoint an auditor at an annual general meeting enables any shareholder to apply to the Secretary of State to so appoint and to fix his remuneration. No auditor of any company or any partner or associate with that auditor shall be capable of being appointed a director or officer of a company. ves to the holders of preference shares and debentures, the same right to receive and inspect the balance sheets of a company and the auditors’ report, as is possessed by the holders of ordinary shares in the company. - annual meeting shall be held at such time and place in each year as the special Act, letters patent or by-laws provide, and in default of such provisions an annual meeting shall be held at the chief place of business of the company on the fourth Wednesday in January in every year. S. 137. Every company having a share capital, shall, on or before the 1st of June in every year, make a summary, made up to the 31st March preceding, and file it in duplicate in the department of the Secretary of State on or before the 1st June. Each copy must be signed by the president and manager, but if these two are the same person, then by the president and secretary, and both shall be duly verified by their affidavits. Part II of the Act (ss. 152-206) deals with companies incorporated after 22nd June, 1869, by special Act of Parliament and corresponds to the English Companies Clauses Act of 1845. Ss. 157-163 deal with directors of whom these may be as many as nine, but not less than three. S. 184 enacts that in the absence of other provisions in the special Act or the by-laws of the company, notice of the time and place for holding general meetings of the company shall be given at least ten days before in a newspaper circulating in the district which is the chief place of business of the company. S. 185. In the absence of other provisions, every shareholder shall be entitled to as many votes at all general meetings as he owns shares in the company. S. 197. Prohibits the loan by any company of its funds to any shareholder. S. 125. Gi Part IIT (ss. 207-211) applies to British and foreign mining companies, and enacts that any joint stock company or corporadon duly incorporated under the laws of Great Britain or under the laws of any foreign country for the purpose of carrying on mining operations, may on receiving a license from the Secretary of State, carry on mining operations in the provinces of Saskatchewan and Alberta, the North-West Territories and the Vukon DOMINION LEGISLATION—CANADA 831 Territory, and shall be entitled to the privileges of a free miner, subject to the laws and regulations governing and affecting free miners. In order to obtain such a license, a company must file in the office of the Secretary of State a certified copy of the Charter or Act incorporating the company; and shall also designate the agent or manager within the Yukon Territory authorised to represent the company and to accept process on behalf of the company. Notice of the issue of the license must be published in the Canada Gazette. All loan and trust companies incorporated after the passing of the Loan and Trust Companies Acts are “incorporated under those Acts; certain of their provisions apply also to loan and trust companies incorporated under the principal Act of 1927. vA ProvINCIAL ACTS. {lberia. The law relating to companies in Alberta is contained in the Companies Act, No. 14 of 1929, which includes provisions for winding up. There are also the Companies (Trust) Act, No. 167 of 1922 and the Insurance (Alberta) Act, No. 171 of 1922. The principal Act is based very largely on the English Companies Act, 1929, but the following points are noteworthy :-< © The maximum number of members of an unincorporated association is twenty. o company shall have power (inter alia) to issue notes payable to bearer or to engage in the business of banking, to construct or operate a railway, to carry on’ the business of insurance or to execute the office of executor, administrator, trustee, receiver, or liquidator except as expressly authorised by the Act. No loan shall be made by a public company to any shareholder or director. “ny three or more persons (or in the case of a private company, any two) may form a company. The section contemplates three types of limited company: (a) a company limited by shares, (b) a company limited by guarantee, and (c) a specially limited company. The statutory meeting of public companies must be held within six months from the date the company is entitled to commence business. company having a share capital may, ir so authorised by its articles, cause to be kept in any province, state or country, a branch register of members resident outside the Province. ’rovides for the creation of shares of no nominal or par value. 2 5. 105. If an auditor is not appointed at an annual general meeting or an annual general meeting is not held, the Court may, an application of any member of the company appoint an auditor for the current year. S. 112. The first annual general meeting of every company must be held within sixteen months from the date on which the company is entitled to commence business. - Thereafter, a general meeting of the company must be held once at least in every calendar year and not more than sixteen months after the last preceding general meeting. S. 117. Every company must once at least in every year, make an annual return which must be made up to the 31st December in the preceding year. S. 134. Every foreign company carrying on business in the ’ Province must be registered under the Act within thirty days after commencing to carry on business in the Province. By sub-s. 3 a foreign company not carrying on business for gain may be exempted, with the approval in writing of the Attorney General, from all or any of the provisions of the Act. 142. Every foreign company must have an attorney in the Province, resident in the city or place where the head office or place of business of the company in the Province is situate who shall be authorised by the company to accept service of process on its behalf. Notice of the appointment of a new attorney shall be published in the Alberta Gazette. 5. 143. Every foreign company must give prompt notice to the Registrar of any change in the address of its head office within or without the Province or in its directors SECRETARIAL PRACTICE British Columbia. The law relating to Joint Stock Companies in British Columbia is contained in the British Columbia, Companies Act of 1929, and is based on the English Companies Act. 1020. The following provisions are noteworthy :— S. 18. No company may be incorporated under the Act, or have power under the Act: — (a) to issue any note payable to the bearer thereof or any promissary note intended to be circulated as money or as the note of a bank, or to engage in the business of banking; or (b) to construct and operate a railway; or (¢) to carry on the business of insurance, except as DOMINION LEGISLATION—CANADA 833 authorised by s. 16 of the Act; or (d) to carry on trust business as defined by the ‘ Trust Companies Act,” R.S. C. s. 14. A company shall have as ancillary and incidental to the objects set forth in its memorandum of association, a variety of specified powers unless 2xpressly excluded by the memorandum in the case of any particular company; these specified powers include powers to acquire any real or personal property, to construct and maintain roads, tramways, sidings, bridges, reservoirs, wharves, ships and stores; subject to s. 145 ‘which excludes shareholders and directors), to lend money to any person or company having dealings with the company or with whom the company proposes to have dealings; to carry on any business capable of being conveniently carried on with the business of the company or calculated directly or indirectly to enhance the value of or to render profitable any of the company’s property or rights. The section does not apply to existing companies unless expressly adopted. Admits of shares either with or without a nominal or par value. Where the shares are without such value, the number of shares which the company is authorised to issue shall be stated in the memorandum of association. ») The amount of the capital of a company and the nominal or par value (if any) of its shares shall oe expressed in the denominations of money in the currency of Canada. company may change its name by a special resolution with the approval of the Registrar signified in writing. “rovides for the conversion of shares with nominal or par value into shares without nominal or par value and vice versa. —ontains similar provisions to s. 96 of the English Act of 1929, as regards an index to the register of members with the exception that the provision does not apply when the membership of the company is less than roo whereas the statutory maximum under the English Act is 50. Enacts that every public company shall have at least two directors (English Act, 1929, s. 98), one nf whom shall reside in the Province (s. qq). 334 SECRETARIAL PRACTICE S. 100. Requires companies to file with the Registrar a copy of any resolution changing the number of its directors, while s. 104, in the absence of any provision in the memorandum or articles, enables a director of a public company to be removed before the expiration of his period of office by a special resolution passed at a general meeting at which members holding not less than three-fourths of- such of the issued shares as carry the right of voting for the election of directors are present. The meeting may also by ordinary resolution appeint another person in his stead. S. 105. Lays down similar provisions to the English Act of 1929, s. 149, as regards the disclosure by directors of their interests in contracts. S. 106. Roughly corresponds to s. 152 of the English Act of 1929, making void any provision in the articles of a company or in any contract for exempting any director, manager or other officer of the company from or indemnifying him against any liability in respect of any negligence, default, breach of duty or breach of trust. ». 130. Prohibits house-to-house offers of shares in or debentures of a company unless a prospectus has been issued with respect to the shares or debentures so offered and filed in accordance with ss. 126 and 127 of the Act. These provisions are not quite identical with those laid down by 5. 356 of the English Act, of 1929. 3. 155. Provides that the first annual general meeting of every company shall be held within eighteen months from the date of incorporation and thereafter once at least in every calendar year and not more than fifteen months after the holding of the last preceding annual general meeting. S. 172. Enacts that every extra-provincial company which carries on business in the Province shall be registered under the Act within thirty days after commencing to carry on business in the Province. S. 185. Renders it obligatory for every extra-provincial company registered under the Act to keep at its head office in the Province a register of its members who reside in the Province. The register must contain the full names, addresses and occupations of the members and full particulars of anv transfer of shares. DOMINION LEGISLATION—CANADA 835 S. 197. Empowers the Lieutenant-Governor in Council to revoke and cancel the incorporation of a company and declare the company to be dissolved. S. 204. Specifies two methods of winding up:—(a) where a company passes a special resolution that it be wound up voluntarily, and (b) where the Court makes an order that the company be wound up subject to the supervision of the Court. It should be noted that the Act does not apply to companies limited by guarantee, which are still governed by the Companies Act, 1924 (R.S. c. 38). S. 71 of the 1929 Act, however, provides for the conversion of a guarantee company into an ordinary company. Manitoba. The principal Acts are the Companies Act, No. 35 of 1913, the Insurance Companies Act, No. 98 of 1913, the Mining Companies Act, No. 129 of 1913, the Winding-up of Companies Act, No. 205 of 1913, and the Loan and Trust Corporations Act, No. 41 of 1924. The only Amending Acts are to No. 98 of 1913 and they are Nos. 21 to 24 of 1914, No. 12 of 1917, No. 35 of 1924, Nos. 5 and 6 of 1925, No. 5 of 1926 and Nos. 5 and 6 of 1925, No. 5 of 1926 and Nos. 5 and 6 of 1928. The following provisions of the principal Companies Act, 1913, are noteworthy: — S. 3. Incorporation is obtained by application for Letters Patent to the Lieutenant-Governor by not less than five persons for any authorised purpose except those of a railway, insurance. or loan and trust company. company may not commence business until 10 oer cent. of the capital has been subscribed and to per cent. of the amount subscribed has been paid up. «¢ number of directors shall not be less than three nor more than nine. » directors may make by-laws relating to the management of the company, such by-laws to be subject to confirmation at the next annual meeting. dividend may not be declared out of capital or when the company is insolvent. directors are liable to all employees of the company for wages due to the latter up to one year. The directors may make by-laws to increase or decrease the capital or to subdivide the shares, out no such by-law is valid until sanctioned by a two-thirds majority of shareholders at a special meeting and confirmed by supplemenrarv Letters Patent 836 SECRETARIAL PRACTICE S. 45. The issue of shares at a discount requires the sanction of a two-thirds majority of the share-: holders at a special or general meeting. S. 54. Not less than 10 per cent. of the allotted stock must be called up within a year of the incorporation of the company. company, except one dealing in shares, may purchase shares in any other company except on the authority of a by-law passed by a twothirds majority of shareholders at a special meeting. ‘he directors may make by-laws for borrowing money; issuing or disposing of debentures; mortgaging property of the company; creating and issuing preference shares; creating and issuing debenture stock, and for the conversion of any class of shares or securities into any other class. Such by-laws require confirmation by a two-thirds majority of shareholders at a special meeting. 5. 80. Annual statement made up to 31st December previous must be filed by 1st February in each year. Extra-Provincial corporations. Corporations (other than those specially exempted) incorporated outside Manitoba require a license before carrying on business in the Province. The purchase or sale of goods by travellers, or by correspondence, if the corporation has no resident agent or place of business in Manitoba, does not constitute ‘carrying on business.’ (Ss. 107-108.) Such corporations must file with the Provincial Secretary a copy of their charter and regulations and a power of attorney appointing a resident agent. (S. 114.) All licensed corporations must file an annual return in the form required by s. 8o of the Manitoba Companies Act or such further or less information as the Lieutenant-Governor-in-Council may require. The Loan and Trust Corporations Act, No. 41 of 1924 applies to all loan corporations and trust companies carrying on business 'n Manitoba (not being chartered banks or insurance companies). The main provisions are: — A balance sheet is to be prepared at least once in every year. The accounts of the company are to be examined by an auditor at least once in every year and an auditor’s report must be made thereafter. DOMINION LEGISLATION—CANADA 837 A copy of the balance sheet and auditors’ report is to be delivered to each shareholder and to the minister at least ten days before the holding of the annual general meeting. The managing director, manager or secretary must prepare annually and forward to the minister a statement as to the financial position and affairs of the company’; such statement to be certified by the auditors. All trust companies must have at least 100,000 dollars unimpaired paid up capital before transacting business. Amending Act, No. 22 of 1914 provides 4hat when cancellation, revocation or surrender of Letters Patent is accidental, the Lieutenant-Governor may permit their renewal. [t also empowers a company to dispose of its undertaking or any part of it for such consideration as it thinks fit including shares of another company having similar objects, if authorised by the votes of a majority of the shareholders holding not less than two-thirds of the issued capital stock of the company. Amending Act, No. 23 of 1914 makes provision for the re-issue of redeemed shares, and exempts a by-law passed for the redemption of preference shares from being subject to confirmation by the shareholders unless the by-law also provides for cancellation of the shares so redeemed. Amending Act, No. 12 of 1917 enacts that any company duly incorporated under the law of Manitoba has the right to exercise its powers outside the Province and to accept extra-Provincial rights and powers. A special Act, No. 24 of 1914 deals with companies incorporated under private Acts of the Legislature of Manitoba, and the Company Fees Act, No. 21 of 1914, provides for increased fees on an increase of capital. Amending Act, No. 35 of 1924 enacts that letters patent may provide for the issue of shares of the capital stock with no par value except in the case of preferred stock having a preference as to principal, in which case the letters patent shall state the amount of such stock, its particular character and the amount of each share thereof which shall be 5 dollars or some multiple of 5 dollars, but shall not in any case exceed 100 dollars. The Act also gives power to form or reorganise companies with shares of no par value. Any two companies with the same or similar objects may, with the approval of the Lieutenant-Governor-in-Council, amalgamate. The agreement to so amalgamate must be passed by a two-thirds majority of the shareholders, after which application must be made to the Lieutenant-Governor for letters patent which shall be published in the Manitoba Gazette. Powers are given to sell or dispose of the undertaking of a company provided the resolution is passed by a majority in number of shareholders holding not less than two-thirds of the issued capital of the companv 2 1) 338 SECRETARIAL PRACTICE Companies incorporated under a private Act of the Legislature of the Province, must deposit annually a list of shareholders on or before the 1st Februarv in each year. Amending Act, No. 5 of 1925 contains small amendments to the Act of 1924 and enacts that a company shall possess as incidental and ancillary to the powers set out in the letters patent, a number of “general powers’ amongst which are power to carry on a business which may conveniently be carried on in connection with its present business or which may enhance the company’s property and rights; to acquire the whole or a part of the business of any person or company carrying on business which the company itself is authorised to carry on; to enter into partnership'or any arrangement for the union of interests, sharing of profits, etc.; to lend money to customers or others having dealings with the company. All these powers may be specifically withheld by the letters patent of the company or by supplementary letters patent. Power is also given by the Act for deeds to be executed on behalf of the company by an attorney. Amending Act, No. 6 of 1925 gives powers to licensed corporations to apply to the Lieutenant-Governor-in-Council for a variation of their license. Amending Act No. 5 of 1926 enacts that directors of companies must be shareholders and not be in arrears with their calls. Persons, however, who hold shares in trust as executors or trustees for an infant or cestut gue trust may be directors in virtue of such holding. A director absent from the Dominion, if authorised by the py-laws of the corporation, may by an instrument in writing, verified by affidavit, appoint a shareholder with sufficient qualification to act for him in his absence. The authority must not extend for a period longer than one year when it must be renewed and verified as previously. The Amending Acts of 1928, Nos. 5 and 6. contain minor amendments relative to Fees. Nova Scotia. Company legislation in Nova Scotia was revised and consolidated in the Nova Scotia Companies Act, No. 174 of 1923. The following amending Acts have been passed :—No. 70 of 1925, No. 53 of 1926 and further small amending Acts of 1927, 1928 and 1929. The principal Act follows closely the English Consolidation Act of 1908, with but few exceptions. It contains, however, no provisions for winding-up or for the registration of foreign companies which are dealt with in separate Acts. The following provisions may be noted :— S. 8. Any three or more persons may form a company except a banking, loan, trust or insurance company. 3. 83. Commission on shares may not exceed ten per cent. DOMINION LEGISLATION—CANADA 839 94. A yearly balance sheet must be submitted at each annual general meeting, certified by a chartered accountant or an auditor appointed pursuant to the articles. Winding-up is regulated by the Companies Winding-up Act No. 198 of 1923. As in the case of the other Provinces, it deals only with winding-up on grounds other than insolvency, and its provisions are almost identical with the other Provincial Winding-up Acts. Foreign companies are dealt with by the Domestic, Dominion and Foreign Companies Act, No. 173 of 1923. Any foreign corporation may be registered on filing a statement giving details as to its incorporation and capital, the situation of its head office, and the name and address of its registered agent in the Province. Amending Act No. 70 of 1925 provides for the issue of shares of no nominal or par value. No. 53 of 1926 gives the Registrar power to strike off the register, companies against whom a final winding-up order has been made, either under ‘The Winding-up Act of the Dominion of Canada’ or ‘The Winding-up Act of the Province of Nova Scotia.” Amending Act of 1927 contains minor amendments relative to debentures; that of 1928 confers the rights exerciseable under s. 120 of the English Act of 1908 as to a compromise or arrangement with creditors; and the 1929 Amending Act provides for registration fees of shares without nominal or par value. Special Acts relating to particular types of companies are the Trust Companies Act, No. 181 of 1923, the Loan Companies Act, No. 182 of 1923 (applicable to domestic companies), the Loan Corporations Act, No. 183 of 1923 (applicable to foreign countries) and the Insurance Companies Act, No. 187 of 1922 3 Ontario. The statutes of Ontario were all revised in 1927, and the principal Acts relating to companies are: — Chapte * of "927 (Companies Act). Extra-Provincial Corporations Act). Telegraph Companies Act). ‘Wharves and Harbours Act governing all companies registered for construction or maintenance thereof). insurance Act). Loan and Trust Corporations Act). Railway Act). Railway and Municipal Board Act; Tunicipal Electric Railway Act) I'elephone Act). Public Utilities Corporation Act Minority Shareholders Rights 2 Guarantee Companies Securities Ac. Cheese and Butter Exchange Act! 840 SECRETARIAL PRACTICE There have been but few amendments to these Acts of 1927, those affecting the Companies Act being Nos. 33 of 1928, 49 and 50 of 1929 and 37 of 1930. The first three all deal with the furnishing of further information by companies, and the last refers to share warrants and contains a few minor amendments dealing with auditors. The main provisions of No. 218 of 1927 are as follows :— 3, 1. ‘Company’ means a company having a share capital. Corporation includes a company with or without share capital. ¢. Incorporation is obtained by application,to the Lieutenant-Governor for letters patent by not less than five persons for any lawful objects, except those of a railway or of corporations within the meaning of the Loan and Trust Corporations Act. 5. Any or all of the shares of any company may be issued without any nominal or par value, provided sufficient statements are made in the letters patent. private company may be converted into a public company by supplementary letters patent if resolved by a two-thirds majority of shareholders and if the company files with the Provincial Secretary a statement in lieu of prospectus. 3. 16. The capital of a company shall not be increased by the granting of supplementary letters patent by the Lieutenant-Governor, until ninety per cent. of the authorised capital has been subscribed and fifty per cent. paid thereon. 3. 23. Contains many ‘general powers’ which a company shall be deemed to possess unless definitely withheld in letters patent or supplementary letters patent. 5. 37. Every private company shall have the words ‘private company’ on its seal, and upon every share certificate issued, the same words shall either be printed or written. 2. 47. The annual meeting of a company shall be held at such place and time as the regulations of the company provide. In default of any provision, the meeting shall be held on the first Wednesday in January in every year. 59. Transfers of partly paid shares are not permitted without the consent of the directors, who are jointly and severally liable if they permit such transfers to persons without means. DOMINION LEGISLATION—CANADA 841 S. 80-82. The directors of a corporation may make by-laws for borrowing money, issuing bonds, debentures, etc., and pledging such bonds and debentures, and also for creating and issuing any part of the capital as preference shares, and for the conversion of preference shares into common shares, debentures or debenture stock; debentures into debenture stock or preference shares or any class of shares or securities into any other class. No such by-law shall have effect until confirmed by a vote of shareholders present and holding not less than two-thirds of the issued capital represented at the meeting or by a vote of twothirds of the members so present or represented at a general meeting specially called for the purpose. Any by-law which has the effect of increasing or decreasing the capital shall be ineffective until confirmed by supplementary letters patent. There must be at least three directors of a company, and they must be elected by the shareholders in general meeting. person holding shares in the capacity of trustee or executor may in virtue of such holding be elected a director of a company; and where a corporation holds shares in trust, any officer of the corporation may be elected as a director. Contains similar provisions to s. 149 of the English Act of 1929 with regard to disclosures by directors of their interest in contracts. » company, except one dealing in shares, may sven if authorised by its constitution, purchase shares in any other corporation except by virtue of a by-law confirmed by a vote of shareholders present or represented by proxy at a general meeting called for that purpose and holding not less than two-thirds of the issued capital represented at the meeting. Directors are personally liable if a dividend is paid out of capital or when a company is insolvent. wo loan shall be made by a company to any shareholder: and if the section is contravened all directors and officers of the company who assented shall be jointly and severally liable to the company for the amount thereof. The directors of a company shall be jointly and severally liable to the labourers, servants and apprentices thereof for all debts not exceeding one year’s wages due for services performed for the companv while thev are directors. Provided ot 342 SECRETARIAL PRACTICE that no such liability shall accrue unless the company has been sued for the debt within one year after it has become due and the company has within that period gone into liquidation or has been ordered to be wound up. Ss. ror-112. Deal with the issue of prospectuses: the provisions contained therein approximate to the requirements of the English Act of 1929. S. 119. The provisions regarding the holding of a statutory meeting are the same as those contained in the English Act of 1929. ; default of the company in general meeting appointing auditors, the Provincial Secretary may appoint on the application of any member of the company. Every company incorporated under the laws of Ontario, and every company carrying on business in Ontario must deliver an annual return to the Provincial Secretary on or before the 1st February in each year. Ss. 153-160. Special provision for mining companies. A mining company may issue its shares at a discount, or at any other rate provided it is authorised to do so by the by-laws. No shareholder is personally liable for calls oeyond the amount agreed to be paid for the shares. The words ‘no personal liability’ must be added to the name of the company wherever used, and its shares must be marked ‘subject to call’ or ‘not subject to call’ as the case may be. Ss. 161-179. Special provisions for co-operative corporations. 3s. 180-193. Special provisions for Municipal and Public [Utility Companies. These fourteen sections apply to companies who may require to erect any permanent structure on any highway, stream or navigable waters. The annual returns of such companies must include a statement as to the cost of the work, plant and undertaking of the company, and a detailed description of any extension or improvement of the works or any new works proposed to be undertaken during the current year with an estimate thereof. Ss. 194-234. Winding-up. Ss. 196-213 voluntarily, and ss. 214-234 under an order of the Court. S. 196. A corporation may be wound up voluntarily where the period, if anv, fixed for its duration has 3S. 138. DOMINION LEGISLATION—CANADA 843 come to an end ; where the corporation in general meeting called for that purpose, has passed a resolution requiring the corporation to wind up; and where the corporation has passed a resolution that the corporation cannot, by reason of its liabilities continue its business and that it is advisable that it be wound-up. A winding-up shall be deemed to commence at the date of the passing of the resolution to wind up. corporation may be wqund up by order of the Supreme Court where it may be wound up voluntarily; where proceedings have been begun to wind up voluntarily and it appears to the Court that it would be expedient in the interests of the creditors and contributories that it be wound up under supervision of the Court: where in the opinion of the Court it is just and equitable for some reason other than bankruptcy or insolvency of the corporation that it should be wound up; where the letters patent have been declared forfeited or revoked or made void. Special provisions for Insurance Companies. J. r J IS. £ Extra ov" '1.al Corporations Act. «xtra-Provincie* poration created authority of an Ontario. -empts certain classes of ‘extra-provincial corsorations from the operation of the Ac xtra-provincial’ companies not exempted nv ¢ are required to take out a licence under the ACt. wh 1 ‘extra provincial’ corporation with a licence, may, subject to the limitation of the licence and subject to the provisions of its own charter or Act of incorporation, acquire, mortgage and dispose of real estate in Ontario and any interest therein to the same extent and for the same purposes as if it had been incorporated under the Companies Act. must on or before the 8th February in every year make a return to the government containing information similar to that required ander s. 138 of the Ontario Companies Act, together with any further information which the Minister mav require SECRETARIAL PRACTICE Quebec. The company law of Quebec is contained in the Revised Statutes of 1925 in the following Acts: — Chapter 223 Quebec Companies Act. » 224 Partnership Declaration Act (regulating limited partnerships). Winding up Act. ixtra Provincial Companies Act. Special Corporate Powers Act. Securities Sale Act. Mortmain Act. Juebec Railway Act. Railway Companies Special Undertakings Act. sas and Water Companies Act. dlectric Light and Water Companies Act. Electric Light and Power Companies Act. Celegraph Companies Act. Celephone Companies Act. Road Companies Act. Road Stoning Companies Act. Juebec Insurance Act. Diocesan Mutual Insurance Companies Act. Butter and Cheese Insurance Act. Trust Companies Act. Guarantee Companies Act. Safe Deposit Companies Act. Building Societies Act. Loan and Investment Societies Act. Building and Loan Societies Amalgamation Act. Juebec Co-operative Syndicates Act. Professional Svndicates Act 8 Chapter 223, Part I applies to Joint Stock Companies incorporated by letters patent and is the ordinary Companies Act of the Province. The Lieutenant-Governor may by ietters patent grant a charter to any number of persons not less than three who apply therefor, and others who have decome subscribers to the memorandum of agreement and who become shareholders in the company thereby created; to a corporation for any of the purposes or objects to which the legislative authority of a Province extends, except for the building and working of railways, the business of insurance or the transaction of trust business. No company shall commence business or incur any liability until 10 per cent. of its authorised capital has been subscribed and paid for. The directors of the company may make by-laws for the creating and issuing of any part of the capital stock as preferred stock or the conversion of preferred stock into common stock or anv class of shares into anv other class. DOMINION LEGISLATION—CANADA 845 No transfer of shares unless made by sale under execution or under an order of the court of competent jurisdiction shall be valid until entry thereof is duly made in the register of transfers. Chapter 223, Part II applies to all companies incorporated under Royal Charter except Railway, Insurance or Trust Companies or companies for which special provisions of law exist. The company shall not commence business or incur any liability before 10 per cent. of its authorised capital has been subscribed and paid for. The provisions of this Part of the Act are almost identical with Part I. Chapter 225. The Winding-up Act enacts that any Joint Stock company may be wound up voluntarily whenever the directors deem it expedient that the company shall be dissolved, but this power is dependent on the sense of a general meeting when the resolution must be carried by the vote of at least two-thirds in value of the shares represented by the shareholders present. Chapter 226. Extra-Provincial Companies Act. This Act includes all commercial corporations and Joint Stock companies not incorporated by or in virtue of an Act of the Legislature nf the Province or of the Parliament of Canada, of the Legislature of the late Province of Lower Canada, or that of the late Province of Canada, except Loan and Investment Societies, Insurance companies, Trust- companies, corporations and companies incorporated under or in virtue of an Act of a Legislature of another Province of Canada in which corporations and companies incorporated under and in virtue of the laws of the Province of Quebec are authorised to do ousiness without being obliged to take out a licence therefor. Chapters 228 and 229, the Securities Sale Act and the Mortmain Act, contain provisions relating to the purchase and sale of securities by a company and provisions dealing with the acquisition of land. The remaining Acts deal with special classes of companies. Saskatchewan. The law relating to companies in the Province of Saskatchewan is contained in the following statutes: — Companies Act, No. 28 of 1929 (which repeals all previous Companies Acts). Companies Winding-up Act, No. 82 of 1920 as amended by No. 11 of 1924, No. 20 of 1927 and No. 33 of 1928. Guarantee Companies Securities Act, No. 80 of 1920. Loan Companies Act, No. 78 of 1920. Public Utilities Companies Act, No. 29 of 1920 (which repeals all previous Public Utilities Companies Acts). Trust Companies Act, No. 77 of 1920, as amended tv Nu. 34 of ra21-22. No. 19 of 1uz7, and No. 31 of Ir 346 SECRETARIAL PRACTICE The Principal Act—No. 28 of 1929—is based largely on the English (Consolidation) Act of 1908. = There are, however, several noints worthy of notice: Limits the membership of unincorporated companies for all purposes to 20 persons. Any three or more persons may form a company for purposes other than constructing railways or telegraph lines, or conducting the business of an insurance, loan or trust company. The memorandum of association has a sixth clause, stating whether the company does or does not intend to invite the public to subscribe for its shares or debentures. Allows all or any of the shares of a company to be issued without nominal or par value. I a company may change its name by special resolution and application to the provincial registrar. At least one month’s notice must be given in the Saskatchewan Gazette. All companies working for profit and carrying on business in Saskatchewan must register under the Act, provincial companies upon incorporation and extra-provincial companies within chirty days after commencing business in the Jrovince. Upon registration, all companies other than companies not for profit, and Dominion companies, receive a licence from the registrar which must he renewed annually. 35. Every extra provincial company must before registration, file with the registrar a duly executed power of attorney under its common seal in form approved by the registrar empowering some person therein named and residing in some one of the cities, towns or villages of Saskatchewan to act as its attorney for the purpose of receiving service of process nn behalf of the company. J. +8. All companies registered under the Act must file an annual list and summary not later than the 1st March in each year after the date of its registration. 89. A special resolution is necessary for a change in the situation of the registered office. DOMINION LEGISLATION—NEWFOUNDLAND 847 S. 91. An annual general meeting must be held by all companies, once at least in every calendar year and not more than 18 months after the holding of the last preceding general meeting. The Public Utilities Companies Act applies to all gas, electricity and water supply companies. The Winding-up Acts deal with winding-up on grounds other than insolvency and their provisions are almost identical with the other Provincial Winding-up Acts. NEWFOUNDLAND. Company law in Newfoundland is governed by the Companies Act 1916 (Ch. 127 of the Consolidated Statutes), as amended by ch. 14 of 1920 and ch. 18 of 1929. The provisions of the main Act of 1916 are almost identical with those of the English Act of 1908, and the two amending Acts have altered it but slightly, the Act of 1920 referring solely to the registration of existing companies and that of 1929 relating exclusively to fees. There are one or two differences between the law of the Province and English law which are:— company or association mav be formed under the Act fer the nnrn-se ¢ carrying on the business or pankins v three or more persons may form a company. Jeneral meeting must be held once at least in every year. (There is no provision that it must not be held at a greater interval than fifteen months from the holding of the previous general meeting). <very company must hold a general meeting within four months after its memorandum of association 1s registered. change of name must be by special resolution together with the approval of the Governor-in-Council testified in writing under the hand of the Colonial Secretary. special resolution is one passed by a threequarters majority under the same conditions as under the English Act of 1908. The con-Armatory meeting, however, may be held at an interval of not less than seven days and not more than one month from the date of the holding of the first meeeting. a1y company may agree in writing to refer to arbitration any existing or future difference arising between itself and another companv or 3erson. SECRETARIAL PRACTICE NEW ZEALAND. The Companies Acts are as follows: — No. 26 of 1908, which is the principal Act, and the following Amending Acts, viz. Nos. 26 of 1910, 31 of 1919, 34 of 1920, 35 of 1921-22 and 25 of 1928. The principal Act of 1908 is similar in the main to the English Act of 1929:— 5S.” 5. Noassociation of more than ten persons may carry on business for gain unless incorporated. S. 13. The minimum number of members of a public and a private company is the same—seven. * S. 31. Every share certificate must state particulars of any preferential or limited rights or conditions } attaching to the shares or stock specified therein. S. 35. Directors are prohibited from registering transfers of shares on which calls made are unpaid. S. 52. In the case of a company with wasting assets, dividends may be paid out of profits notwithstanding loss of capital provided that the auditors certify that the remaining assets exceed the liabilities (excluding paid-up capital). S. 57. Commission may only be paid on shares offered to he public. S. 73. No director of a company other than a private company may receive fees or other remuneration if he is in debt to the company for calls or has been absent from board meetings for three months without the consent of the Board. Three years is substituted for the period of two years in Part III of the fourth schedule to the English Act of 1929 after which certain informa-‘ion is not required in a prospectus. 5. 99. Inthe case of a company not issuing a prospectus a statutory declaration must be made by the directors before commencing business that in their opinion the money subscribed is sufficient “0 justify the company in commencing business. governor is required, on the application of a majority in number representing two-thirds in value of the shareholders, to order the accounts of a company to be audited by the audit office, and, if the applicants so require, to order a valuation of the assets. Private Companies. The number of members must not exceed 25; all the authorised share capital must be subscribed for in the memorandum of association DOMINION LEGISLATION—NEW ZEALAND 849 Anything that may be done by a public company by resolution may be done by a private company by an entry in its minute book signed by at least three-fourths of the members holding in the aggregate at least three-fourths of the shares; a copy of the minute with signatures must be sent forthwith to every member who has not signed. If it appears to a Court in a winding-up that anything has been done by a member of a private company which, if he had been a sole trader and had been adjudged a bankrupt, would have been an offence under s. 138 of the Bankruptcy Act, 1908, the Court may order him to pay to the liquidator such sum (in addition to the sum for which he is liable under the constitution of the company) as it thinks just. »} . Ss. 2326-320. SS. - Companies incorporated outside the Dominion. A foreign company may appoint an attorney within New Zealand: the power of attorney with a copy of the certificate of incorporation of the company must be deposited in the Court nearest the company’s place of business before business is comrmenced. A foreign company must have an office in New Zealand where notices, etc., may be served: beforecommencing ousiness the attorney must insert a notice in three consecutive issues of the Gazefte and of some newspaper circulating in the place where it is proposed to carry on business. A foreign company must give three months’ notice of its intention to cease carrying on business. Special provisions relating to fire and marine nsurance companies. Minimum paid-up capial for all such companies, whether Dominion or foreign, 1s £50,000 intact. Special provisions relating to mining companies including foreign mining companies. Associations for mining purposes, other than mining for coal, exceeding twenty-five persons must be registered (s. 341). In the case of mining for coal the number is the same as for ordinary companies (Ss. 342). A mining company may De registered as a no-liability company* (s. 347° [ransfers in blank are prohibited (s. -4¢). ‘orelgn mining com must ke~ 3 branee under New South Wales 5 J SECRETARIAL PRACTICE register, appoint an attorney, file in its registered office in New Zealand a copy of any reports or balance sheets issued, permit shareholders to inspect the same without charge, and publish in the Gazette in a prescribed form a statement of the affairs of the company at the date of the report or balance sheet. Amending Act, No. 26 of 1910 corresponds to the provision of s. 75 of the English Act of 1929 regarding redemption and reissue of debentures. No. 31 of 1919 adds to s. 37 of the principal Act {which corresponds to s. 49 of the English Act of 1929) a proviso protecting a mortgage or charge secured on uncalled capital, and makes s. 37 of the principal Act non-applicable to private companies. No. 34 of 1920. S. 2 extends the powers of dairy companies to engage in certain associated industries without complying with the provisions of the principal Act relating to the alteration of the memorandum or articles of association. S. 3 amends s. 38 of the principal Act (which corresponds tos. 50 of the English Act) by adding the provisions of s. 45 (1) of the English Act of 1908 as to reorganisation of share capital which was repeated by Order in Council on 6th February, 1929. The provisions of the remaining Amending Acts do not call for special notice. INDIA. The Companies Acts are as follows: — Indian Companies Act, No. 7 of 1913, which is the principal Act, and Amending Acts, Nos. 11 of 1914 and 42 of 1920. The English Act of 1929 corresponds closely. The following variations are noteworthy :— 5. 75. Any official statement by a company of its authorised capital shall contain also the amount subscribed and paid-up. S. 100. Adds the words ‘misleading or’ to ‘untrue’ in s. 84 (a) (b) (¢) of English Act of 1908. S. 137. Gives the Registrar, on perusal of any document required to be submitted to him under the Act, power to call for anv information or explanation. Amending Act, No. 11 of 1914 makes the following additions to the principal Act: — S. 83A. Every public company registered after the commencement of the Amending Act shall have at least two directors. S. §3B. Subject to any regulations in the articles, the subscribers of the memorandum shall be the directors until the first directors are appointed bv the members in general meeting. DOMINION LEGISLATION—INDIA 851 Directors must disclose their interest in any contract and are prohibited from voting on such a contract. Where a company enters into a contract for the appointment of a manager in which contract any director is interested, the terms of the contract must be communicated to every member of the company. Every agent of a public company who enters into a contract on behalf of the company in which the company is an undisclosed principal, must file with the company an abstract of the terms of the contract, which must be laid before the directors at their next meeting. Amending Act, No. 42 of 1920 makes s. 91B of the preceding Act (prohibition of voting by a director interested in a contract) r10t applicable to a private company. 3 THE UNION OF SOUTH AFRICA. The Companies Act, 1926, which came into operation on the tst January, 1927, set up for the first time a uniform Company Law for all the Provinces of the Union of South Africa, which had hitherto been subject to different Provincial Acts. All the old Provincial Acts have accordingly been repealed. The new Act applies to all companies in every part of the Union, and is based on the Companies (Consolidation) Act, 1908; but there are a certain number of differences and special points worthy of note. The Registrar —A Companies Registration Office is established n Pretoria, and there is a Registrar of Comoanies appointed bv the Governor-General. Names.—The English Act of 1929 merely states that a company may not be registered by a name identical with that by which a company in existence is already registered, or so nearly resembles it as to be calculated to deceive. The South African Act goes further by forbidding the registration of a name identical with that by which a company or a foreign company is already registered. A ‘foreign company’ is defined as a company or association of persons which has for its object the acquisition of gain and 1s registered or incorporated under the laws of a foreign country which is defined as any state, country, colony, or territory, other than the Union whether or not included in the British Empire. Moreover, the Registrar may, except upon an order of the Court, refuse to register a company by a name which, in his opinion, is calculated to mislead the public or to cause annoyance or offence to any person or class of persons or is suggestive of blasphemy or indecency or a name representing an occupation or profession for which personal qualifications are required.” A company may not, without consent of the Governor-General, be registered by a name 352 SECRETARIAL PRACTICE which includes the words ‘Imperial,’ ‘ Royal,” ‘Crown,’ * Empire’ ‘Government,’ ‘ State,’ or any other word suggesting that it enjoys royal or official patronage. The name of a company may be changed by special resolution, together with the written consent of the Minister. Alteration of Memorandum.—The Act directs that certified copies in quintuplicate of the Order of the Court confirming the alteration and of the memorandum as altered must be delivered to the Registrar within thirty days from the date of the order. Articles—They may be altered by special resolution. The memorandum and articles, together with four copies, thereof, certified as true copies by a notary public or two directors on oath, must be filed with the Registrar. The originals are returned to ‘he company. Alien Shaveholders.—No alteration of any clause in a company’s articles of association restricting the amount of capital, voting power, or control held by or on behalf of aliens is effective without the written consent of the Minister, and his decision will be final and conclusive. Seal. —Every company may have a seal, and if it has, it shall be affixed to every instrument in the manner prescribed in the articles. Certificates of Incorporation will upon their mere production in the absence of proof of fraud be conclusive evidence that all the requirements of the Act in respect of registration, etc., have been complied with, and that the associations concerned are companies authorised to be registered and duly registered under the Act. S. 15 (2) of the English Act of 1929, dealing with the production to the Registrar of statutory declarations of compliance is omitted from the Union Act Associations not for profit—The definition of such associations in the Union Act is similar to that in the English Act of 1929, but it includes in addition ‘any association . . . formed . . . for any other purpose not associated with political aims, the pursuit of which is calculated to be in the interests of the public.’ Shares. —Every certificate of vendors’ promoters’, founders’, or management shares in a company, not being shares issued to shareholders of a company upon reorganisation or upon its amalgamation with another company shall, for a period of six months immediately succeeding the registration of the company, be distinguished as such by having the words ‘vendors’ shares,’ ‘promoters’ shares,” ‘founders’ shares,” or ‘management shares’ (as the case may be), conspicuously written on the face of the certificate. Share certificates may be under the hand of two directors or the sole director and secretary if the company has no seal. Shares in a company having a share capital must be distinguished by appropriate numbers. DOMINION LEGISLATION—UNION OF S. AFRICA 853 The Registered Office may not be changed from one province to another, except after notice to the Registrar and publication of the notice in the Gazette. The Annual List and Summary.—By the English Act of 1929, this list has to include all persons who are members on the 14th day after the first or only ordinary general meeting in the year. [n the Union Act, the day specified is the date of the meeting. Che list and summary must be completed within thirty days after the date of the meeting, and be transmitted in quadruplicate to the Registrar. The list must contain the names of all persons who are members holding shares not fully paid up and of all persons who, holding shares not fully paid up, ceased to be members of the company since the date of the last return or (in the case of the first return) of the incorporation of the company. The Register of Members must be kept in English or in Dutch at the registered office, and the particulars to be entered therein are similar to the English Act of 1929, except that the ‘occupation’ of members need not be entered. It may be closed for 60 days in each year. Non-members may inspect it on payment of half-a-crown, or such less sum as the company may prescribe. Share Warrants —No share warrants are to be issued in respect of any vendors’, promoters’, founders’, and management shares before the expiration of six months immediately succeeding the registration of the company. The General Meeting.—The statutory meeting is to be deemed to be a general meeting. At every general meeting there shall be submitted a duly audited balance sheet made up to a date not earlier than six months before such meeting. The statutory meeting seems to apply to private companies also. Statutory Report.—The provisions as to the statutory report do not apply to an association not for profit. The report must be sent to every member of the company at least fourteen days before the statutory meeting. Extraordinary and Special Resolutions.—It is not necessary to specify the intention to propose the resolution as an Extraordinary Resolution, although notice of intention to propose the resolution must be given together with its general nature.. In order to be carried, the resolution must be passed by not less than three-quarters of those present (in person or by proxy) so long as members holding in the aggregate not less than a quarter of the total votes of the company are present or are represented. If the necessary number of members are not present, the meeting stands adjourned until the same day in the following week, when the resolution will be deemed properly passed if sanctioned by three-quarters of those present, notwithstanding that less than a quarter of the total votes are represented. Special resolutions are passed in ike manner and confirmed at a duly convened meeting held not less than 14 days nor more than two months from the date of the irst meeting. At any meeting where an Extraordinary Resolution 354 SECRETARIAL PRACTICE is submitted to be passed or a Special Resolution to be passed or confirmed, a poll may be demanded by any person or persons for the time being entitled to vote and who hold not less than onesixtieth of the share capital represented at the meeting. Copies of all such resolutions must be submitted to the Registrar in quadruplicate within thirty days of the passing or confirmation of the resolution. The Registrar may, except upon the Order of the Court, refuse to record any Extraordinary or Special Resolution so transmitted to him, if such resolution appears to him to be contrary to the provisions of the Act or of the memorandum or articles of the company. Directors, Managers and Secvetary.—The names, ‘addresses and occupations of the directors and managers, as well as of the Secretary, must be set forth in the register at the company’s registered office. The Registrar must be notified within 14 days on the appointment of new directors, managers or secretary. The Prospectus must include among its particulars the nature of the voting power attached to each share and whether any special voting power is reserved to any founder or any other person, the nature and extent of any restrictions imposed on the transfer of shares, and the nature of any provisions precluding holders of shares or debentures from receiving and inspecting balance sheets, reports of the auditors. or other reports. Books, Accounts, etc.—Every company must keep in the English or Dutch language such books and accounts as will show a clear and correct record of its transactions. In the event of failure to comply with this provision, every director, manager, and secretary aware of such failure will be liable to a fine not exceeding £5 for every day during which the default continues. Debentures.—A company, if so authorised by its articles, may create and issue debentures binding as security for the fulfilment of the obligation undertaken thereunder so much of the property of the company as is described therein. If such debentures purport to bind only movable property, they may, if executed before a notary be registered in a Deeds Registry as if they were notarial bonds. If such debentures purport to bind immovable property, registration may be effected in a Deeds Registry by means of a mortgage bond executed on behalf of the company and hypothecating the property concerned in favour either of one or more debenture holders or of one or more persons as trustees for the debenture holders generally. Auditors and Balance Sheets—The auditors’ report to the annual general meeting must state whether the company has kept proper books and records. The auditors shall also submit a report showing the remuneration which has been received from the company by any director during the period under audit. The appointment of auditors must be notified to the Registrar within 20 days of the annual general meeting. The Union Act DOMINION LEGISLATION—UNION OF S. AFRICA 835 ss. 99 (3) and 100) entitle all shareholders and debenture holders equally to be furnished with copies of their balance sheets and auditors’ reports on payment of an amount not exceeding one shilling for every hundred words. The English Act of 1929 's. 130) gives the same right, but enacts that no charge shall be made. Private Companies must add the word ‘ Proprietary,’ before the word limited. With the sanction of a special resolution and subject to confirmation by the Court, a public company may ~onvert itself into a private company. Any existing company shall, upon satisfying the Registrar within six months after the commencement of the Act that it has altered its articles so as to omply with the provisions of the Act be deemed in all respects to be a private company. The provisions of s. 130 of the English Act of 1929 that any member of a private company ‘shall be entitled to be furnished within 7 days after request with a copy of the balance sheet and auditor’s report at a charge not exceeding 5d. per 100 words is not reproduced in the Union Act where members and debenture holders of private companies have the same rights in this respect as those of public companies (see above, under ‘ Auditors and Balance Sheets.) Winding-up.—A company may be wound up by the Court, if 75 per cent. of the paid-up share capital of the company has been lost or become useless for the business of the company. There is no provision for winding up subject to the supervision of the Court as in the English Act of 1929. An order for winding up shall operate in favour of all the creditors and contributories of the company as if the petition had been presented by them jointly. A winding-up of a company by the Court shall be deemed to commence at the time of the presentation of the petition. No person may be appointed a liquidator if he is insolvent, a minor or otherwise under legal disability, a person residing out-side the Union, a company or corporation, a person declared by the Court for certain specified reasons to be incapacitated (so long as the incapacity lasts), or a person removed by the Court from an office of trust on account of misconduct. Judicial Management instead of Winding Up.—Some novel provisions appear in the Act for the placing of a company under judicial management instead of winding it up. This step may be adopted if the Court is of opinion that, notwithstanding any present inability on the part of the company to meet itsobligations, there is reasonable probability that if placed under judicial management it will be enabled to meet its obligations, The order to this effect may be granted for a period stated in the Order or for an indefinite period. It may also be granted on application by any shareholder or creditor of the company, if the Court considers that, owing to mismanagement or other cause, such a measure is desirable; and on the application of any Minister of State or of the Master, if it appears to the Court that the company 856 SECRETARIAL PRACTICE has received from the Government a loan which remains unrepaid in whole or part and that mismanagement renders judicial management desirable. Licences.—Every company, including every foreign company, must obtain from the Receiver of Revenue of the district in which the principal office of the company is situated a licence in respect of each and every year. The licence will cost five shillings for each £1,000, or part thereof, of capital subscribed, subject to a minimum payment of £1. If a company is registered on or after the 1st July in any year, half duty only will be charged in respect of the licence for that year. The licence duty chargeable will not exceed £5 in respect of any year during which no active dSperations in connection with the principal business of a company are carried on within the Union, or during which the only business carried om is the registration of transfers of shares in the company. An application for a licence must be accompanied by a declaration setting out the subscribed capital of the company as at the first day of January of the year in respect of which the licence is to be issued, or, in the case of registration after the first day of January, or in the case of a foreign company within one month from the date when it establishes a place of business in the Union, the subscribed capital at the date when the company first commenced dusiness within the Union or first established a place of business therein as the case may be. Every company failing to take out a licence before the 31st January in any year or within a month of the day in which it commenced business within the Union will be obliged to pay as additional licence duty a further amount calculated at the rate of 10 per cent. of the annual licence duty for each month or part of the month for which the company is in default. All licence moneys due under this section will be a debt due to the Government of the Union. Associations not for profit will be exempt from the duty chargeable under this section. There is no similar provision regarding licences in the English Act of 1929. SOUTHERN RHODESIA. The law relating to joint stock companies in Southern Rhodesia is contained in a principal Ordinance No. 2 of 1895—and the following amending Ordinances:—Companies Amendment Ordinances, Nos. 11 of 1907, 11 of 1910, High Commissioners’ Notice, No. 7 of 1915, Nos. 8 of 1918, and 4 of 1920. Table of Cases NoTE: Abbreviations used in reference to cases cited. A.C. Acct. L.R B. & Ad B. & C. B. & S. Beav. Bingh. Burr. Ch. Ch.D. Ch. App. Com. Cas Cox. C.C. C.P. C.P.D D.&K De G. & De G,, j. & S. De G., M. & G. Dow & Cl. Drew. El. & Bl. £q. Ex. Ex. Ch. H. & C. H.L. H.L.C. [r. R. [r. L.R. J.P. [ur. House of Lords and Privy Council Appeal Cases. Accountant’ Law Reports. Barnwall and Adolphus. Barnwall and Creswell. Best and Smith. Beavan. Bingham. Burrows. Chancery Division. op ER] Chancery Appeals. Commercial Cases. Cox’s Criminal Cases. ~ommon Pleas Division. Dowling and Ryland. De Gex and Jones. - De Gex, Jones and Smith. De Gex, Macnaghten and Gordon. Jow and Clark. Drewry. Ellis and Blackburn. Equity. “xchequer. ixchequer Chamber. Turlstone and Coltman. nuse of Lords Cases. ixeports. -. md ‘ecace. jur. (N.S.) K.B. K.B.D L.. L.iw R. L.T. LT, N. L.T.F M.& kh M. & W. Mans. M.C. Veg. Mor. P.C. P.C.C. 2.B. 2.B.D. Rail. Cas. 5c. L.R. 5.L.R. 5.L.T. Sim. Smith 5.1. Sol. Jo. Taunt. I'I.R. Vee ' Jurist,” New Series. Kings Bench Division. Law Journal.’ Law Reports. Law Times.’ Law Times,” New Series. Law Times’ Reports. Moody and Robinson. Meeson and Welsby. Manson, Bankruptcy Cases. Modern Cases. Megone’'s Companies’ Cases. Morrel, Bankruptcy Reports. Privy Council Cases. Queen’s Bench Division. Railway and Canal Cases Scottish Law Reporter. Scottish Law Times.’ Simons. ‘mith’s Leading Cases. ‘olicitors’ Journal.’ aten ‘m2s' Law Reports. 38E1 ~Veek.y Notes. Weel-lv Reporter. Table of Cases PAGE Adair v. Old Bushmills Distillery Co. (1908), W. N. 24 ..... 27, 38 Aldborough Hotel Co., Re (1870), 4 Ch. App. 184: 39 L. J. Ch. 12; 17 WLR 424 coi i ee cr ice 56 Alexander v. Automatic Telephone Co. (1900), 2 Ch. 56; 69 L. J. Ch. 428; 82 L. T. 400; 48 W. R. 546; 16 TL. R. 330 .iiiviiivigisivianersnsnnrsnnrrsnnnn 92 Allen v. Gold Reefs (1900), 1 Ch. 656; 69 L. J. Ch. 266; 82'L. T. 210; 48 W. R. 452; 7 Mans. 417....28, 85, 93, 122 Alma Spinning Co., Re, Bottomley’s Case (1881), 16 Ch. D. 681; 50L. J. Ch. 167; 43L.T. 620; 29 W.R. 133...... 92 Amalgamated Syndicate, Re (1897), 2 Ch. 600; 66 L. J. Ch. 783; 77 L.T. 431; 46 W. R. 75 .. oii, 15 Ammonia Soda Co. v. Chamberlain (1918), 1 Ch. 266; 87 L.J.Ch.193;1181.T.38;62S5.].85;34T.L.R.60..178, 189 Andreae v. Zinc Mines of Great Britain (1918), 2 K. B. 454; 87 L. J. K. B. 1019; 24 Com. Cas. 49; 34 T. L. R. 488 96 Andrews v. Gas Meter Co. (1897), 1 Ch. 361; 66 L. J. Ch. 246; P 961. L132, 43 W. Bu B08. ss swans. runnvi une 25; 32, 37 Anglo-Austrian Printing Co., Re, Isaac’s Case (1892), 2 Ch. 158; 61 L. J.Ch. 481;66L.T. 593; 40 W.R. 518...... 145 Arizona Copper Co. v. Smiles (1891), 29 Sc. L. R. 134...... 326 Arnot v. United African Lands Co. (1901), 1 Ch. 518; 70 L.J.Ch. 306; 84 L.T. 309; 49 W. R. 322; 8 Mans. 179 135 Artisans’ Land Corporation (1904), 1 Ch. 796; 73 L. J. Ch. 581; 52 W. R. 330; 12 Mans. 98... . . ............. 187 Ashbury Railway Carriage Co. v. Riche (1875), L. R. 7 H.L. 653; 44 L. J. Ex. 185,33 L. T. 451; 24 W. R. 7094. .11, 15, 23 Ashbury v. Watson (1885), 30 Ch. D. 376; 54 L. J. Ch. 985; B41. T-27733 W.R. B82 ...vvcunrvnrnire sesnses 52 39 Ashworth v. Bristol Ry. Co., 15 L. T.,, N.S. 561............ 106 Astley v. New Tivoli (1899), 1 Ch. 151; 68 L. J. Ch. 90; 79 L.T. 541; 47 W.R. 326; 6 Mans. 64................ Atkins v. Wardle (1889), 58 L. J. Q.B. 377; 61 L. T. 23; BT.L.R. 734... 00un. : ws Att.-Gen. v. Anglo-Argentine Tramways (1909), 1 K.B. 677; 78 L. J. K.B. 366; 100 L. T. 609; 53 Sol. To. 358; 16 Mans. 118; 25 T. L. R. 339....... Att.-Gen. v. Carlton Bank (1899), 2 Q.B. 158 .. Att.-Gen. v. Cleobury, 4 Ex. 65 ......... . . .... : Att.-Gen. v. London & India Docks (1909), A.C. 7; 78 L. J. K.B.132;99L. T.2; 16 Mans. 5I.....ccc0vv 2ennnn Att.-Gen. v. Milford Docks Co., 60 L.T.453................ Att.-Gen. v. Regent’s Canal. etc., Ca. (1904). 1 K.B. 263, ... ReR TABLE OF CASE 859 PAGE 373 Att.-Gen. v. Ross (1909), 2 Ir. R. 246....... . Attwood v. Munnings (1827), 7 B. & C. 278; 1 M. & R. 66... Automatic Self-Cleansing Filter Co. v. Curinshame {1906}, » “ho ~:~ LJ]. Ch. 437; 94 L.T. 651 1° ‘ans. vey; C378 eee +. v. Charlesworth (1914), 311. 1 C A Baglan Hall Colliery Co., Re (1870), 5 Ch. App. 346; 39 L. ). Ch.591;23L.T.60; 18 W.R. 499.........c.c oc. Bahia Railway, Re (1868), L. R. 3 Q.B. 584; 37 L. J. Q.B. 126; 9B. &S.844;18L.T. 467; 16 W. R. 862.... .... 4" Baillie v. Oriental Telephone (1915), 1 Ch. 503; 84 L. J. Ch. 409; 112 L.T.569;31 TL. R.140.................. Bainbridge v. Smith (1889), 41 Ch. D. 462; 60 L. T. 879; 37 W.R.509...0cvv -isvines © save s-uunsnnnsees + I45, ~ Balaghat Gold Mining Co., Re (1901), 2 K.B. 665; 70 L. J. K.B. 866; 85 L.. T. 8; 49 W. R. 625; 17 T. L. R. 660.. Balkis Co. v. Tomkinson (1893), A.C. 396; 63 L. 1. O.B. 134; 60L.T.598;42W.R.204;1R. 178...... — Ballachulish Slate Quarries v. Bruce (1908), 45 S. L.. R. 667; 188. L.T. 48 ccc rose nunreme-- . .. Bank of Syria, Re (1901), 1 Ch. 115; 70 L. J. Ch. 82; 03 ».. I 547; 49 W. R. 100; 8 Mans. 105. . Baring-Gould wv. Sharpington Syndicat~ f(r! 68 I.. J. Ch. 429; 80 L. T. 739; ¢-Baroness Wenlock v. River Dee Ce. (18353; Barron v. Potter (1914) 1 Ch. 395.... Barrow v. Paringa Mines (1909) 2 Ch. 658....... Barton v. London & North-Western Railwav ‘-?Raq) 0.BD.77;59L.].Q.B.33;62L.T. 164; 35 + Barton v. North Staffordshire Rly. (1888), 38 Ch. 57 L. J. Ch. 800; 58 L. T. 549; 36 W. R. 754. . Bechuanaland Exploration Co. v. London Trading (1898), 2 Q.B. 658; 67 L. J. Q.B. 986; 79 L. 3 Com. Cas. 285; 14 T.L. R. 587........ ‘ Beckwith’s Case Re New British Iron Co. (1898), 1 Ch. 324; 67 L © x€ 78 L.T. 155; 46 W. R. 376; 5 Mans. 168 . 2u Bede Steam Shr Bell Brothers T. L. R. 68a. Bellerby v. Rowland :™ Marwor-14; 7v L. C. : 9 Mans. 291; 18 T. Bentinck’s Case, 18 Sol. Jo 271. Bertram v. Godfray (1830), : Knann~ Betts & Co. v. Macnachten (1910), 1 ( 1ooL.T.~~ ~~ Sol. fo. 52° Binney v. Ince 1. 1 Cu (1866), 292 . Bird v Bird’s Pate G z5 a8 OO - LU 150 0 2 I 14+ 78 7 Q 95 06 Ci, 200 " i 860 - SECRETARIAL PRACTICE PAGE Birkett v. Cowper-Coles (1919), 35 T.L. R. 298. ............. 69 Bisgood v. Henderson’s Transvaal Estates (1908), 1 Ch. 793; 77 L. J. Ch. 486; 98 L. T. 809; 24 T. L. R. 510; 52 S. J. 412; 15 Mans. 163.................. 215, 219, 220, 221 Bishop v. Balkis Co. (1890), 25 Q.B.D. 512; 59 L. J. Q.B. 565; B3L. TT. 600; 30 W.R. 08. covsnsnuncsssnisnobun ene 72 Blair Open Hearth Furnace Co., Re. (1914), 1 Ch. 390; 83L. J. Ch. 313; 109 L. T. 839; 21 Mans. 49........covueun.. 48 Blair Open Hearth v. Reigart (1913), 108 L. T. 665; 57 S. J. 500; 29 T.L. R. 449....... FEMBE PERE 138 Blaker v. Herts. & Essex Waterworks Co. (1889) 41 Ch. D. 399 196 Bloomenthal v. Ford (1897), A.C. 156; 66 L. J. Ch. 253; 76 L. T. 205; 45 W. R. 449...... Cee eee 42 Bodega Co., Re (1904), 1 Ch. 276; 73 L. J. Ch. 198; 89 L. T. 694; 52 W. R. 249; 11 Mans. 95. ........c......... 147, 148 Bolton & Co., Re, Salisbury Jones’ Case (1894), 3 Ch. 356; 64 L. J. Ch. 27; 71 L. T. 284; 1 Mans. 431; 7 R. 504 Bombay Burma Corporation v. Dorabji (1905), A.C. 213; 74L.J.P.C.41;91L.T. 812; 12 Mans. 169; 21 T.L. R. Bond v. Barrow Hematite Co. (1902), 1 Ch. 353; 71 L. J. Ch. 246; 86 L. T. 10; 50 W. R. 295; 9 Mans. 69; 1I8T.L. R. 249....... Ce eee ec ceeeaee Borax Co., Re (1901), 1 Ch. 326; 70 L. J. Ch. 162; 83 L. T. 638; 49 W.R. 212; 17 T.L.R. 1590. ......cnvn.nn. Borland’s Trustee v. Steel Brothers (1901), 1 Ch. 279; 70 L. J. Ch.51; 40 W. R. 120; 17 T.L.R. 45. cece eeevuennnn. 37 Boschoek Proprietary Co. v. Fuke (1906), 1 Ch. 148; 75 L. J. Ch. 261; 94 L. T. 398; 54 W. R. 359; 13 Mans. 100; 22 T.L. R. 196................. 124, I32, 143, 146, 159 Bowman v. Secular Society (1917), A.C. 349; 86 L. J. Ch. 568; 117 L.T. 161;61S. J. 478,33 TL. R.376.......... Bradford Banking Co. v. Briggs (1887), 12 A.C. 29; 56 L. J. Ch.364;56L.T.62;35 W.R.42I.......c00uuvu.nn. 64 Brailey v. Rhodesia Consolidated (1910), 2 Ch. 95; 79 L. J. Ch. 404; 102 L. T. 805; 54 S. J. 475; 17 Mans. 222.. 215 Braybrooke v. Meredith, 13 Sim. 271.. . . .............. 365 Brice v. Bannister (1878), 3 Q.B.D. 569.. cee.ee 365 Bridgewater Navigation Co., Re (1889), 14 A.C. 525; 59 L. J. Ch. 122; 61 L. T. 621; 38 W. R. 401; 1 Meg. 372.... 187, 263 Bridport Old Brewery Co., Re (1867), 2, Ch. App. 191; 15L.T. 643; 15 W.R.201...... ... .......... 123 Brinsmead & Sons v. Brinsmead (1897), 12 T. L.R. 631...... 13 Brinsmead, T. E. & Sons, Re (1897), 1 Ch. 413; 66 L. J. Ch. 290; 76 LL. IT. 100... turin iennneennnnns 13 British American Nickel Corporation v. M. J. O’Brien, Ltd. (r927), A.C. 369...... ‘ Ce eeesaae 195 British Asbestos Co. v. Boyd (1903), 2 Ch. 439; 73 L. J. Ch. 31; 88L.T.763; 51 W.R.667......ccvvvveneenann.. 146 British Equitable Assurance Co. v. Bailey (1906), A.C. 35; 725 L. J.Ch. 73; 94 L. T.1;: 13 Mans. 13; 22 T.L.R. 152 28 6 TABLE OF CASES 861 PAGE British India Steam Navigation Co. v. Inland Revenue (1881), 7Q.B.D.165;50L. J.Q.B. 517; 44 L. T. 378; 29 W. R. BYO yuusvnns rvs ChE MEM CERES EERE WW British Medical Association, Re (1888), 39 Ch. D. 61; 57 L. J. Ch.874;59L.T.134;57W.R.52.......cuiuun... British Murac Syndicate v. Alperton Rubber Co. (1915), 2 Ch. 186; 84 L. J. Ch. 665; 113 L. T. 373; 59 S. J. 494; BI ToL. Bee BGT uns r nonnresnanminonennns nue s anid Brown wv. British Abrasive Wheel Co. (1919), 1 Ch. 290; 88L. J.Ch.143;120L.T. 520;63S. J.373;35T.L. R. 268 ..... . Brown v. Inland Revenue (1000), $4 L. T. 71 .............. Brown, Shipley é - - "aland Revenue (1895), 2 Q.B. 598; 73 L. T. - T EEA ILM ASRS ERE ENE HE 363 Bryant, Powis & Bryant v. La Banque du Peuple (1893), A.C. 170; 62 L. + ©.C. 68; 68 L. T. 546; 41 W. R. BOO isuwivisces. seeeeaes 274, 275 Buchan’s Case (1879), . £.u. 549... ... 87,.303, 304 Buck v. Robson (1878), -{ .8D.686...................... 1365 Bulawayo Market Co., k. (1027 2 Ch. 458; 76 L. J. Ch. 673, 23 T.L. R. 714... . PENN ACRE CREE REN EE Burkinshaw v. Nichols (187¢, - .C. 1004; 48 L. J. Ch. 179; 39 L. T. 308; 26 W. R. i Ce Cee Burland vu. Earle (1902), A.C. 83; 71. [.P.C. 1; 85L.T. 553; 50 W. R. 241; 9 Mans. 17 Pb aaa Burns v. Siemens Brothers (1919), 1 Ch. 225; 88 L. J. Ch. 21° 120 L. T. 211....... . NT TIT Burt v. Bull (1895), 1 Q.B. 276; 64 L.. J. Q.B. 232; 71 L. T. 810, 43 W. R. 180... _. dE BEER Rew Burton v. Bevan (1908), » C... 240; 77 L. J. Ch. 5091; 99 L. T. 342; 15 Mans. 27: * ~swasvesmrenesonnson 45, Byrne v. Van Tienhoven (1880), 5 C. P. D. 344; 49 L. J. C.P. 316; 42L.T. 371,44 ". 1. 667.. 362 104 23 Caerphilly Colliery Co., Re, Pearson’s Case (1877), 5 Ch. D. 336;46L. J.Ch.339;25 W.R.618........ Cees 145 Cairney v. Back (1906), 2 K.B. 746; 75 L. J. K.B. 1014; 96 L. T. 111; 14 Mans. 58; 22 T. L. R. 776. . 261, 290 Caldwell v. Caldwell (1916), W. N 7o... ec egw ‘eo 35 Cambrian Peat Co., Re (1875), 31 L. T. 773; 23 W. R. 405. ... 54 Campbell’s Case (1873), 9 Ch. App. 1; 43 L. J. Ch. 1; 29 L. T. 519;22 W. R. 11° Ri Canadian Oil Works C 1o Ch. App. 59° 24 W. R. 101.. Canning Jarrah Timber 416; 82 L. T. 4cc ; . Capital Fire Insurance Association, Re (182 52 1... Ch. 20; ,7L.T. 123; 30 W. K. 9,,. Caratal New Mines, Re (1902), 2 Ch. 498; 71 L. 87L.T »,50W.R.572:9Mans. 414: 181. 362 SECRETARIAL PRACTICE PAGE Caridad Copper v. Swallow (1902), 2 K.B. 44; 71 L. J. K.B. 601; 86 L. T. 699; 50 W. R. 565.. ‘s 146 Carmichael, Re (1896),2Ch.643.........oovvuennennean... 284 Carriage Supply Association, Re (1884), 27 Ch. D. 323; 53 L. J. Ch. 1154; 51 L. T. 286; 33 W. R. 411... .. 145 Carton, Re (1923) 30 T. L. R. 104. +e vvviiinninennnnnnn. 237 Cawley & Co., Re (1889), 42 Ch. D. 209; 58 L. J. Ch. 633; 61 L.T. 601; 37 W. R. 602; 1 Meg. 25I........ 92, 334, 336 Chapel House Colliery Co., Re (1883), 24 Ch. D.259.......... 197 Chapman v. Smethurst (1909), 1 K.B. 927; 78 L. J. K.B. 654; 100 Lo TL 465. cov ii in tiie ieee 14 Charlesworth v. Faber (1900), 5 Com. Cas. 408.............. 1369 Chatenay wv. Brazilian Telegraph Co. (1891), 1 Q.B. 79; 60L.J.Q.B.295;63L.T. 739; 30 W.R.65.......... 276 Chicago Railway v. Inland Revenue (1897), 75 L. T. 572...... 363 Chida Mines v. Anderson (1905), 22 T. L. R. 27... , seEmEE 81 China Steamship Co., Re (1869), 38 L. J. Ch. 512............ 92 City Equitable Fire Insurance Co., Re (1925), 1 Ch. 407..... 22, 185 Civil Service Co-operative Society v. Chapman (1914), W. N. 360; 30 T.L.R. 679. cov viiii ir iii tiie i4 Clark v. West Calder Oil Co. (1882), 9 R. 1017; 19S. L. R. 757 3I0 Clarke v. Hart (1858), 6 H. L. C. 633; 27 L. J. Ch. 615; 5 Jur. (N.S) 447.000 vvven. AREER FL RRAE SC BEEE 5s HE 93 Clinch v. Financial Corporation (1868), 4 Ch. App. 117; 38L.J.Ch.1;19L.T. 334; 17W.R. 84.......... 211, 217 Coalport China Co., Re (1895), 2 Ch. 404; 64 L. J. Ch. 710; 73 L.7T. 46; 44 W. R. 38; 2 Mans. 532; 12 R. 462...... 78 Coasters Ltd., Re (1911), 1 Ch. 86; 80 L. J. Ch. 89; 103 L. T. 032; IB MANS. T53:svuanitvnansssnsu-snnnstonssssnn 42 Collaroy Company v. Giffard (1928), Ch. 144. “vee... 27,38 Collins v. Associated Greyhound Racecourses (1930), 1 Ch. 1.. 54, 56 Colmer, Re (1897), 1 Ch. 524; 66 L. J. Ch. 326; 76 L. T. 323; 483 W. R. B48 uns isvunssensnssonnsssnnnsrs anne 28, 35 Colonial Bank v. Whinney (1886), 11 A.C. 426; 56 L. J. Ch. 43;55L.T.362;34 W.R. 705;3Mor.207............ 37 Colonial Gold Reef v. Free State Rand (1914), 1 Ch. 382; 83 L.]J.Ch.303;110L.T.63;58S.].173;30T.L.R.88..136, 273 Committee of Clearing Bankers v. Inland Revenue (1896), IB. 222... 00... 366 Compagnie de Mayville v. Whitley (1896), 1 Ch. 788; 65 L. J. Ch. 729; 74 L. T. 441; 44 W. R. 568.0... coven. I51 Compagnie Générale, Re, Campbell's Case (1876), 4 Ch. D. 470; 35 L. T. 900; 25 W. R.299........ .. .. occ... 08 Concessions Trust, Re, McKay's Case (1896), 2 Ch. 757; 65 L. J. Ch. 909; 75 L. T. 298; 3 Mans. 274.......... 72 Consolidated South Rand Mines Deep, Re (1909), 1 Ch. 491; 78L.J.Ch.326;100L.T.319........ _....vivoe.. 217 Consort Deep Level Gold Mines, Re (1897), 1 Ch. 575; 66 L. J. Ch. 122; 76 L.. T. 300; 45 W. R. 227.........cvvnt, 99 Cooper, Cooper & Johnson, Re (1902), 51 W. R. 2314; W.N.199 210 TABLE OF CASES Copal Varnish Co., Re (1917), 2 Ch. 349; 117 L. T. 508 ..... Cork & Bandon Railway v. Goode (1853), 13 C.B. 827; 22 L.. | C.P. 198; 17 Jur. 555; 1 W.R. 410............. Cotman v. Brougham (1918), A.C. 514; 87 L. J. Ch. 379; 119 L.T.162;62S. J.534;34 T.L.R. 413.......... County of Gloucester Bank v. Rudry Colliery Co. (1895), 1 Ch. 629; 64 L. J. Ch. 451; 72 L. T. 375; 43 W. R. 486, 2Mans, 223; 12 R. 183.ucernr- wrpe-- ww wd Cox-Moore v. Peruvian Corporation (1908), 1 Ch. 604; 77 L. J. Ch. 387; 98 L. T. 611; 15 Mans. 19I...........c.0u. Cree v. Somervail (1879), 4 A.C. 648; 41 L. T. 353; 28 W. R. 34 Cuff v. London & County Land Co. (1912), 1 Ch. 440; 81 L. J. Ch. 426; 19 Mans. 166; 106 L. T. 285; 28 T. L. R. 213... Currie v. Consolidated Kent Collieries (1906), 1 K.B. 134; 75 L.J. K.B.199; 94 L.T. 148. ; Pa ERE HR Cycle-makers Co. v. Sims (1903), 2 72 1. J. K.B. 160; 88 L.T.360;19T.L.R ~- Ce eee Cyclists’ Touring Club, Re (1907), ~~; 76 L. J. Ch. 172; 06 L..T. 780: 14 Mans. 52; <- i. R.220.. . hE Dafen Tin Plate Co. v. Llanelly Steel Co. (1920), 2 Ch. 124.... Daily Telegraph Newspaper Co., Ltd. v. M’Laughlin (1904), AC 776 coiivinenverrns » , Danby v. Coutts & Co. (1885), 2 Ch. D. 500. D.’Angibau, Re (1880), 15Ch. D. 228. .... .... . D’Arcy v. Tamar Railway (1867). L. R. 2 Ex. 158; 36 L. J Ex.37;13L.T. 626; 4H. &C. 463; 14 W.R.068.... . Davey v. Williamson (1898), 2 O.B. 194; 67 L. J. OQ.B. 66; 78 L.T. 755; 46 W. R. 57x... ove oun. Davison v. Gillies (1879), 16 Ch. D. 347 (»); 50 L. J. Ch. 192 (n° 44 L. T. 92 (n).... eerie : Dawson v. African Trading Co. (1898), 1 Ch. 6; 67 L. J. Ch. 47; 77 L. T = W. R. 132; 4 Mans. 372; 14 T.L.R. 30... . ber eaeeeee.as 145 Debenham v. Mellon C 24; 50 L. J. Q.B. 155; 43 L.T. 673; 2 q J.P.252.... oo... Demerara Rubber Cu. |. C... 331; 82 L. J. Ch. 220; 108 L. T. 318.. SE. EERE REE EE. F8. Dent v. London Tramways Co. (1880), 16 Ch. D. 344; 50 L. | Ch. 190; 44 L. T. 01... .. (0. civil eioen De Rosaz v. Anglo-Italian Bank (.869), L.. R. 4 O.B. 462; 38 L.J.OQB 161- WwW © Cee Deuchar v. Gas Ligl~ T.L.R.563.... Dexine Co., Re (1+ ce Deyes v. Wooc . K.B. 55% LT. .o Dickinson v. Doc ds . Discoverers’ Fincic =or-auc ., Lindlar’s Case (1+ £ Cu. 12 ~¢! ).Ch. 103; 101 I.. T. 150; 54 Sol. 87-26 T. i. IX. 201 863 PAGE AR [6 "52 197 81 185 238 24¢ [ 20 273 275 277 Toi 8 38 SU 7 364 SECRETARIAL PRACTICE Dixon v. Kennaway (1900), 1 Ch. 833; 69 L. J. Ch. 501; 82L.T. 527; 7Mans. 445. «cur oeunnuennnnnnnnnn., 42 Doloswella Rubber Estates (1917), 1 Ch. 213; 86 L. J. Ch. 223; 1150. T.853............. tee te eee 34 Dominion of Canada General Trading & Investment Co. v. Brigstocke (1911), 2 K.B. 648; 80 L. J. K.B. 1344; 105 L. T.. 894; 55 Sol. Jo. 633; 27 T.L. R. 508. ..... 96, 292 Doward, Dickson & Co. v. Williams & Co. (1890), 6 T. L. T. 316 284 Dowdall v. Allan, 19 L. J. Q.B. 41..... .... 369 Dowson & Jenkins, Re (1904) 2 Ch. 219. . a Ceeieea. 275 Drew v. Nunn (1879), 4 Q.B.D. 661.68 L. J.Q.B.591;40L.T. 671;27 W.R.810............ env 252 Duce, Ex p. (1879-80), 13Ch. D. 429. ...... . .uuuuuo.... 139 Dunderland Iron Ore Co., Re (1909), 1 Ch. 446; 78 L. J. Ch. 237; 100 L. T. 224; 16 Mans. 67. .....ooouvunnnnnn.. 196 Dunstan v. Imperial Gas Co. (1833), 3 B. & Ad. 125; 1 L. J. KB. 49 ........ * mirtavierervnsrncunsen V6 Dutton v. Marsh (1871), L. R. 6 Q.B. 361; 40 L. J. Q.B. 175; 24 L. T. 470; 19 W. R. 754. . Co PAGE I4 Earl of Buckinghamshire v. Drury, 2 Eden, 72 .............. East Anglian Railway ». Eastern Counties Railway (18352), 11C.B. 775; 21 L. J.C.P. 23; 16 Jur. 249............ East v. Bennett Brothers (1911), 1 Ch. 163; 80 L. J. K.B. 123; 103 L. T. 826; 55 Sol. Jo. 92; 18 Mans. 145; 27 T.LLR. 103. .ciiiinnnnnn. Cerri Easton v. London Joint Stock Bank (1887), 34 Ch. D. 95; 56 L. J. Ch. 569; 55L.T.678;35 W.R.220.......... East Pant Du United Lead Mining Co. v. Merryweather (x864), 2 H. & M. 294; 10 Jur. (N.S) 231; 13 W. R. 216...... Eley v. Positive Life Assurance Co. (1876), 1 Ex. D. 88; 45L. J.Ex. 451;34L.T. 190; 24 W.R.338.......... Elliott v. Bax-Ironside (1925), 41 T. L. R. 631 . re mews English & Scottish Investment Co. v. Brunton (1892), 2 Q.B. 700; 62 L. J. Q.B. 136; 67 L. T. 406; 41 W. R. 133; English, Scottish & Australian Bank, Re (1893), 3 Ch. 385; 62 L. J. Ch. 825; 69 L. T. 268; 42 W. R. 4; 2 R. 574.. Ernest v. Loma Gold Mines (1897), 1 Ch. 1; 66 L. J. Ch. 17; 75 L. T. 317; 45 W. R. 86................ 135, 136, 139 Etheridge v. Central Uruguay Railway (1913), 1 Ch. 425; 82L. J. Ch. 333; 108L.T. 362; 57S. J.341;29T.L. R. Evans v. Brunner, Mond & Co. (1921), 1 Ch. 359; go L. J. Ch. 204; 124 L.T. 460... co iii i i iii i 16 Evling v. Israel & Oppenheimer Ltd. (1918), 1 Ch. 102...... Igo Exchange Trust, Re, Larkworthy’s Case (1903), 1 Ch. 711; 72 L. J. Ch. 387; 88 L. T. 56; 10 Mans. 19T.......... 94 Express Engineering Works, Re (1910), 1 Ch. 466. .. ee..127, 158 106 12 129 83 135 25 14 197 140 220 TABLE OF CASES B65 PAGE Faure Electric Accumulator Co., Re (1888), 40 Ch. D. 141; 58 L. J. Ch. 48; 59 L. T. 918; 37 W. R. 116; 1 Meg. 99 Finance and Issue v. Canadian Produce Corporation (1905), t Ch. 37; 73 L. J. Ch. 751; 91 L. T. 685; 53 W. R. 170; 11 Mans. 412; 20 T.L. R. 807. ........ coin Fine Cotton Spinners v. Cash (1907), 2 Ch. 184; 76 L. J. Ch. 670; 97 L. T. 537...... LEERE BEN 13 Fireproof Doors, Re (1916) 2 Ch. 142...... sassnsnss 14%, 152 Fisher v. Black & Whit: Publishing Co. (1901), 1 Ch. 174; 70 L. J. Ch. x75; ¢ +. T. 305; 49 W. R. 310; 8 Mans. 84 .. ~ee.. 21, IQO Flitcroft’s Case, J vchanee Banking Co. (1882), 21 Ch. D. 519; 52 L. 1. ch. 21~ ~3L.T.86;31 W.R. 174...... Florence Land Co., Re (187%), 10 Ch. D. 530; 48 L. J. Ch. 137; 39 L. T. 589; 27 W. R. 236.... Cerera es Follit v. Eddystone Granite Quarries (1892), 3 Ch. 75; 61 L. J.Ch. 567; 40 W.R.667.... ..ccviuiivnnen. Food Controller v. Cork (1923) A.C. 647; 39 T.L.R. 699..... Foster v. Bates (1843), 12 M. & W. 226; 1 D. & L. 400; 13L. J. Ex. 88; 7 Jur. 1093... : But Han France v. Clark (1884), 26 Ch. D. 257; 53 L. J. Ch. 585; s0L.T. 1;32 W.R. 466........ .. Frith v. Frith (1906), A.C. 254... CL ce lee Frost & Co., Re (1899), 2 Ch. 207; 68 L. J. Ch. 544; 80 L. T. 849; 48 W. R. 39... : CER naw Fruit & Vegetable Growers - {€kewich (1912), 2 Ch. 52; 8r L. J. Ch. 499; 19 lians. 206; 50 Sol. To. 502; 28 T. L. R. 411... Ines Fuller v. McMahon (1900), . . Ch. 142; 81 L. T. 715; 7 Mans. 3c, . Furnivall v. Hudson (1893), 1 Ch. 3° 92 275 Galloway v. Hallé Concerts (1915), 2 Ch. 233; 84 L.J. Ch. 723; 59 S. J. 613; 31 T. L. R. 469. ES 1 8 “use Garden Gully Co. v. McLister (1875), 1 A.C. 39; 33 L. T. ¢c 24 W.R. 744....... ‘a Gas Meter v. Diaphragm, etc., Co. (1925), 1 T. L. R. 342.. Gee v. Lane (1812), :5 East 592... . ET General Auction ¢~ J Smith (1891), 3 Ch. 432; 60 L. J. Ch. 723; 65 L 12%; 40 W. R. 106..... 17, General Council of the Bar v. Inland Revenue (1907), 1 X.B General Motor Cab Ce (1912. Ch. 377; 81 L. T. Ch. 504 106 L.T. 709; * T. L. R. 352... General Radio Co., R' /1029), W. N. 172.. George Whitechurch v. Cavanagh (1902), A.C. 117; 71 _ K.B. 400; 85 : . T. 349; 50 W. R. 218; o Mans. 17 T. L. R. 74€ i BERR AREER AE ema German Date Coffee Co., Re (1882), 20 Ch. D. 169; 51 L. j. Ch. 564: «+6 L. T. 324, 30 W. R. 717.. JZ S72 56 :82 Yb 73 dr 4 v4 866 SECRETARIAL PRACTICE PAGE Gibson v. Barton (1875), 10 Q.B. 329; 44 L. ].M.C. 81; 32 L. T. 396;23W.R. 858... iii iiiiiiiiii en e.. T129, 130 Gilbert's Case, Re National Provincial Marine Insurance Co. (1870), 5 Ch. App. 559; I8 W.R.938................ 92 Glossop v. Glossop (1907), 2 Ch. 370; 76 L. J. Ch. 610; 97 L. T. 372; 14 Mans. 246. ....................... 148 Gold Fields, etc., Co. v. Consolidated Gold Fields, etc., Ltd. (1926), 1 Ch. 338; 95 L. J. Ch. 329; 135 L. T. 14; 42 T.L.R. 261; 70S. J. 426.0 c.uveenninenn nanan. 327 Gooch’s Case (1872), 8 Ch. App. 266..... ... 106, 108 Goodfellow v. Nelson Line (1912), 2 Ch. 324......couuun.... 195 Goodwin v. Robarts (1876), 1 'A.C. 476; 45 L. J. Ex. 748; 35 L.T. 179; 24 W.R. 987. ........ciiiiiiinnnn... 199 Gosling v. Gaskell (1897), A.C. 575; 66 L. J. Q.B. 848........ 206 Goslings ‘& Sharpe v. Blake (1889), 23 Q.B.D. 324; 58 L. J. QB. 446;61L.T. 311; 37 W.R. 774. . cece v vena. Governments Stock Co. v. Manila Railway Co. (1897), A.C. 81; 66L. J.Ch. 102; 75 L. T. 553; 45 W.R. 353. ......... Great Britain Steamship v. White, 19 Rettie, 109............ Great Northern Piccadilly, etc., Ry. v. Att.-Gen. (1909), A.C. 1 Great Northern Salt & Chemical Works, Re (1889), 44 Ch. D. 472; 59 L. J. Ch. 288; 62 L. T. 231; 2 Meg. 46........ Greenwell v. Porter (1902), 1 Ch. 530; 71 L. J. Ch. 243; 86 L.T. 220; g Mans. 85..ccueeiuninenrnernennnnnenn Grenfell v. Inland Revenue (1876), 1 Ex. D. 242. ........... Greymouth Point Elizabeth Co., Re (1904), 1 Ch. 32; 73 L.J.Ch.g2; 11 Mans. 85.............. Cea Griffith v. Paget (1877), 5Ch.D. 894......c0u0 © .vvunnn. - v. ——— (1877), 6 Ch. D. 511; 46 L. J. Ch. 493; 37 LL. TT. 141; 25 W. R523. cient ii ieeennennn Grosvenor Bank v. Boaler (1885), 49 J.P. 774. vce vvvvvnnnn. Grundy v. Briggs (1910), 1 Ch. 444; 79 L. J. Ch. 244; 101 L.T.001;5480L JO. 163... .00uiiirininnnrnnnnnnn. Guardian Assurance Co. (1917), 1 Ch. 431; 86 L. J. Ch. 214; 116 L. T. 193; 61 S. J. 232;33 T.L.R. 169.......... 34 Gunn’s Case, Re Universal Banking Corporation (1867), 3 Ch. App. 40;37L. J.Ch. 40; 17L.T. 365; 16 W.R. 97 56 Hadgett v. Inland Revenue, L. R. 3 ExD. 46.............. Halifax Sugar Co. v. Francklyn (1890), 59 L. J. Ch. 591; 62 L.T. 563; 2 Meg. I20...cuvun: vrierinncnenennenns Hamilton v. Vaughan-Sherrin Electrical Co. (1894), 3 Ch. 589; 63 L. J. Ch. 795; 71 L. T. 325; 43 W. R. 126; 8 R. 750. . Hammond v. Prentice (1920), 1 Ch. 201; 89 L. J. Ch. 91; 36 T. LL. R.98. iii i ei ei eee 9 Hannan’s Empress Co., Re (1896), 2 Ch. 643; 65 L. J. Ch. 002; 75 Li. LL 45. citi titi ti ie ienenanennnen 55 Harben v. Phillips (1882), 23 Ch. D. 14; 46 L. T. 334; 31 W.R. I73.0iiiiit tiiiiieine tv tieenenena.. 130, 148 Hardoon v. Belilios (1901), A.C. 118: 70 L. J. P.C. 9; 83 L. T. 572: 40 W.R. 200: 17T. LL. R. 126. . areas 65 353 I51 57 TABLE OF CASES Harper v. Godsell (1870), L.R.5Q.B. 422.......... ...... Harris's Case, Re Imperial Land Co. of Marseilles (1871), 7 Ch. App. 587; 41 I. T. Ch. 621; 26 L. T 7&~ ~~ W. R. 600... ees . Hawkes v. Eastern Counties Railway (1855), 5 H. L. ©. 337; 24L.J. Ch. 601;3W.R.609............. Hawksley v. Outram (1892), 3 Ch. 359........ Hay v. Goldsmidt (1804), 2 Smith 79; 1 Taunt. 349....... Haycraft Gold Reduction Co., Re (1900), 2 Ch. 230; 69 L. , Ch. 497; 83 L. T. 166; 7 Mans. 243; 16 T. L. R. 350.... Henderson v. Bank of Australasia (1890), 45 Ch. D. 330; 59 L. J. Ch. 704; 2 Meg, 30%. conv smnnsnnnecansunes 134 Hendricks v. Montagu (1881), 17 Ch. D. 638; 50 L. J. Ch. 456; 44 L.T. 879; 30 W.R. 160........... cans Hercules Insurance Co., Re, Pugh & Sharman’s Cases (1872) 13 Eq. 566; 41 J.. T. Ch. 580; 267 Hester & Co., Re (18- L.T.Co - Hibberd v. Knight (i040, 2 Ex. 11; . IBZ sonur v su = Hibblewhite v. McMorine (1840), 6 M. & W. 200; - Ex. 217; 2 Rail. Cas. 51........cvvnenn. Hilder v. Dexter (1902), A.C. 474; 71 L. J. Ch. 781; &7 .. 311; 51 W. R. 225; 9 Mans. 378; 7 Com. Cas. z. 18 T. L. R. 800 Hill v. Patton, 8 East ~ Cee eee eee Hobbs v. Wayet (1&87), 36 Ch. BP. 256; 57 L. T. 225, W.R.78..0. cosn .. Home & Colonial Insurance Co., Re (1930), 1 Ch. 102..2~0, 25. Home and Foreign Investment Cor-'oration. Re (191% 72; 106 L. T. 259; 56 Sol. jo Homer District Gold Mines, Re (I. L.J.Ch.134;60L.T. 97. Hooper v. Herts (1906), 1 Ch. 549; 75 L 324; 54 W. R. 350; 13 Mans. 85... Hopkinson v. Mortimer Harley & Co. (1917) : Cn. 64 86 L.J.Ch. 467; 116 L. T. 676;61S.).384. .... Houghton & Co. v. Nothard Lowe & Wills (1927), 1 K.B. 246. .z Household Insurance Co. v. Grant (1879), 4 Ex. D. 216; -& L.J.Ex.577;41L.T. 298; 27 W.R.858....... Howard's Case, Re Leeds Banking Co. (1866), 1 Ch. App. 56 36 L. J. Ch. 42;14L.T. 742; 14 W. R. qo? Hoylake Railway Co., Re (1874), 9 Ch. App. <7; 43 L. J. ¢ 529; 30L.T.213;22W.R. 443.......... Hudson v. Granger (1821), 5 B. & Ad. 27.... . Hughes-Hallett v. Indian Mammoth Mines /*R82" 561; 52 L. J.Ch. 418; 48 L. T. 107; 31 W.R.z Huntley & Palmer v. Reading Biscuit Co. (1893), o T.L. k. 3 [llingwor-‘ouldsworth (1904), A.C. 355; 73 L. T. 602; 53 W. R. 113; 12 Mans. 141; syd 24 867 AGE 275 3 14% 162 0 Uy 368 SECRETARIAL PRACTICE Imperial Bank of China (1866), 1 Ch. App. 339.............. [mperial Mercantile Association, Re, Richardson’s Case (x875), 19 Eq. 588; 44 L. J. Ch. 252; 38 L. T. 18; 23 W. R. 467 [ndo-China Steam Navigation Co., Re (1917), 2 Ch. 100: 86 L.J.Ch. 723; 117 L. T. 212.... chee [redale v. General Securities Corporation (1916), 33 T.L. R. 67 [reland v. Hart (1902), 1 Ch. 522; 71 L. J. Ch. 276; 86 L. T. 385; 50 W. R. 315; 9g Mans. 209; 18 T. L. R. 253...... [reland v. Livingstone (1872), 5 H.L. 3095. .... eh KEE, [rish Club Co., Re (1906), W. N. 7 [rrigation Co. of France, Re (1871), 6 Ch. App. 176. . cen [saacs v. Chapman (1916), 32 T.L. R. 237. .........u....... [sle of Wight Railway Co. v. Tahourdin (1884), 25 Ch. D. 320; 53L.J.Ch.353;50L.T. 132; 32 W. R. 207... Ce PAGE 217 56 100 118 81 276 4 214 139 123 Jacobs v. Morris (1902), 1 Ch. 816. . “inns Jackson v. Turquand (1869), L. R. 4 H.L. 305; 39 L. J. Ch. 11 James v. Rockwood Colliery Co. (1912), 106 L. T. 128: 56 Sol. Jo. 292; 28 T. L. R. 215.... ... cere Jewish Colonial Trust, Re (1908), 2 Ch. 287; 77 L. J. Ch. 629; 99 L. T. 243; 15 Mans. 279; 24 T.L. R. 505. ......... John Brown & Co., Re (1914), 84 L. J. Ch. 245.. SURE Johns v. Balfour (1889), 1 Meg. 191. . . Se wemgnys Johnson wv. Lyttle’s Iron Agency (1877), 5 Ch. D. 687; 46 L.]J. Ch. 786; 36 L. T. 528,25 W.R.548............ Johnston Foreign Patents, Re (1904), 2 Ch. 234; 73 L. J. Ch. 617; 91 L.T. 124; 53 W.R. 189. ....coovuu..... Jones v. Pacaya Rubber Co. (1911), 1 K.B. 455; 80 L. J. K.B. 155; 104 L. T. 446; 18 Mans. 139... sees Jonmenjoy Coondoo v. Watson (1884), 9 A.C. 56T.......... Joseph v. Sonora (Mexico) Land (1918), 34 T. L. R. 220...... Jubilee Cotton Mills (1924), A.C. 958: 40 T.L.R. 621........ 275 57 147 I9 18 16 94 104 94 275 146 48 Kaye v. Croydon Tramways Co. (1898), 1 Ch. 358; 67 L. J. Ch. 222; 78 L. T. 237; 46 W. R. 405; 14 T. L. R. ZY ess venns bruni hvns sie wu. ter eeereses 125,224 Keatinge v. Paringa Consolidated Mines (1902), W. N. 15; IB T. L.R. 266... iiniieie iin viiinnnnnn. Keighley Maxsted & Co. v. Durant (1901), A.C. 24; 70 L. J. KB.662;84L.T. 777; 17 T.L. T. 527. eevee... Kelantan Coco Nut Estates (1920), W. N. 274. ............. Kidner’s Agreement, Re (1929), 2 Ch. 121... .. 3% he mmmEN Kingsbury Collieries, Re (1907), 2 Ch. 259; 76 L. J. Ch. 469; 96 L. T. 829; 14 Mans. 212; 23 T.L. R. 497.......... Kingston, Miller & Co. v. Thomas Kingston & Co. (1912), 1 Ch. 575; 28 T. L. R. 246; 56 Sol. Jo. 310..... ea Knights Deep v. Inland Revenue (1900), 1 Q.B. 217; 69 L. J. Q.B.66;81L.T.625; 41 W.R.198;16 T.L. R.68.... Knowles v. Scott (1891), 1 Ch. 717......... «cut vvrnnn.. Kreditbank Cassel v. Schness. Ltd. (1927), 1 K.B.826........ 13 62 3 239 152 TABLE OF CASES 869 PAGE Lamb v. Sambas Rubber Co. (1908), 1 Ch. 845; 77 L. J. Ch. 386; 98 L. T. 633; 15Mans. 189. ....ccvvvnrennnnnnnn Lambert v. Neuchatel Asphalte Co. (1882), 51 L. J. Ch. 882; 47L.T.73;30 W.R.913.......... Lancaster, Re (1877), 5 Ch. D. 9IT.... civ rinnenr cernnn. Land Credit Company of Ireland, Re (1869), 4 Ch. App. 469; 39L. J.Ch.27;20L.T. 641; 17 W.R.689.......... Lands Allotment Co., Re (1894), 1 Ch. 616; 63 L. J. Ch. 291; 70 L. T. 286; 42 W. R. 404; 7 R. 115; 1 Mans. 107... . Laxon & Co., Re (1892), 3 Ch. 555.000 vienenrenennnens Lee v. Neuchatel Asphalte Co. (1889), 41 Ch. D. 1; 58 L. | Ch. 408;61L.T. 11; 37 W. R. 321; 1 Meg. 140........ Leeds Banking Co., Re, Howard's Case (1866), 1 Ch. App. 561; 36 L. J.Ch. 42; 14 L. T. 747; 14 W.R. 942...... .. Lemon v. Austin Friars Investment Trust (1925), 41 T. L. 1 629 . bE Letheby & Christopher, Re (1904), 1 Ch. 815; 73 L. 1. {_ 90 L. L. 77 ; 52 W. R. 460; 11 Mans. 200 Levita’s Case, kv International Contract Co. (1.. App. 36; 17 L. T. 337; 16 W. R. 95. Levy v. Abercorris Slate Co. (1888), 37 Ch. Ib. 283; Ch. 202; 58 L. T. 218; 36 W. R. 411..... 194 Lewis & Lewis v. Inland Revenue (1898), 2 Q.B. 29o........ 353 Lewis Merthyr Consolidated Collieries, Re (1929), 1 Ch. 498. .206, 261 Licensed Victuallers’ Association, Re (1889), 42 Ch. D. 1; 58 LL. J. Ch. 467; 60 L. T. 684737 W. R. 674; 1 Meg. 18: Liggett (Liverpool) v. Barclays Bank (1928), 1 K.B. 48 . Liverpool Marine Insurance Co. v. Haughton (1874, W.R.93......... Lloyd v. Grace, Smith & Co. (1912), . Lock v. Queensland Mortgage Co. (1: Ch. 798; 75 L. T. 3; 45 W. R. oy. London and Counties Assets v. Brighten =~ 2 K.B. 493; 84L. J. K.B.g91; 1 London Financial Association v. Kelk (1884 26 Cn. 53L.J.Ch.1025;50L.T. 492... vuueunnunn oo. London Founders’ Association v. Clarke (1888), 20 Q.B.C 576; 57 L. J. Q.B. 291; 59 L. T. 93; 36 W.R. 489...... London and Northern Bank, Re, ex p. Jones (1900), 1 Ch. 220; 69 L. J. Ch. 24; 81 L. T. 512; 7 Mans. 60... ’ London and Northern Bank, Re, M<Connell’s Case (1901). 1 Ch. 728; 70L. J.Ch.2<.:¢ . =: 8 Mans. 17 TL. R. 188.... London and Northern Steams’ 204; 58 S. J. 504. London and Provincial Ce>. 46 L. J. Ch. 842; 36L." London and Southern Countie . 223;55L. J.Ch. 224; 541. } London and South-Western Canal Co, Re (1. BoL. " Ch.234;104 . T qs: 18 Mans. 94 89 9 PE R70. SECRETARIAL PRACTICE London and Westminster Bank v. Inland Revenue Commissioners (1900), 1 Q.B. 166; 69 L. J. Q.B. 102; 81 L. T. 630; 48 W.R. 195.......... I dE mheae snares ny Longman v. Bath Electric Tramways (1905), 1 Ch. 646; 74 L.J.Ch. 424;92L.T. 743; 53 W. R. 480; 12 Mans. 147; 3 Sl DR OR Ls Loring v. Davis (1886), 32 Ch. D. 625; 55 L. J. Ch. 725; 54 L.T.89;34 W.R.701.......... smi ny Lovering, ex p. (1874), 9 Ch. App. 586. .....ccvivvvunnnn.. Lubbock v. British Bank of South America (1892), 2 Ch. 198; 61 L. J.Ch. 498; 67 L.T. 74; 41 W.R. 103.......... Lumsden’s Case (1868), 4 Ch. App. 31; 19 L. T. 437; 17 W. R. Lyons v. Tramways Syndicate (1906), 2 Ch. 216; 75 L. J. Ch. 534; 94 L.T.815; 54 W.R.535:22T.L. R. 533...... PAGE 55 42 81 244 190 57 363 McCall v. Australian Meat Co. (1870), 19 W. R. 188........ MacConnell v. Prill & Co. (1916), 2 Ch. 57; 85 L. J. Ch. 674; 115 L.T. 71; 60S. J. 556; 32 T. L.. R. 50q. Ce Mackenzie & Co., Re (1916), 2 Ch. 450. .....ccvvviurnnnn.. Mackereth v. Wigan Coal Co. (1916), 2 Ch. 293; 85 L. J. Ch. 6o1;115L.T. 107;32 T.L.R. 521... cv vviinninn McLaren v. Thompson (1917), 2 Ch. 261; 86 L. J. Ch. 713; 117 L.T. 417;615. J.576; 33 T.L.R. 463.......... MacMillan v. Le Roi Mining Co. (1906), 1 Ch. 331; 75 L. J. Ch. 174; 94 L. T. 160; 54 W. R. 281; 13 Mans. 65; 22 T.L. R. 186....... “vn Madras Irrigation Co., Re (1881), W.N. 120, I72.....0vuvnn. Mahony v. East Holyford Co. (1874), L. R. 7 H.L. 869; 33 L.T.338: LR. GC. 1a806:.: sons ronsnrmanunssnns Magadi Soda Company, Re (1925), W. N. 50; 94 L. J. Ch. 217.. Marine Mutual Insurance v. Young, 43 L. T. 441............ Marino's Case (1867), 2 Ch. App. 596; 36 L. J. Ch. 468; 16 L.T. 368; 15 W. R.683....00iiiiiiiiiiiiinnnnnn Markwick v. Hardingham (1880), 15 Ch. D. 339; 43 L. T. 647; Marshall's Valve Gear Co. v. Manning, Wardle & Co. (1909), 1 Ch. 267; 78 L. J. Ch. 46; 100 L.. T. 65; 15 Mans. 379; 25 TT. L.R. 69... iuitiiriiiniiiieiennennennannenens Mason v. Motor Traction Co. (1905), 1 Ch. 419; 74 L. J. Ch. 273; 021. T. 234; 21T.L.R. 238...........0v..t. Masonic Assurance Co. v. Sharpe (1892), 1 Ch. 154; 61 L. J. Ch. 193; 65 L. T. 806; 40 W. R. 24I.. CHEB E he Maynard v. Consolidated Kent Collieries (1903), 2 K.B. 121; 72 L. J. K.B. 681; 88 L. T. 676; 52 W. R. 117; I0 Mans. 386; 19 T. L. R. 448......... ee...78, 376 Mears v. West Canada Pulp Co. (1905), 2 Ch. 353; 74 L. J. Ch. 581; 93 L. T. 150; 12 Mans. 295; 21 T. L. R. 661.. 46 Melhado v. Porto Alegre Railway Co. (1874), L. R. a C.P. 503; 43L.J.CP.253;31 L.T.57;23W.R. 57... . ...... 25 283 126 121 64 138 138 141 145 139 369 70 282 TABLE OF CASES Mercantile Investment Trust v. International Co. of Mexico (1893), 1Ch. 484 (#); 68 L.T.603 (#)...cevvuvenun... Metal Constituents, Re, Lord Lurgan’s Case (1902), 1 Ch. 707; 71 L. J. Ch. 323; 86 L.T. 291; 50 W.R. 492.......... Metropolitan Coal Association v. Scrimgeour (1895), 2 Q.B. 604; 65 L. J. Q.B. 22; 73 L. T. 137; 44 W. R. 35; 2 Mans. 579; 14 R. 720. . wih Mexican & South Americar. « + }- De Pass’s Case (1859), 4 De G. & J. 544 Cu. 766; 5 Jur. (N.S.) 1191; 7 W. R. 681.... ; eee ’ Midland Counties Bank v. Atwo- tC. 357; 74 L. Ch. 286;92L.T. 360; 21 I" Midland Railway v. Att.-General Moller v. Maclean (1889), 1 Meg. 274 Molyneux v. Natal Land, etc., Co. (1905), A.C. 555......... Moore v. N. W. Bank (1891), 2 Ch. 599; 60 L. J. Ch. 627; 64L.T. 456; 40 W.R.093........ Cease Moriarty v. Regents Garage & Engineering Co. (1921), 2 K.B. 766; go L. J. K.B. 783; 2 IT T. 560; 65S. © -74, 37 TT. L: R. 53%00u sen Morrice v. Aylmer (1875), L. k. i. L. 7.7; 45 L. J. Ch. 614, 34 L. T. 218; 24 W. R. 5-7. Ca ® EEE hes Morris v. Cannan (1862), 31 L. j. Ch. 425; 6 L. T. 521; 8 Jur. (N.S.) 653; 10 W. R. 589. Cee ereeee ea. Mortgage Insurance Corporation v. Inland Revenue, 21 Q.B.D. 352; 57 L. J. Q.B. 630 Bn BEA REEL mas tn Mosely v. Koffyfontein Mines * Ch. 108; 73 L. J. Ch. 569; 91 L. T. 26F- - ~40; II Mans. 294; 20 T. L. R. 5c FEET REE REE mann — (1910), 2 Cn. versed 1191"), 1 Ch. 73; affirmed 1911), A.C. 409, c . Cn. 668; 105 L. T. 115; 55 Sol. Jo. 551; 7... ix. 501... . Mount Lyell Mining v. Inland Revenue (1905), 1 K.}.. iv; 74L. J. K.B. 4;92L.T. 134; 53 W. R. 225; 21 I. L. R. Muir v. City of Glasgow Bank (1879), 4 A.C. 337; 40 L. T. 339; 27 W. R. 603. TILT Murray v. Bush (1872), L. R. 6; H.L.37.....ccov..... Mutter v. Eastern and Midlands Railway (1888), 38 Ch. D. gz; 57 L. J. Ch. 615; 50 L. T. 117; 36 W. R. 40I...... 10 Mutual Provident Land v. Macmillan (1889). A.C. 506. .... Nanney v. Morgan (r&? Nash v. Lynde (-Nassau Steam P 1 Mans. National Pank TTA. 58z... Nationa! Dwellings Society t. sykes (18g .Ch. 906: 42 W. R. 606° 1 Mans . , a 4 B71 PAGE "3a Q ) 233 355 144 273 21 1 27 70 70 . 0) R72 SECRETARIAL PRACTICE PAGE National Motor Mail Coach Co., Re (1908), 2 Ch. 228; 77 L.J.Ch.796;099L.T.334........ PII 49 Neal v. Quinn (1916), W. N.223............ cee 151 Nell v. Atlanta Gold Co. (1895), 11 T.L. R. 407............ 146 Nelson v. Anglo-American Land Co. (1897), 1 Ch. 130; 69 L.J.Ch.112;75L.T. 482; 45 W.R. 171............ 203 Neuschild ». British Equatorial Co., Ltd. (1925), 1 Ch. 346.... 140 New Balkis Eersteling v. Randt Gold Co. (1904), A.C. 165; 73 L. J. K.B. 384; 90 L. T. 494; 52 W. R. 561; 11 Mans. 150; 20 T.L.R. 3096. citi iiiii iii tiie 94 Newhaven Local Board.v. Newhaven School Board (1885), 30Ch.D.350;53L.T.571;34 W.R. 172... ......... 151 Newspaper Proprietary Syndicate, Re (1900), 2 Ch. 349; 69 I..J. Ch. 578; 83 L. T. 341; 16 T. L. R. 452...... 26I, 290 New’s Trustees v. Hunting (1897),2Q.B.27................ 248 Newton ». Birmingham Small*Arms Co. (1906), 2 Ch. 378; 75 L. J. Ch. 627; 95 L. T. 135; 54 W. R. 621; 13 Mans. 267; 22 TT, Li. R.GBgsvuvioveviivnvncinunpocnnns srs 185 New York Taxicab Co., Re (1913), 1 Ch. 1; 82 L. J. Ch. 41; 107 L.T.813;57S.J.98......... Cee 195 New Zealand Gold Extraction Co. v. Peacock (1894), 1 Q.B. 622 211 Nicol’s Case (1885), 29 Ch. D. 421; 52 L. T. 933; 1 T. L. R. 221 56 Nixon v. Albion Marine Insurance Co. (1867), L. R. 2 Ex. 338 369 Nordberg, J. A., Re (1915), 2 Ch. 439; 84 L. J. Ch. 830; 59S. J. Normandy v. Ind, Coope & Co. (1908), 1 Ch. 84; 77 L. J. Ch. 82;97L.T. 872; 15 Mans. 65; 24 T.L. R. 57...... 124, 290 North Australian Co., Re, Archer’s Case (1892), 1 Ch. 322; 61 L.J.Ch.129;65L.T. 800; 40 W.R. 212... ......... 145 North Cheshire Brewery Co., Re (1920), W.N. 149.......... 32 North-Eastern Insurance Co., Re (1919), 1 Ch. 198; 88 L. J. Ch. 121; 121 L. T. 223; 63 S. J. 117.. ieee... I5I North-West Transportation Co. v. Beatty (1887), 12 A.C. 589; 56L.J.P.C.102;57L.T. 426;36 W.R.647........ 135, 142 North-Western Ry. Co. v. McMichael, 5 Exch. 114.......... 108 Oakbank Oil Co. v. Crum (1883), 8 A.C. 65; 48L.T.537...... 187 O’Kane v. Mullan (1925), Northern Ireland L. R. 1........... 277 Oliver v. Bank of England (1902), 1 Ch. 610; 71 L. J. Ch. 388; 86 L. T. 248; 50 W. R. 340; 7 Com. Cas. 80; 18 T. L. R. 34 ceiinnnnn sevuvss 286 Olympic Reinsurance Co., Re (1920), 2 Ch. 341... cee. 284 Omnium Electric Palaces v. Baines (1914), 1 Ch. 332........ 21 Ooregum Gold Co. v. Roper (1892), A.C. 125: 61 L. T. Ch. 337; 66 LL. T. 427; 41 W. R. go. . ...95, 97 Oriental Bank, Re (1885),28 Ch. D, 634... cove veuennn.. 283 Ortigosa v. Brown, Janson & Co. (1878), 47 L. TJ. Ch. 168; 33 1. TT. T45-cv++ . ewesabinws » JO Otto Electrical Manufacturing Co., Re (1906), 2 Ch. 390; 75L. J. Ch. 682; 95 L.T. 601: 13 Mans. 301:22 T.L. R. 678... RP 873 PAGE Ottos Kopje Mines, Re (1893), 1 Ch. 618; 62 L. J. Ch. 166; 63 L.T. 135; AT W. R. 258. . evens nvnvnnsnsrrnsnnis ==, 82 Overweg, Re, Haas v. Durant (1900), 1 Ch. 209; 6g L. 1, Ch 255; 81 L. T. 776..... © eae Owen v. Cronk (1895), 1 Q.B. 265; 62 7.. 1. Q.B. 288. . Oxford Building Society, Re "~"°7 “h. D. 502; 56 L.. Ch.98;55L. T. 598: W. ie. iI0.c.tiiiinnnnnnnnn. 188 Oxted Motor Co. (1921) 3 K.u. 3 ....I27,158 TABLE OF CASES Panhard et Levassor v. Panhard Levassor Motor Co. (1901), 2 Ch. 513; 70 L. J. Ch. 738; 85 L. T. 20; 50 W. R. 74.. Parent Tyre Co., Re (1923), 2 Ch. 222.......... ..cuon.... Park v. Lawton (1911), 1 K.B. 588; 80 L. J. K.B. 396; 104 L.T. 184; 75]. P. 163; 18 Mans. 151; 2» T. \.. R. 192 Park v. Royalties Syndicate (1912), 1 K.B. 330: 81 L. J. K.B.313;106 L.T. 115; 19 Mans. 97; 767 '- a=.. ‘ Parker & Cooper, Ltd. v. Reading (1926), Ch. ¢7 Parkes Garage (Swadlingcote), Re (1929), 1 Ch. 139. Parson’s Case, L.R. 8 Eq. 656. . Parsons v. Middleton, 6 Hare 261. . .......... . .. .. _ Patent File Co., Re (1870), 6 Ch. App. 83; 40 L. J. Ch. 190; IW. RL I03.. citi iii iii ie iii ie Patent Invert Sugar Co., Re (1886), 31 Ch. D. 166; 55 L. J. Ch. 924; 53 L. T. 698; 34 W. R. 169..... . Paterson, R., & Sons v. Paterson (1916), W.N. 352. ....... . Pavilion, Newcastle-on-Tyne, Ltd., Re (1911), W. N. 235.... Payne v. Cork Co. (1900), 1 Ch. 308; 69 L. J. Ch. 156; &z L.T. 44; 48 W. R. 325; 7 Mans. 225.. . Pearks v. Richardson (1902), 1 K.B. 91; 71 L. J. K.&, 18; 85L.T.616;661.P.129; 50 W.R. 286; 18 T.L. R. 72" 20 Cox C. C. g6... | sinew se Pedlar v. Road Block Gold Mines (1905), 2 Ch. 427; 74 L. ]. Ch. 753; 54 W.R. 4. .s “ew Peel v. London & North-Western Railwa+ Co. (1907), 1 Ch. s-76 L. J. Ch. 152; a5 L. §. 897; 14 Mans. 30; 23 T. L. R. Pender v. Lushineton (*$7~), ACh. D. 70; 46 L. J. Ch. 317... Penney, ex 4., Re Gresham Iife Assurance Society (1873), & Ch. App. 446; ¢z ».. .Ch. 183; 28 L.T. 150; 21 W. R. Pennington & Owen, Ltd., Re (1025), 41 T.L.R. 657...... . Perry v. Barnett (188s), 15 O.B.D. 388; 54 L. J. Q.B. .€ 53 L. T. 585.... F Peveril Gold Mines, Re (1898), v Cn 122; 67° 77 L. T. 505; 46 W. R. 19¢ _, 'v'~ns. =¢ Phosphate of Lime Co., Re, Austin’s Cas. Piercy v. S. Mills & Co. (1920), - C'.. ©; 3° T. L. R. 502... Pool Shipping Co., Re (1920), 1 Ch. 2,1, 26 T. L. i. Poole v. National Bank of China (1907), A.C. 22a. . I Ig [04 288 [27 252 [06 363 [93 35 21 L2C i Ly, 374 SECRETARIAL PRACTICE PAGE Portuguese Copper Mines, Re, Badman’s and Bosanquet’s Cases (1890), 45 Ch. D. 16; 63 L. T. 423; 30 W. R. 25; 2 Meg. 249....... + cxmurrrens re e306, 152 —— Re, Steele’s Case (1889), 42 Ch. D. 160; 58 L. J. Ch.813;62L.T.88;1Meg.246...c00vveeenrennnnnn 151 Princess of Reuss v. Bos (1871), L. R. 5 H.L. 176; 40 L. J. Ch. B55; 24 Ln Ti BT rvunnrnvn~ -sniinsanssronsis 8 Prosser v. Bank of England (1872), L. R. 13 Eq. 611........ 286 Prudential Insurance v. Inland Revenue (1904), 2 K.B. 658; 73L. J. K.B.734;91L.T. 520; 33 W.R. 108; 20 T.L.R. B2E wus rnnnt ruta te SRE LURE At BE BE REEL? NURE $5 371 Puddephatt v. Leith (1916), 1 Ch. 200; 85 L. J. Ch. 185; 114 L.T.454;60S8.J.210;32T.L.R.228......c00...... 137 Pulbrook v. Richmond Consolidated Mining Co. (1878), 9 Ch. D. 610; 48 L. J. Ch. 65; 27 W. R. 377....143, 148, 152 Pulsford v. Devenish (1903), 2 Ch. 625; 73 L. J. Ch. 35; 52 W.R.73;10T.L. R. 688.. ceee. 230 Quin & Axtens v. Salmon (1909), A.C. 442; 78 L. J. Ch. 506; 100 L.T. 820; 53 Sol. Jo. 575; 16 Mans. 230: 25 T.L. R. 590 23, 164 R. v. Catholic Assurance Institution (1883), 48 L. T. 675; 47 J: Pi B03: covuvinnvnsrnaniisnunainnnnssnnanss 104 Hampstead Borough Council, ex p. Woodward, THE SECRETARY, IQI7, P. 68... iii iiienrnreennnneane 337 Londonderry Railway Co. (1849), 13 Q.B. 998; 18 L. J. Q.B. 343; 6 Rail. Cas. 1; 13 Jur. 939. ....covvvvnenn. 92 Midland Counties & Shannon Ry. Co. (1862), 15 Irish CLR. 554: 6L.T. BR, NB, 1585.ccascsvunssnnvnss Registrar of Companies (1912), 3 K.B. 23; 107 L. T. 62 Registrar of Companies; ex p. Bowen (1914), 3 K.B. 1161; 84 L. J. K.B. 229; 112 L. T. 38; 30 T. L. R. 707 — v. Registrar of Companies; ex p. Platt (1906), unreported — ov. Registrar of Companies (1888), 21 Q.B.D. 131........ — v. Tyler (1891), 2 Q.B. 588; 61 L. J. M.C. 38: 60 L. T. 662; 56 J.P. 118 ......... LL. cand amenas hREEe eh — v. Wait (1823), 1 Bingh. 121; 11 Price 518.... ......... — v. Wimbledon Local Board (1882), 8 Q.B.D. 459; 51 L. J. Q.B.219; 46 L. T. 47; 30 W. R. 400. ..c.civvrvnennn Radium Springs v. How (1929), unreported................ Railway Sleepers Supply Co., Re (1885), 29 Ch. D. 204; 54 L.J.Ch.720;52L.T. 731; 33 W.R. 595. ..c.c00vcvnn Railway Time-Tables Publishing Co., Re, ex p. Sandys (1889), 42 Ch. D. 98; 58 L.. J. Ch. 504; 61 L. T. 94; 37 W. R. 53I; I Meg. 208....... . eee 40 Ramsgate Hotel v. Montefiore (1865), 4 H. & C. 164; 45 L. J. Ex.90; 12 Jur. (N.S.) 455; 13 L. T. 715; 14 W. R. 335... 56 Randt Gold Mining Co. v. Wainwright (1901), 1 Ch. 184; 70 29L.J.Ch.9o; 84 L.T. 348; 8 Mans. 61; 17 T.L.R. 82,94, 136 — Re (1904), 2 Ch. 468; 73 L. J. Ch. 508; or L. T. 174; 52 W. R.00:20T. L. R. 619... cee 94 875 PAGE Reckitt v. Barnett, Pembroke & Slater, Ltd. (1929), A.C. 176. .274, 285 Reid v. Allan, 19 L. J. Exch. 39......... em 369 Reid’s Case, 24 Beav.318.......... . .. sheer semua 106 Reigate v. Union Manufacturing Co. (1918), 1 K.B. 592; {=L.J. K.B. 724; 118 L. T. 479... . -- : Republic of Bolivia Exploration Syndicate (1914), 1 Cn. 420: 83L.J.Ch.235;110Y..T 147;88% -2°;~5T I46 ........ Reversionary Interest Society v. Inland Revenue, 22 1.L. R 2. 12 JP Richards v. Kidderminster Overseers (1896), 2 Ch. 212; 65 L.]J.Ch.502;74L.T. 483; 44 W. R. 505; 4 Mans. 169. . Richardson, Re (1880), 16 Ch. D. 613....... « wwe mu Richmond Hill Hotel Co., Re, Elkington’s Case (1867), 2 Ch. App. 511; 36 L. J. Ch. 593; 16 L. T. 301; 15 W. R. 665 Roberts, ex p. (1852), 1 Drew. 204......... : tv whey Rothschild v. Inland Revenue (1894), 2 Q.B. 142; 70 L. T. 667; 42 W. R. 542. CARRE AER RRRA REG REESE beh Rowell v. John Rowell & Sons (1912), 2 Ch. 609; 56 Sol. Jo. 704 Cesare 5 ore Rowell & Sons v. Commissioners of Inland Revenue (1807), 2Q0.B. 194... iii, Royal Bank of Scotland v. Tottenham /18&-Royal British Bank v. Turquand (18g: L. J. Q.B. 327; 1 Jur. (N.S.) 1086. Roval Exchange Assurance v. Sjofarsakrings (1001, TABLE OF CASES Sadgrove v. Bryden (1907), 1 Ch. 318; 76 L. L.T. 361; 14 Mans. 47; 23 T. L. R. 25 Salisbury Gold Mining Co. v. Hathorn (1897), L.J.P.C.62; 76 L. T. 212; 45 W. R. 501 Salomon v. Salomon & Co. (1897), A.C. 22; 66 L. 751... T. 426; 45 W. R. 193; 4 Mans. 89.... Salton v. New Beeston Cycle Co. (1899), 1 Ch. 775; 68 Ch.27¢ 3%, T 521;47 W.R. 462; 6 Mans. 238...... v (1900), 1 Ch. 43; 69 L. J. Ch. 20; 81 L.T.g W.R. 92; 7Mans. 74; 16 T. L. R. 25.... Sandwell Park Colliery Co. (1914), 1 Ch. 589; 83 L.. T. Ch. 549; 11oL. 7.766; 58S. J. 432... ... .... 2s Sanitary Carbon <o, Re (1877), W. N. 222.... .. . .. . Saunders "°° Co., Re (1908), 1 Ch. 415; 77 L. J. Ch. 289; gx | 5; 15 Mans. 142; 52 Sol. Jo. 225; 24 T.L. R. 263 . - Sawtell v. Loudon, zx Taunt. 358....... ..... ... Scadding v. Lorant / * 3 H.L.C. 418; 15 Jur. 955.. Schweppes, Re /1. C7 Severn Railw~-" . Sharp » Naw Or RK 23 4 28 70 WW. ho 876 SECRETARIAL PRACTICE Shaw v. Tati Concessions (1913), 1 Ch. 292; 83 L. J. Ch. 296; 110 L. T. 246; 58S. J. 185; 30 T.L. R. 201. ......... Sheffield Corporation v. Barclay (1905), A.C. 392; 74 L. J. K.B. 747; 93 L. T. 83; 54 W. R. 49; 69 J. P. 385; 12 Mans. 248; 21 T. L. R. 642....... c eeeieeee.. 286 Sheldrick v. South African Breweries (1923), 1 K.B. 173; 92L. J. K.B.112;39T.L.R.26;67S.].95.......... 327 Shorts v. Colwill (1909), 101 L. T. 598. ....u... . .©©ovou.... 97 Shropshire Union Railways v. The Queen (1876) L. R. 7 H.L. 496; 45L.J.Q.B.31;32L. T. 283; 23 W. R. 709. ..... 43 Shuttleworth v. Cox Rros. & Co. (Maidenhead) (1927), 2 KB. g.eiviviieen. Cee ceeve... 28,29 Sidebottom v. Kershaw Leese & Co. (1920), 1 Ch. 254; 36 Lo Ls Re ena ttn tnnnnsrrnnmstonnsssssmnnnmnnn ve 29 Siemens Brothers v. Burns (1918), 2 Ch. 324; 87 L. J. Ch. 572; FLO Vo | 350 ccnnn rs anan s apumstmmuno pucrss wane ss 137 Simpson v. Palace Theatre (1893), 69 L. T. 70; 2 R. 45% 0aaies 38 ———— v. Westminster Palace Hotel (1860), 8 H.L.C. 712; 2 L.T. 707; 6 Jur. (N.S) 085........... cers 16 Sissons & Co. v. Sissons (1910), 54 Sol. Jo. 802.............. 147 Skinner v. City of London Insurance Corporation (1885), 14 Q.B.D.882;53 L.T.191;33 W.R.628............... 69, 82 Sly, Spink & Co., Re (1911), 2 Ch. 430; 81 L. J. Ch. 55; 105 L.T.364..ccciieiinnnn. + sassemunsrunss 150 Smedley v. Registrar of Companies (1919), 1 K.B. 97; 88 L. J. K.B.345;120L.T.277;35 TL. R. 92... vu... 131 Smyth v. Darley (1849), 2 H.L.C. 789..... Ceeee... I22, 123 Sneath v. Valley Gold (1893), 1 Ch. 477; 68 L. T. 602; 2 R. 292 195 Société Générale v. Walker (1886), 11 A.C. 20; 55 L. J. Q.B. 169; 54 L.T. 389; 34 W.R.662...................... 64, 81 Southampton Steamboat Co., Re (1864), 4 De G. J. & S. 200; 33 L. J. Bk. 49; 10 Jur. (N.S.) 188; 9 L. T. 669; 12 W.R. Southern Brazilian Railway Co., Re (1905), 2 Ch. 78; 74 L. J. Ch. 392; 92 L. T. 598; 53 W. R. 489; 12 Mans. 323; RET. Li Ro 458: cuvntane steanne r cournsnsssnnmmns South-Western of Venezuela Railway, Re (1902), 1 Ch. 701; 71 L. J. Ch. 407; 86 L. T. 321; 50 W. R. 400; 9 Mans. Spackman v. Evans (1868), L. R. 3 H.L. 171; 37 L. J. Ch. 752; 19 L. T. 151. Ceres Spanish Prospecting Co., Re (10 +, 1 Ch. 92; 80 L. J. Ch. 210; 103 L. T. 609; 55 Soi. Jo. 63; 18 Mans. 191; 27T.L.R.76........... seeunnisen 188 Sparks v. Liverpool Waterworks Co. (1807), 13 Ves. 428...... 94 Spencer v. Ashworth, Partington & Co. (1925), 1 K.B. 589.... 82 Speyer Bros. v. Inland Revenue (1908), A.C. 92; 77 L. J. K.B. 302; 98 L. T. 286; 24 T. L. R. 257; 52 S. J. 222 ..352, 362 Stacey v. Wallis (1912), 106 L. T. 541; 28 T.L. R. 2009. ....... 14 Staffordshire Gas Co., Re (1892), 66 1.. T. 4113. . teases I4A6 TABLE OF CASES Standard Manufacturing Co., Re (1891), 1 Ch. 627; 60 L. J Ch. 292; 64 L. T. 487; 30 W. R. 369; 2 Meg. 418...... Stanfield v. Gibbon (1925), W. N. 11........ Cee Stanton, F. E., Ltd., Re (1929), 1 Ch. 180..... ..... ...... Staples v. Eastman Photographic Materials Co. (1896), 2 Cii. 303; 65L. J.Ch. 682; 74 L.T. 479.. Starkey v. Bank of England (1903), A.C. 137-72 L.. ].( 88L.T.244;51 W.R. 513; 8Com. Cas. 42:1 BIZ evn ionnn ines sume Star Steam Laundry v. Dukas (1913), tex 390; 29 T.L. R. 269........ State of Wyoming Svndicate, Re (1901), 2 L . 4° ae Ch. 727;84L.T. 868; 49W.R.650 I... K.631..1, Steinberg v. Scala (Leeds) (1923), 2 Ch. 4- Cee Stephens v. Mysore Reefs (1902), 1 Ch. 745; 71 L. J. Ch. 295, 36 1. TT: 221; 50 WR. 53000su vent runnronnsoun suns Stewart v. Fletcher (1888) 38 C.D. 627.......ccivviivinnnn Stocken’s Case, Re Blakeley Ordnance Co. (1868), 3 Ch. App. 412;37L. J. Ch. 230; 17L.T. 554; 16 W. R. 322.. Stranton Iron Co., Re (1873), 16 Eq. 559; 43 L. J. Ch. 215. Strapp v. Bull (1895), 2 Ch. 1; 64 L. J. Ch. 658; 72 L. T. 51. 43 W. R. 641. Coe . Ce Studdert v. Grosvenor /- 886), 33 Ch. D. 528; 55 L. J. Ch. €!f 55 L.T. 171; 34 W.K.754;50 J.P. 710....... ... Sunlight Incandescent Gas Lamp Co., Re (1900), 2 Ch. 72 69 L.J.Ch.873;83L.T. 406... . Cee ae Sutton v. English & Colonial Produce Co. (1902), 2 Ch. 502; 71 L. J. Ch. 685; 87 L. T. 438; so W. R. 571; 10 Mans. 101; 18 T.L. R 6:%.. vu. i reine Sweney v. Smith (1869), 7 Eq. 5.4; 38L. J. Ch. 446.......... Symon’s Case, L.. R. s Ch. 298. . Tahiti Cotton Co., Re, ex 43 L. J. Ch. 425; 22 Taplin v. Florence (1851), 15 Jur. 402...... Taurine Co., Re (1884), 2 LT 514;32W.R Tavistock Ironworks Co., R¢ ‘.yster 233; 36 L. J. Ch. 616; 10). T 824, Tayler v. Great Indian Peninsula Railwe: G. & J. 559; 23 L. ,. Cu 709; 7 W. R. 637.. . ... IT'exas Land & Cattle Co. v. Inland Revenue, 16 ! Texas Land & Mortgage Co. v. Holtham (18n;, Thairlwall v. Gt. North. Ry. Co. (1910), - K.b. § Thomas v. United Butter Comnanies of France aa ar © i ro L.T. 388 82 vw eww Tiessen 1.889), « Ch. 861: 68 L. j. Cu Re WR. 450: 6 Mans. 840. . © Sareent (1874), 17 Eq. 273; CP r--Ci. 271; 24 fr ir Qa En 9), 4 De N.S.) 1087; th IE 877 PAGE 199 207 252 IC vi 94 "35 2C7 z Qa 105 Cn O 878 SECRETARIAL PRACTICE PAGE Torbock v. Lord Westbury (1902), 2 Ch. 871; 71 L. J. Ch. 845;87L. T. 165; 57 W. R. 133. .....iovvvneenn... I24 Trevor v. Whitworth (1887), 12 A.C. 409; 57 L. J. Ch. 28; 57 L. T. 457; 36 W. R. 145..... ....40, 95, 188 Truman’s Case, Re Brewery Assets Corporation (1894), 3 Ch. 272; 63 L. J. Ch. 635; 71 L. T. 328; 43 W. R. 73; 8 R. 508; 1 Mans. 359. ....0c00. ... ceevv... I5, 55 Tussaud v. Tussaud (1890), 44 Ch. D. 678; 59 L. J. Ch. 631; 62 L.T. 633; 38 W. R. 503... . : shmEE Ee 13 T'wycross v. Grant (1877), 2 C.P.D. 469; 46 L. J. C.P. 636; 36 I. T. 812: 25s W. R. 701........ RE 50 Union Hill Silver Co., Re (1870), 22 L. T. 400. . veo vou... 122 Vagliano Anthracite Collieries, Re (1910), W. N. 187; 79 L. J. Ch. 769; 103 L. T. 211; 54 Sol. Jo. 720......c....... 76 Vale of Neath Brewery Co., Re, Lawe’s Case (1852), 1 De G. M.&G. 421;21L.].Ch.688;16 Jur.343............ 123 Vane v. Rigden (1870), L. R. 5Ch. App. 663................ 272 Verner v. General & Commercial Trust (1894), 2 Ch. 239; 63 L. J. Ch. 456; 70 L. T. 516; 1 Mans. 136; 7 R. 170..188, 189 Vine and General Rubber Trust (1913), 108 L. T. 709; 57S. J.610....... 34 Walker v. Bartlett (1856), 18 C. B. 845; 25 L. J. C.P. 263; 2Jur. (NS)B43; 4 W- R.B8....0000ivivnicrnnains 82 ——— v. London Tramways Co. (1879), 12 Ch. D. 705; 49 L.J.Ch.23;28W.R. I63....0viiiiiinnininnnnn. 28 Walker’s Case (1868), 6 Eq. 30; 37 L. J. Ch. 651; 16 W. R. Wall v. London & Northern Assets Corporation (1898), 2 Ch. 469; 67 L. J. Ch. 596; 79 L. T. 249...... .......I34, 163 Webb v. Earle (1875), 20 Eq. 556; 44 L. J. Ch. 608; 24 W. R. 46 38 —————— v. Shropshire Railways Co. (1893), 3 Ch. 307: 63 L. J. Ch. 80; 69L.T. 533; 7R.231..... . www 08 Wegdwood Coal & Iron Co., Re, Anderson’s Case (1878), 7Ch.D. 75; 47L.J.Ch. 273; 37L.T. 560; 26 W. R. 442 27 Welsbach Incandescent Co., Re (1904), 1 Ch. 87; 73 L. J. Ch. 104; 89 L. T. 645; 52 W. R. 327; 11 Mans. 47; 20 T. LL. RR. T2200: iiiittiennnnennnearacanennens 37 Welton v. Saffery (1897), A.C. 299; 66 L. J. Ch. 362; 76 L. T. B05; 45 W. R. 508 cvusnnnnssswsunsvne--sssssr anus 25, 26 Western of Canada Oil Co., Re (1873), L. R. 17 Eq. 1........ 197 Weston’s Case, Re Smith, Knight & Co. (1868), 4 Ch. App. 20; 38L.]J.Ch.49;19L.T. 337; 17W.R.62....... .... Wheatley v. Silkstone Coal Co. (1885), 29 Ch. D. 715; 54 L. J. Ch. 778; 52 L. T. 798; 33 W. R. 797...... cee. 197 Wheeler & Co. v. Warren (1928), Ch. 840.................. 205 Whitley Partners, Re (1886), 32 Ch. D. 337; 55 L. 1. Ch. 540; 54 LL. T. 912: 34 W. R. 505... .. 8, 275 TABLE OF CASES Wilson, ex p., Re Crenver and \Vheal Abraham Unit Mining Co. (1873), 8 Ch. App. 45; 42 L. J. Ch. 81: L.T. 597; 21 W.R. 46..... Wilson’s Case (1869), 20 L.. T. 962.... Windsor Steam Coal Co., Re (1929), 1 Ci. 15I.. Wise v. Lansdell (1921), 1 Ch. 420.. Withington v. Herring (1929), 5 Bingh. 422... Wood v. Odessa Waterworks Co. (1888), 42 Ch. 1) 5: L. J. Ch. 628; 37 W. R. 733; 1 Meg. 265. Wright v. Horton (1887), 12 A.C. 371; 56 L. 56 L.T. 782; 36 W.R. 17; 52 J. P. 179... Wright's Case (1868), 12 Eq. 334 (n).. “39, 24C ®t GG 2. X Company, Limited, Re (1907), 2 Ch. 92; 76 L. J. Ch. 529; L.T. so... ~7 Yeoland Consols, Re (1888), 58 L. T. 922; 1 Meg. 39.... . York Tramways Co. v. Willows (1882), 8 O.B.D. 685; L.J.Q.B.257;46L.T.296;30W.R. 624 Young v. Ladies’ Imperial Club (1920), 2 K 13 : Young v. Nav: ~ ~"i'itar-- 4c of South Arr 6&7: + + ¢%= 1.7 V1 Xn, Zouch arson 379 SAGE J 2 i LO Index ‘ Abonnement,’ 426 Abroad duty on marketable securities issued, 359 execution of deeds, 581 seal for use, 581 Accident Insurance Policy definition of, 372 duty on, 372 Actions by director against co-directors, 152 company in winding-up, 238 creditors, by, on claims in winding-up, 250 liquidator, by, 240 staying, in winding-up, 152, 250 Accounts, 22, 165 ef seq. And see Capital and dividend accounts ; Secretary ; Share capital ; Allotment and application account analysis of cash books, 170 analysis of petty cash, 167 articles provide for, 22 audit, 22, 181 ef seq. And see Audit auditor’s report upon, 180, 183 ef seq. balance sheet, 177 ef seq. And see Balance sheet bank balance, daily return showing, 166 banking accounts, separate, 168 books of account, statutory obligations as to, 166 what to include, 166 branches, 168, 169 cash disbursements from main office, 168 periodical reports from, 171 call cash book, 173 capital, 172. And see Capital account capital, interest paid out of, to be shown in, 179 cash book, 166, 173, 174, 334 analysis of, 170 daily entries, 166 cashier, 167 checking by secretary of bank balances, 170 cheques, 171 secretary’s duty as to, 171 company must keep, 166 creditors, as to, 174 debentures, interest in, in compiling, 174 debts, collecting, 176 defalcations, avoidance of, 167, 169 departments, summary of, 171 directors, right to inspect, 166 dividend warrants, 174, 175. And see Dividend warrants dividends, cheques for, 173 exchange, rates of, 166 expenditure, classification of, 170 ‘oreign branches, 169. Aud see Foreign branches cash system in case of, 169 jefalcations, how minimised, 169 RRA INDEX Accounts—continued heads of departments to countersign cashier’s payments, 17 imprest funds, 167 inspection of, by directors, i. invoices, 171 journalising entries in cash book, -~ ledger, 174 liquidator’s, 244, 256, 26< form of, 266 materials, payments for, 168, 170 petty cash, 167, 170 petty cash balance, 170 branches, in case of, 167 dockets, 167 postage, 167 recurring commitments, 166 registered office, must be kept at, 166 reports from particular officials, 171 salaries, 166, 168, 170 secretary, duties of, regarding, 165 ef seq. share capital, 172 allotment account, 172 application account, 172 separate banking accounts, 168 subsidiary companies, 170 transfer fees, 173 travelling audit, 169 travelling expenses, 167 vouchers, 171 wages, 166, 168, 170 works separate from head office, 168 Accountant, 166, 175 transfer and registration fees to be coller warrants for dividends ; preparation of Address members, of, 123 notice of situation or change, to be giveud registered office, 15, 119 Addressing machine, 102, 123, 174 annual return, may be used for preparing, i- . registered address, plate should comply with, Adhesive stamps. See Stamp duty bills * payable on demand,’ on, 36-cancellation of, 352 foreign bills, 365 letter of renunciation, on a, 357 notary public, protest by, 367 Adjournments, 140. And see Meeting resolution passed at date of, 140 statutory meeting, of, 130 Adjudication stamp, 353, 376. And see Stamp dui circular of Inland Revenue relating to, 303-308 on all gifts inter vivos, 358, 37¢ Administration liquidator can take out, 240 Administrators. See Executors form of request to be placed on register, -: Advertisement of meetings. 117 ALIS Ls ak 882 Affidavit setition for reduction of capital, supporting, 35 proof of debts in winding-up, 350 stamp on, 357 Agency country where created determines law of, 276 Agreement for sale reconstruction scheme, on a, 212 Agenda, 334. And see Minutes agenda book now not generally used, 334 board meetings, for, 333, 334 secretary” to prepare agenda paper for, 152, 333 cash book to be produced, 334 chairman’s notes of, 336 circulation of agenda paper, 334 if confidential, chairman’s authority required, 335 destruction of agenda paper, 335 inspection of minute books, 337 reading and signing of previous minutes, 335 secretary, duty to prepare, 152, 333 filing documents, 334 notes of proceedings, should take, 336 preceding meeting, should hand chairman agenda for, 335 should read agenda paper, 334 INDEX Agent liquidator may employ, 240 memorandum of association, may subscribe, 8 shares, may apply for, 41, 55 Agreements duty on, 357, 386 filing of, 347 Alberta company legislation in, 831 Aliens may subscribe memorandum of association, 8 Allotment, 44 et seq. amount payable on application, minimum, 46, 50 application and allotment sheet, form of, 448 avoiding of, 48, 49 certificates on, 53 contract for, not in writing ; rights of registrar, 51, 377 contract, how completed on, 57 delegation of, not by directors, 56 delivery of return to registrar, 50 directors, liability where minimum subscription not subscribed, 49 duty payable on letters of, 53, 55, 357, 388 first, return of subscribers’ money in certain cases, 49 form of application for, 51, 446, 447 must be accompanied by prospectus, 52 form of resolution as to, 53 formal, when unnecessary, 8 forms of letters of, 449-451 infant, to, 57 ‘ knowingly,” 47 invalid, may be, 56 irregular, avoidance of, 49 ratification. when. 56 INDEX Allotment—continued legal decisions on, 56 letter of, forms of, 53, 449-451. And see Allotment lettstamp on, 53, 55. 357, 388 minimum subscription prior to any, where public issue, receipt of, must precede, 46, 48 reconstruction scheme, new shares, delivery of contract to registrar, 217, 377 renunciation of, form, 53, 453, 477 resolution for allotment of shares, form of, 161 restrictions as to, 48, 58h return as to, 50, 588 delivery of, 50 secretary's duty to despatch letters of, 53 statement in lien of prospectus to be filed beforc time for, after application for shares, © what constitutes, 56 when contract complet wrongful, damages for Allotment account, 17° Allotment letter ‘orms interim certificate, wit! receipts for amount dv with one receipt, 4 Allottee damages to, on wrongful allotment by directors, Alteration articles of association, of, 27-29. memorandum of association of; association Alternate director, 154 ef seq. appointor, responsibility of, for acts © approval, subject to, 154 articles, define powers, 154 assignment of office, appointment of, is no consent to act, need not be filed in case of defective appointment of, 15s disqualification of, 155 qualification, 154, 155 register of directors, must appear iu, remuneration of, 154, 156 resignation, 156 responsibility of, 155 substitute for appointor, is, 1~ inlimited liability of, when, 15: validity of acts, 155 Amalgamations, 221. See also Reconstruction Amendment, 134, 163, 338 amendment to an, 163 chairman of meeting and, 134, 163, 339 carried unanimously,’ fact to be rec improperly refusing to put an, - nem. con.” meaning of expression, resolutions, to, 163 chairman improperly withholdinminuting motions of proposed, more than one. where. 16-ds. Articles of association “vd see Memorandum vq 384 Amendment—continued must be within scope of notice convening meeting, 124, 163 procedure at, 338 second meeting, at, under old law, 163 secretary’s duties on, 339 seconder, where no, 339 show of hands, exact numbers on, not necessary to record, 339 * And reduced ’ words, when required after name of company, 36 Annual general meeting, 122, 131. See Meetings articles provide for, 131 auditors, appointment at, 182, 338 must be held every year, 131 report on company precedes, 131 balance sheet, must be attached to, 131 contents of, 131 secretary’s duty as to, 132 Annual interest, definition of, 324 Annual report, 131 Act of 1929, obligatory under, 131 circulation of, 132 Annual return, 101, 116 accuracy of, essential, 104 addressing machine, use in preparing, 102 audited balance sheet to be included in, 103 amendment of, 103 certificates to accompany (private company), 292 contents of, 101 directors, particulars as regards, 103 index, when to be annexed, 102 misleading return, 104 particulars required, 102 penalties for default, 104 private company, balance sheet, etc., not required, 103, 290 certificates to accompany, 292 share warrants shown in, 116 shares, particulars of, 101, 102 stock, conversion into, 102 Appeals income tax, in case of, 330 Application, 55 acceptance, may be withdrawn before, 55 agent, by, 55 condition precedent, subject to, 56 decisions as to, 55, 56 fictitious name in, 56 form of, 51 infant’s name in, by father, 56 must be accompanied by prospectus, 52, 219 withdrawn, may be, before acceptance, 55 Application and allotment sheets, 52, 448 Appreciation of assets, 189 Arbitration dissenting shareholder to reconstruction scheme, price of shares fixed by, 215 arbitrator’s duties, 216 Arrangement schemes of. See Scheme of arrangement INDEX INDEX J Articles of association, 7, 8, 9, 20 ef seq. accounts and audit, should provide for, 22 agreements to be annexed to, 161 alterations in, 27, 28, 29 breach of contract by, 28 control of members over, 2. extent of power, 28 increasing liability of members, invalid, 43 minority, alteration must not be oppressive on, = provision to be unalterable, held invalid, 28 special resolution for, form of, 162 alteration of, by special resolution, 27 alterations of shareholders’ rights when fixed by, 213, 214 appointments of servants authorised by, how far binding company, 25 attestation of (Scottish companies), 314 borrowing powers of company should be fixed by, 2: generally exercised by directors, 193 business acquired by company, articles should provide to calls, usually make provision for, 92 class meetings, should provide for, 21 company and its members, relations between, 24 Company (Foreign Interests) Act, 1917, statutory restrictions on alterations, 29 company need not have, 20 secus guarantee or unlimited companies, if none registered, Table A applies, ~ contents of, 21 persons deemed to know, 26 contract, how far article providing for employing certain person constitutes a, 25, 26 copy of, member entitled to, 30 directors, provisions affecting, should be inserted in, . contracts by, with company, 24, ~~ lirectors, appointment of, by , 143 indemnity clause, 22 qualification shares, holding of, 14. time for acquiring, 144 remuneration of, 146 resignation of, under, 148 signatories may appoint first, 144 vacation of office, 147 dissentients under s. 234, cannot be deprived of rights by, z, dividends, as to, 22, 186, 187 capital, cannot authorise payment out of, 188 cash, articles may authorise payment of, otherwise than in, 1¢, directors, power of declaring may be vested in, 187 post, may be sent by, 192 withholding of, may be authorised by, in cases of transmission, 89 executors, registration of, often provided in, 84, 87 executors’ title to shares, articles usually provide for, 84 extraordinary resolutions, copies of to be embodied in or annexed to, 161 lees on registration should be authorise, ‘orfeiture of shares for non-payment director's power to annul, 94 terms to be carefullv followed. J Co 386 Articles of Association—continued where no power in, Court’s sanction required, 93 form of transfers of shares usually provided for by, 60 guarantee or unlimited companies, 10, 11, 20 increase of capital must be authorised by, 31 infants, often prohibit transfers of shares to, 105 inspection of books, right of, cannot be prevented by, 24 interim dividends, under, 187 interpretation of, 27 legal effect of, 24 lien, usually provide for, 93 meaning Of, if doubtful, how ascertained, 27 meetings should be provided for, by, 21, 131 éf seq. adjournment of, 140 annual general, 131 chairman of, 134 convening of, 131, 132 directors to summon meetings, 132 meetings of different classes, 140 poll at, 137 proxies, 136, 138 quorum, as to, 134 resolutions, declaration of chairman at, 135 right to vote at, under, 135 if calls due, may prevent, 136 members, how far bound by, 24 members inter se, how affected by, 24 memorandum of association of company compared with, 11 inconsistency between, 27 nature of, 11, 23 outsiders, effect on, 25 personal representative, may provide for shares to be held by, 84 poll, taking of, should be provided for, by, 21 preference shares, may be altered to authorise issue of, 28 private companies, alteration of, in case of, 291, 293 employees as members, 288 members’ right of pre-emption on transfers, 28a number of subscribers to, 289 provisions necessary in case of, 7 share warrants to bearer, must not authorise, 289 powers of company cannot be extended by, 23 provisions, what should be inserted in, 21 public company becoming private, 293 public document, a, 26 } redeemable preference shares, power to create, 22, 39 reduction of capital must be authorised by, 34 registration of, under Act of 1929, 20 regulations of company, how may differ from articles, 23 reserve fund, provision for, 22 schemes of reconstruction, alteration of rights of shareholders, 213 secretary, duty of, regarding, 29 shareholders’ rights fixed by, how may be modified, 37, 213 share warrants, conditions of, provided by, 110 must not authorise issue of. in case of private companies, 289 signatures to, 7, 20 oo special resolutions, copies of, to be annexed to, or embodied in. 161 stamp duty on, 7, 8, 354, 574 statutory rights of members cannot be abrogated by. 23 INDEX INDEY Articles of Association—continued Stock Exchange requirements, 21, 412 surplus assets,” meaning of in, 263 Cable A in lieu of, if no articles registered, 7, 20, rransfer of shares should be provided for in, 6° directors’ consent may be required, 68 how to be signed, should specify, 70 inderwriting commissions should be authorised by, 21, ¢ variation of class rights under power in, dissentients’ righ. voting, rights of, under, 135 what are, 11 ~vinding-up cannot be restrained by a provision in, rights of members on a, provisions for, 262. = "surplus assets,’ 262 Assessment. See Taxation appeals from, 330 income tax, of, 3z. Assets lepreciation of, 189 distribution of (winding-up), 258 purchase of by liquidator forbidden, 22's purchase of by member of committee of inspection forbidden, surplus, disposal of (winding-up), 267 :axation, 325 Associations incorporated by Royal Charter, Associations not for profit, 4. Attestation, 76, 77 mark, where deed execute power of attorney, of, z-Scotland, in, 314 Attorney. See Power of attort Audit. See Accounts. Auditors, 181 ef seq. access to company’s books, 18, accounts, report of, upon, 183 annual general meeting, appointment co. notice of nomination of new, 182 omission to give, 183 appointment of, 181, 632 annual general meeting, at, Board of Trade, by, 132 company bound to appoint, directors, by, 181, 338 cannot themselves be appointed ...-length of tenure of office, 182 statutory report, names to appear how recorded in minutes, 338 balance sheet, 103, 177, 180, 182 And see Balance sheet books, right of access to, 184 casual vacancies, 183 corporation, cannot be, 18: disqualification for office, 16 duties of, 183, 184 general meetings, entitled to attend, 1 information and explanations, entitled t. minute of resolution appointing, 338 partner or employer of director, cannot be. rowers and duties of 182 ney 888 Auditors—continued oroduction of books, etc., to, 184 orospectus, names of, etc., to appear in, 182 remuneration of, 183, 338, 632-3 report to shareholders on accounts, 103, 183 balance sheet, to be attached to, 180 circulation of, 132, 181 copies of, right of members to, 181 contents of, 183 inspection of, 180 retiring, 183 rights of, 183 shareholders may appoint, 338 statutory rights of, cannot be insisted upon, when, 135 Australia (Commonwealth of) company legislation in New South Wales, 819 Queensland, 821 South Australia, 822 Tasmania, 824 Victoria, 826 West Australia, 826 ‘Authorised capital,’ 31 Avoidance allotment, by applicant on, 49 INDEX ‘B? list of contributories, 253 contents and nature of, 253 dability of transferor after registration, 81 Balance certificate on sale by executors, 89 no fee for issue of, go Balance orders, 254 how enforced, 254 Balance receipt, 72, 73 form of, 456 Balance sheet Act of 1929, obligations as to, 177 annual return, included in, 103 audit of, 166, 182 auditors to report upon, 183 circulation of, 132, 181 contents of, 177 assets, fixed and floating, distinguished, 177 commission, 99, 178 debentures redeemed and reissuable, particulars of, 178 discount, particulars of, 98, 178 goodwill, amount of, 178 : indebtedness by subsidiaries, 178 indebtedness to subsidiaries, 179 liabilities, amount of, secured on assets, 178 loans in connection with purchase of shares, 178 patents, trade marks, etc., amount of. 178 preliminary expenses, 178 subsidiaries, shares in, 178 copies of, members’ right to, 181 directors must sign, 1871 INDEX Balance sheet—continued documents to be attached to, 180 auditors’ report, i8o inspection of, 180 directors’ report, 180 subsidiaries, statement as to, 18 definition of, 180 first, date of, 177 foreign company, 4, 181, 316 general meeting, must be laid before. income and expenditure account, members entitled to copies, 181 public company, free, 181 private company, on payment, 181, period of, 177 private companies and, 181, 291 need not circulate, 132, 181, 2913 orofit and loss account, 177 need not be circulated, 180 secretary should have knowledge oi, Bank accounts, 160, 172, 173, 334 certificate from, as to balance ip. - current account, transfer tc deposit account, 173, 334 deposit, taxation of interest on, ,. pass book, 166 production at board meetings, 153, 334 receipt from, in case of provisianal certificates, share capital—application account at, Banking number of persons to carry on business u. Bankruptcy directors of, 147 law of ; application to fraudulent preference, 24% secured creditors, law of bankruptcy applies in winding-uj shareholder, of ; devolution of title on, 89 meetings, representative not entitled to notices ot, ix. Table A, provisions of ; as to title to shares on, 84 undischarged bankrupt mav not be director, 145 Bearer marketable securities to, duty on, 360. ,. Bills of exchange, 13, 14, 364, 5871 definition of (Stamp Act, 1891, . duty on, rates of, 364, 383, 385 exemptions from, 366 Gixed duty, how denoted, 365 foreign bills, duty on, 365 foreign or colonial currency, bill drawn in, 365 inland and foreign bills, distinction between, 360 name of company in, 13, 14 ‘payable on demand,’ duty on bills, U4 meaning of expression, 364 payment out of fund, what form orders mav take, 364 personal liability of person signing, 14 postdated cheques, 365 anstamoed. penalties for issuing, 3ou Ley, 30 8go Bills of Sale Acts debentures need not be registered under, 19a Blank transfer, 82 transfers by deed or not, 82 when given, 82 Board meetings, agenda paper to be circulated among directors prior to, 334 articles usually provide for, 149 business at, 149 ef seq., 334 cash position of company, consideration of, 153, 3 34 cas#ing vote, 150 decision at, when not unanimous, fact not recorded, 335 directors must hold, 149 discretion of, as to, 150 dissenting directors at, as to minuting, 335 expenses of attending, 146 interest in contracts, disclosure of by directors, 15 invalid, when, 151 minutes of, 333 ef seq. And see Minutes. alteration of, 335 duty of secretary to prepare, 333 formal proceedings at, 334 inspection of, members not entitled to, 141 preceding meeting, minutes of, 334 reason for keeping, 333 notice of, 151 length of, 151 outsiders, how affected by invalid, 1 52 procedure at, 334 quorum at, 150 articles usually prescribe, 150 necessity of, 151 ratification of invalid, 152 resolution in writing signed by all directors, when eaguivalent to resolution of meeting, 149, 157 routine business at, 334 secretary to be present, 152 Table A, provisions of ; as to, 150 time, 151 votes at, 150 when held, 151 Board of Trade auditors appointed by, 182 balance sheet, period up to which to be made up, power to extend, £77 capital, interest payable out of ; sanction required under s. 54, 186 consent to use of words ‘ Royal,’ ‘ Imperial,’ etc., 13 directors, particulars of, on circulars, etc., grant of exemption, 149 inspection by, 635’ licence of, to dispense with word ‘ limited,’ to hold land, g form of, 771 name of company, change of ; approval of Board reauired, 17 Table A mav be altered bv. 20 INDEX 1 NIT Board of Trade—continued winding up, in, accounts of liquidator, may enforce auc criminal proceedings, may bear costs © liquidator, release of by, 228 returns, periodical, to, 256 unclaimed assets, particulars of, to be given ° Bodies Corporate (Joint Tenancy) Act, 1899 bodies corporate can hold share in joint tenan Bonds application for, form, 445 issue of, under Companies Clauses Acts, 301, - registered, duty on, 360, 382, 386 renewal of, stamp duty on, 384 Stock Exchange requirements respecting, 416, Bonus shares distribution of, 173, : Book debts no control of liquidator ove sale of, by liquidator, 24. Book-keeping, 163. And see Books. See Accounts. account, of, company must keep proper, - article prohibiting inspection of, invalic auditors right of access to company’s, . destruction of, authorised by meeting, 26: directors’ resolution to close, form of, 162 extraordinary resolution to direct disposal liquidator’s right to possession of, 241 lien upon by third person, 241 meeting of company on winding-up, disposal . winding-up, disposal of, 267 liquidator to retain pending, Borrowing powers, 17, 47, 193, 27° articles may limit, 21, 193 certificate of commencement exercised prior to issue of, 4 commencement of business, 4~ debentures, issue of, 194. . iu directors may exercise, 193 general meeting may contro express, 193 general meeting, 193 mplied, trading companies have, 17, 23, 1c nethod usually adopted by companies, 1u cowers of attorney, under, 275 raise ’ money, power to, 193 statutory companies, 307 Branches accounts of, 168, 16. service of legal nrocec British Columbia company legisla: Broker payments tc, for Brokerage anderwriting commissions anu, oar Nar ® SOwWers must no 392 * Building Society ’ use of words in name prohibited, 12 Business carrying on, by liquidator, 239, 245 certificate of registrar prior to commencing of, 47, 194 borrowing powers suspended until, 194 commencement of, where no public issue, 47 commencement of, where public issue, 44 dquidator assumes control of, 239 application to Court to carry on, 245 may carry on for beneficial winding-up, 239, 245 priority of debts and liabilities in carrying on, 246 right to carry on, what involved in, 246 private companies, privileges as to commencement of, 291 winding-up of company. effect on, 233 INDEX Calendar year meaning of, 129 Calls, o1, 93 advance, payable in, 93 amount of, fixed by resolution, 92 amounts received on, how treated in accounts, 173 arrears of, 173 articles usually provide for, g2 balance order, effect on right of action for, 254 company can sue for, 24 directors’ duties as to, 92 may make, 92 resolution to make, form of. 161 due, when, 92 equality among shareholders, 92 forfeiture of shares, liability for unpaid calls notwithstanding, 93, 94 forfeiture of shares; subsequent purchaser, how affected. 81, 82 infant, liability to pay, 105, 108 interest on, 92 letter, form of, 464 liability for interest for overdue calls, 92 power to make, in whom vested, gz in the nature of a trust, 92 proof in administration by company for, 92 regulations authorising must be strictly observed, 92 resolution to make, form of, 161 “el must fix amount of and time for payment, 92 set off for, in winding-up, 255 specialty debt, are, 92 time for payment, g2 transferor of shares liable for, 82 implied right of indemnification, 82 voting when calls are due, 136 winding-up, on contributories in, 252, 254 Canada Dominion Companies Acts in, 828 ef seq. Provincial Laws, companies under, 831 Alberta, 831 British Columbia, 832 INDEX Canada—-continued Manitoba, 835 Nova Scotia, 838 Ontario, 839 Quebec, 844 Saskatchewan, 845 Cancellation of shares articles must authorise, 34 unissued shares, only applies to, 34 Canvassing. See Offer for sale Cape of Good Hope, see South Africa (Union of), 851 Capital, 31 ef seq. And see Issue of shares; Shares, Registro alteration of, how to be carried out, 31 ef seq, 593 articles of association, can be authorised by, 31—_ amount of, to be stated in memorandum, 10, 271 appreciation of, capital assets ; set off in, 18¢ authorised,” 31 cancellation of shares, 34, 35 articles must authorise, 2+ capitalisation of profits, 190 circulating, how dividends paid if, 18¢c what is, 189 consolidation of loan capital, 356 how differs from that of share capital, 356 consolidation of share capital, 32 general meeting, must be effected in, 32 notice to registrar, 32 resolutions for, 32 conversion and re-conversion, articles must authorise, 33 ~ eftect of, 33 general meeting, must be effected in, 33 notice to registrar, 33 special resolution for, 33 stock, how differs from shares, 33 dividends cannot be paid out of, 188 directors may be liable if so paid, 188 memorandum or articles cannot authorise it, 188 dividends, proportion of share capital regulates payment «. duty on, Acts relating to, 354. And see Stamp duty loan capital, 356, 383, 388 share, 354, 379, 387 fixed,” need not be maintained out of revenue, 189 what is, 189g floating,” 18a increase of, 31 articles must authorise, duty payable on, 32 general meeting, must be effected in, 32 notice of, to registrar, 32 preference shares, issue of, on, ,. resolutions for, 32, 161 form of, 162 what should define, 161 rights of existing shareholders cannot be prejudiced, 32 Stock Exchange requirements, 418 interest, payment of ; out of, 186 accounts laid before companv must show, 179 894 Capital—continued Board of Trade’s sanction, 186 ‘ issued,” 3I loan capital, definition of, 356 duty on, 356, 383, 388. Aud see Stamp duty. by whom payable, 356 consolidation of, as to duty when, 356 on what charged, 362 how secured, 360 memorandum of association must state, 10, 31 how altered, 31 ef seq. net profits and, distinction between, 188 new, issue of, 50, 54 nominal capital, 31 notice of increase, etc., of, to be sent to registrar, 32, 33, 34 “paid up,’ 31 premium, issued at a, 172, 173 reduction of, 34-36. And see Reduction of capital. articles must authorise, 34 how effected, 34, 35 in what ways company may carry out, 34, 35 minute approved by Court, 36 order and minute to be produced to registrar, 36 petition to Court, 34-36 sanction of Court, if required, 35 words ‘and reduced’ may be ordered to be added, 36 reorganisation, 34, 209. And see Reconstruction. how effected, 209 majority required if particular class is to be affected, 222 methods of, 209 share. See Shares. agreement to take, 41 alteration of, 37, 38 articles may define, 37 certificates, 42. And see Certificates. how far binds company, 42 choses in action, are, 37 classes of, 37 commission on, 39 discount, issue at a, when legal, 39, 97 effect of illegal, on an allottee, 39 estoppel against company, 42 loss how borne on reduction of capital, 38 memorandum of association defines class, 37 nature of, 37 preferential right in, 38 premium, issue at a, 40 private company must have a share, 289 redeemable preference, 39 who may hold, 41 stamp duty on registration of companies, table of fees, 379 not in case of unlimited company, 381 stock, how differs from shares; 33 sub-division of, 34 articles must authorise, 34 general meeting, must be effected in, 34 proportions, shares may be split into, 34 mnpaid lability, proportions preserved, 34 INDEX INDEX v4 Capital—continued uncalled, whether included in sale on reconstruction, 211 winding-up, calling up of uncalled, 2*-Capital account depreciation in wasting property may appear in, 189 Dapital and Dividend accounts, 172 call account, 173 } capital issue, money received to be paid to company’s account, 172 amount entered in share cash book, 172 application account,” to be opened, 172 ssue over-subscribed for, 172 transfer to ‘allotment account,” 172 commissions on issue of shares to be written off, 173 debentures issued at discount, 172 sinking fund in case of, 173 discount on issue of shares to be written off, 173 dividend warrants, 174. And see Dividend warrants. premium, cash collected by way of, 173 shares issued at premium, 172 special dividend account, 175 wasting property, depreciation of capital in, 189 Capital clause alteration of, 31 Capital Redemption Reserve Fund, 22, 39, 190, 191 Cashier, 165 assists secretary, 165 countersignature of secretary to payments by, 167 fees for transfers, 173 postage book, duties as to, 167 Papitalisation of profits, 190 articles of association as to reserve fund, alteration of, 191 sonus out of reserve, 191 free of income tax, 191 issue of fully paid shares, 191 shares how may become, 1 procedure for, 191 reserve, out of, 191 Card index, 66, 67, 354 advantage of, 66 alterations in, 66 cabinet to contain, files, of, 354 share-register, form of, 39: Cases, Table of, 857 Cash dividends to be paid in, 187, 191 foreign branches, accounts at. 169 petty cash balance, 170 branches separate from head office, in case of, imprest fund, should be in nature of, 167 petty cash dockets, 167 Cash book. See Accounts. analysis of, should be kept by secretary, 170 banking account, 166 company should have, 166 entries in, iournalising of, 173, 174 “y. 896 Cash book—continued production of, at meetings, 334 ‘Casting vote,” 135, 150 Centralisation in filing, 342 Central oftice powers of attorney, filing in, 272, 277 Certificates, share and stock allotment, on, 53 cancelled, register of, 71 charge for, 43 company estopped on issue of, 42 , necessary for holder to act on certificate, 42 debentures of, 53 duplicate, 79 declaration and indemnity for, form of, 444 evidence of title to shares, 42 forms of, 43, App. F., 433-438 fractional, form of, 442 fully paid-up shares, protection of bona fide holder, 42 lost or worn out, in case of, 43 negotiable instrument, not a, 42 preparation of, 8o share. See Share: Share warrant. limitation of time for issue, 53 Stock Exchange requirements as to share, etc., 415 Certificate of incorporation conclusiveness of, 9 date, essentiality of, g evidence of completion, 9 issued by registrar on formation of company, g Certificate to commence business, 47 Certification of transfers, 70 ez seq. address of company, 71 balance receipt, 72 books, closing of ; should not affect, 79 cancelled certificates, 71 duty of companies, 70 estoppel, how raised on, 72 form of, 71 legal effect of, 72 notice as to, form of, 457 notice to transferor, 71 record of, where to be kept, 71 rubber stamp on, 70 secretary’s duty regarding, 70 ef seq. secretary’s signature, 70 Stock Exchange, by, 71, 72 unstamped or undated, not material, 70 Chairman, 131, 134 ef seq., 150, 163, 334, 339 adjournment of a meeting, 140 amendments to resolutions, and, 134, 163, 339 casting vote, 135, 150 closure, moving the, 134 declaration to be conclusive, 135, 160 not if poll demanded, 135, 137, 160 improperly withholding amendment, 134, 163 meeting, adjournment of, 140 secus if business is unfinished, 140 INDEX INDEX Chairman—continued statutory meeting, 130 minutes, to sign, 141, 335 alterations in, 335 evidence, to be, 141, 333 poll, declaration of, immaterial on a, 137 rights of, on, 137 resolutions, amendments to, refusing to put, 134, 1 declaration of chairman conclusive, 135, 160 show of hands, 134 statutory meeting : adjournment of, 130 voting, only those entitled, 134 * Chamber of Commerce ’ name of company containing words, change of, 4, 17 used as part of name, when permitted, 13 Change of name, 17 Charges, See Register of charges ‘ fixed ’ and ‘ floating,’ 194 ‘ floating ’ (Scotland), 310 mortgages, word includes, 1: Charities allowance on taxation for donations to, 325 Cheques accounts, duties of secretaries in dealing with, application moneys, for, receipt of, 46 companies head office separate from works, . '° director signing, when personally liable, 14 dividends, for payment of, drawn on bankers, ~73 name of company to appear on all, 13 post dated, as to duty, 365 - receipts for payments by, 573 ‘Chose in action,’ share is a, 37 Circulating capital, Class meetings, 21, 3z, Clergyman may not be director of trading company, 14: Clerk may represent company’s secretary, I5 Closing register, 100, (-Clubs, 4 Code Napoleon accounts in countries governed by, 174 Colonial and foreign companies Stock Exchange regulations regarding, 420 transfers of shares, duty on, 384 Colonial Government and Municipal securities securities issued by, duty on, 361 Colonial probate, 85 Colonies duty on unstamped transfers sent to, 3; Commencing business certificate of, 47, 194 contracts prior to company, are provisional, duty on documents to be filed prior to, 380 private company, does not require certificate, statutory restrictions as to, 44 ef seq., 612 va Tm | 808 INDEX Commissions, 95 ef seq. And see Underwriting commissions. absolutely, shares agreed to be subscribed, for, 96 annual return, particulars of, in, 103 articles must authorise, 95, 96 disclosure of, g6 limit on, 96 over-riding, 99 private company may pay, 292 prospectus must disclose, 96 shares, on issue of, 39, 95 writing off of, 173 « underwriting, 95 ef seq. Commissioners of Inland Revenue. See Inland Revenue Commissioners appeals to, 330: Committee of inspection, 235. A#d see Voluntary winding-up absence of member from meetings of, 236 appointment of, 235 bankruptcy of member of, 236 meetings of, 236 profit by members of, forbidden, 236 purchase of company’s assets by, forbidden, 236 vacancies, how filled, 236 Committee of investigation resolution appointing, forms of, 162 Companies Act, 1907 private companies, how effected by, 288 Companies Act, 1928, 2 Companies Act, 1929, 555 ef seq. (App. H) accounts, 626 ef seq. allotment of share capital, 586 effect of irregular, 587 return as to, 588 alteration of articles of association under, 27, 574 annual general meeting, as to company holding, 620 articles of association, provisions as to, 573 alteration of, 27, 574 form, signature, 574 stamp on, 354, 574 associations not for profit, as to, 577 auditors, appointment of, 632 powers and duties of, 634 remuneration of, 633 balance sheet, 627-632 canvassing, house to house, 731 capital, payment of interest out of, 594 carrying on business with less than legal minimum, 580 certificate of incorporation, conclusiveness of, 575 codifying Act, is not a, 3 commencement of business, restrictions on, 612 committee of inspection, as to, 666 consolidation of law relating to companies, 2, 3 contracts for shares allotted ‘ otherwise than in cash,’ delivery to registrar, 588 contracts of company, 580 contracts, disclosure of interest by directors, 643 creditors’ voluntary winding-up, 676, 678 debentures and floating charges, 603, 604 defunct companies. removal from register, 705 INDEX Companies Act, 1929—continued directors, appointment, etc., of, 637 particulars of in annual return, 618, 63g disclaimer of onerous property, 688 discount, issue of shares at, 592 document, meaning of word in, rdominion register, 616 effect of memorandum and articles enactments repealed, 791 fees, table of, 788-90 financial assistance for purchase of own shares, provision hibited, 590 fraudulent persons, restraint from management, 6° guarantee, companies limited by, as to, 578 memorandum and articles, of, 759 indemnity clauses, avoidance of, 645 inspection by Board of Trade, 635 interest out of capital, 594 interpretation, etc., 739 liquidator, appointment, remuneration, etc., of, 659, 676, 679 powers of, 661 removal of, 661, 632 liquidator’s applications to Court, 683 loss of office, compensation for, 644 members’ voluntary winding-up, 67€ memorandum of association, 571 contents of, 571 where company limited by guarantee, _, stamp on, 572 unlimited company, 770 minutes, company to keep, 626 chairman, to be evidence after signing bv mode of forming incorporated company, 57i name of company, provisions as to, 576 objects of company, alteration of, 572 offences in connection with winding up offers for sale of shares, 731 office and name of company, 611 official receiver, as to meaning, etc., of, ~ penalties under, 402-411 private company, meaning of, 579 private examination in winding-up, 670 probate, evidence of grant of, 600 prospectus, as to issue, etc., of, 582-586 public examination in winding-up, 670 reconstruction, dissentients rights on a, 64,, facilitation of, 646 rectification of register by Court, 61, redeemable preference shares, 591 reduction of share capital, 595 register of members, company must keep a, under, 6. registrar, documents to be filed with, 399-4071 registration of charges, 604 company’s register, 60q rectification of, 608 registration of memorandum and articles, 575 sale of property to a new company on reconstruction. 676 effect of. A~~ ye 900 INDEX Companies Act, 1929—continued procedure under, 677 schedules, 743 et seq. schemes of arrangement, 645 with creditors (s. 251), 682 share capital, 582 et seq. power of company to alter, 593 shares, compulsory acquisition of, 647 statement -in lieu of prospectus, form, 772, 779 statutory meetings, provisions as to, 620 subsidiary company, 629 supervision of Court, winding-up, 683 Table A, provisions of, 743 et seq. transfer of shares under, 599 et seq. must be in writing, 598 underwriting commissions under, 589 unlimited company, registration as limited, 577 variation of special rights, provisions as to dissentients, 598 voluntary winding-up, 674 et seq. winding-up, 648 ef seq. contributories, as to, 648 definition of, 650 Court, by the, 651 declaration of solvency, 675 final meeting in, 677, 680 fraudulent trading, 695 modes of, 648 offences in connection with, 692 official receiver, as to appointment, etc., of, 657 unregistered companies, of, 721 Companies Clauses Act, 1845 bonds, issue of, under, 301-313 borrowing on mortgage or bond, 301, 313 consolidation of provisions as to certain companies, 296 debenture bonds, form of transfer, jor infant shareholder in statutory company, 106 voting rights of, 106, 108 register of shareholders for statutory companies, 300 contents of, 300 Scottish companies, applicable to, 313 subsequent Acts, 296 title of, 296 transfer of stocks and shares, form of, 301 transmission of interest, entry in register, 303 Companies (Foreign Interests) Act, 1917, 29 Goupanies, Porm) Order, 1929, 47, 48, 149, 231, 292, 315, 492 et seq. pp. G) Companies (Particulars as to Directors) Act, 1917 foreign companies, obligations of under, 316 Companies (Winding up) Rules, 1929, 232 et seq., 250, 253, 256, 265, 803 et seq. (App. K.) Companies liquidation account, 256 Company alteration of objects, 18 amalgamation of. See Reconstruction auditor, when company bound to appoint, 181 books ; directors resolution to close, form of, 162 books of. disposal on winding-up. 26% INDEX Company—-continued possession of, by liquidator, 241 borrowing power, 17, 47, 193 business, liquidator and, 246 implied for ordinary business, 17, 193 method usually adopted, 194 colonial, Stock Exchange requirements as to, 420 control of, may be vested in a manager, 142 controlling interest in, acquisition of complete, how effected, 209, 221 corporate body, when company becomes, g creditors and, scheme of arrangement with, 222 debts, deemed unable to pay, 227 definition of, 1, 739 directors may bind although improperly appointed, when, 145 discount, issue of shares at a, 39, 97 «t seq. dissolution of, 268 striking off register, by, 269, without winding-up, on reconstruction, 224 executor, appointed as, 88 syndic represents, 88 ‘existing company,’ meaning of, 1, 739 foreign, 5, 315-320 imitation of name of, 13 foreign, duty on stock, etc., of, 359 Stock Exchange requirements as to, 420 guarantee, limited by, 3, 4, 10, 20. And see Guarantee companies memorandum of association of a, 10 stamp duty on registration af, 379 joint stock company, definition of, 7: land, holding by, 9 limited by shares, 3, 20 meetings. See Meetings meeting how represented at, 136 member of another company, when, may appoint representative, 136 member, can sue and be sued by, 24 membership of a, how constituted, 41 memorandum of association of. See Memorandum of association mining, 3 minutes, must keep, 141, 333 name of, 6, 12, 13. And see Name of company not limited by, shares, 3, 4 private. See Private company private company becoming public, 293 public company becoming private, 293 purchase of its own shares prohibited, 15, 40 financial assistance for, provision of, illegal, purchase of business of, 21 reconstruction of. See Reconstruction register. See Register register of mortgages, 199 registration of. See Registration companies capable of, 715 discretion of registrar as to, 6 mandamus, may be compelled h private comnanies. in case of. 902 Company—continued essential requirements for, 6, 7 sale of property on reconstruction, 211 Scottish, 306-314 statutory, 295-305. And see Statutory company subsidiary, 170, 180. And see Subsidiary company unlimited, 4 winding-up. See Winding-up. before entitled to commence business, effect of, 47 circumstances for Court, 226 effect of, on corporate state, 233 unregistered companies, of, 230, 320, 721 ef seq Compensation allotment, in respect of irregular, 49 loss of office, for, to directors, 224 may be paid for forged transfer, 83 Condition precedent : application for shares subject to a, 56 Compounding for stamp duty agreement by company with I.R. Commrs., 359 Compromise creditors, with ; by liquidator, 240, 250 power for company, 222 Consolidation articles must authorise, 32 general meeting, must be effected in, 32 nominal share capital and loan capital, distinction between, 356 notice to registrar, 32 resolutions for, 32 Contract, 153 allotment, for, as to necessity for writing, 51, 378 allotment, delivery to Registrar of contract of, 50, 377 article appointing secretary, etc., not a binding, 25 breach of, by alteration of articles, 29 ‘ director, disclosure of interest in, by, 142, 151 duty on, 51, 357 filing of, 51, 347 fraud, where contract under a power of attorney, 285 liquidation, during, 239, 246 made before company entitled to commence business, 47, 48 married women, by (Scotland), 307 particulars of, if shares not paid in cash, 50, 377 duty on, 51, 378 prospectus, particulars of, to appear in, 775 ef seq. provisional, when, 47, 48 statutory provisions as to, 154, 580 statutory report, when to appear in. 621 Contract notes table of fees payable on, 383 Contributories ‘A’ list of, 253 adjustment of rights on distribution of assets, 262 application to the Court, by, 254, 263 'B’ list of, 81, 253 balance orders, 254 bankruptcy of members, in case of, 255 calls upon, by liquidator, 240, 254, 262 in distribution of surnlus assets 262 INDEX INDEX 27 Contributories—continued death of member, in case of, 2 54 definition of, 253, 650 how payment by, may be enforced, 254 liability in a winding-up, 253, 648 liquidator settles list of, etc., 240, 252, 254 ascertainment of company’s assets prior to, 252 evidence of liability of persons named, list to be, =. yz may apply to Court for order of payment, 254 objections, to hear, 254 lists, nature and contents of, 23 liabilities of ‘ A’ and ‘ B’ lis’ ~-2 notice to contributory, 254 rectification of, 254 married women, 651 misfeasance proceedings, may institute, : ~ set off of debts by, 254 what included in term, 253 Conversion and reconversion articles must authorise, 33 notice to registrar, 33 special resolution for, 33 stock, how differs from shares on a, 33 Corporate body auditor, cannot act as, 182 existence of, 9 memorandum of association, may subscribe to, « position of, 42 representative at meeting, can appoint, 136 transfer, to, 76 transferor a, 75 when company on formation becomes a, 9 Corporation aggregate deeds, execution of, by, 815 may appoint agents, 815 meaning of, 816 power of attorney, execution of deeds under, 81 5 Corporation by Royal Charter, 12 Correspondence filing of, 345, 351 Costs liquidator, liability for, when, 265 liquidator not personally liable for solicitors, 264 prosecution of delinquent directors, 257 taxation of solicitor’s, 258 voluntary winding-up, in, ‘ Coupled with an interest * powers of attorney whr Coupons, 117, 192 registers, 118 share warrants, on, .: / stamp duty, when exempt from Court applications to (winding-up), 20, carrying on company's business, x. contributories, when generally made creditors, by, 264 liquidator or contributr— 904 Court—-continued list of contributories, rectification of, 2 54 private examination for (winding-up), 247 proof of debts, questions as to, 250 appointment of liquidators by, 266 default in delivering returns, &c., 51 liquidator, application by, if lien on company’s books, 242 reduction of capital, 34 sanction of, for borrowing money, 246 schemes of arrangement, jurisdiction to sanction, 222 variation of class rights, 37 winding-up, by, 226 applications to, 263 by contributories, 264 for additional liquidator, 266 creditor may apply to, 264 how commenced, 226 liquidator may apply to, 263 remuneration of, may be fixed by, 237 petition for, 226 private examination before, 247 removal of liquidator by, 266 winding-up under supervision of, 230 Creditors alteration of objects of company subject to rights of, 17 capital, may object to reduction of, 35, 36 court, may apply to, in winding-up, 264 debts, proof of, 249 debts, secured, 251 liquidator’s duties as to, 249 advertisement for, 249 majority may bind minority, when, 222 meetings of (winding-up, on), 234, 256 priorities of, in winding-up, 258 reconstruction, rights on, 216 majority, powers of, 222 schemes of arrangement, rights on, 216, 222 under s. 153, 222 unsecured creditors, 217 with creditors alone, 209 secured, 251. And see Secured creditors Creditors’ voluntary winding-up. See Liquidator; Voluntary winding: up ; Winding-up Crown no priority in payment of creditors, 259 INDEX Damages allotment for wrongful, 49 breach of duty, for, in respect of shares, 43 Death of donor of power of attorney, 282 when given for valuable consideration, 281 where is coupled with interest, 284 Death of shareholder. See Member; Shareholder evidence of, 88 shares, to whom pass on death, 37, 42 INDEX )E Debenture holder actions by, 196, 205 on behalf of other holders, 196 application to Court, 205 balance sheet of company, right to copy of, 181 private company, on payment, 181 floating charge, rights of, in case of, : ~7 inspection of register by, 203 petition, may present a, for winding-up, 196 not if no direct covenant between company and stockholder, 196 . receiver, right to appoint, 20¢ 4nd see Receivers agent, is an, 205 notice to registrar, of position of, 205 statutory duties of, 206 reconstruction, position on, 2-0 register of debenture holders, 2¢-copy of, 204 inspection, 204 trust deed, debentures secured by, 195 provision for meetings, 195 rights under, 195 sue, one holder may, for others, 196 trust deed, debentures secured without a, 196 mortgagee, whether has remedies of a, rights of holders, in case of, 196 trustees for, voting rights when holding shares, unsecured debentures, rights of, $98 votes at meetings of company, may be entitled ° winding-up order, when entitled to, 196, 107 Debenture stock, 198 certificate of, 204 form of, 439 Companies Clauses Act, 1863, issued under, how far a statu’ y charge (Scotland), 313 holders, position of, 199 mortgage certificate, form of, 439 notice and interest warrant, form of, 470 redemption receipt, form of, 476 register of holders, 198, 204 scrip, 199 statutory companies can issue redeemable, z * creation of debenture stock by, 201 Stock Exchange requirements as to, transfers of, 198 trust deed, secured by, 198 issue of stock before execution vc 7x what is, 198 Debentures, 193 ef seq. And see Debenture holder action by holders in respect of, 19h. 05 bearer, payable to, 194, 198 delivery free from equities, . negotiable instruments, 194, . bearer, in Scottish companies, 313 Bills of Sale Acts, as to registration under, certificate, form of, 441 charge created by, 194, 706 3 906 Debentures—continued contract to subscribe for, specific performance of, 603 definition of, 7, 44 discount, issued at a , 98, 172 sinking fund in respect of, 173 duty on, 356, 362, 382, 386 fixed charge, 197 floating charge, 197. And see Floating charge creation of prior mortgages, 197 Scottish companies, not possible in case of, 310 interest, payment of, shown in accounts, 174 taxation of, 324 issue of redeemed, 363 loan, premium on, stamp duty on, 362 meaning of, 199 memorandum of satisfaction, lodgment with registrar, 204 mortgage or charge on company’s property, 194 ‘naked debentures,’ 198 in Scottish companies, 310, 313 negotiable instrument, when may be a, 194, 198 perpetual, statutory provisions as to, 602 power of sale in debenture holders, 196 premium on loan, stamp duty on, 362 receiver appointed by debenture holders, 196, 205 et seq. And see Receivers redeeming and re-issue of, power for company, 363 register of, 204 registration of mortgages, 199 ef seq. company’s register, 203 contents of, 203 copies of deeds to be kept at registered office, 203 inspection and copies, 203 omission of entries, 203 Somerset House register, 199 et seq certificate of registrar, 202 contents of, 199 ef seq. inspection of, 202 non-registration, effect of, 202 receiver, appointment of, 202 resolution to issue, form of, 163 scheme of reconstruction, allotted on a, 223 Scottish companies, in, 309 ef seq. And see Scottish companies classes of, in Scotland, 310 common law of Scotland, at, 310 delivery to creditor, as to, 310 difference between, and in England, 309 floating charges, 310 heritage (e.g. land), 311 deed of trust, nature of, 311 registration of, 311 securities, how created, 311 moveables, security created over, 311 ships, as regards, 311 trust deeds by, 311 naked, 310 deed of trust regulates rights, 310 position of lender, 310 trustees. advantages of having, 310 INDEX INDEX Debentures—continued what are, 310 scrip to bearer, 199 secured, payment need not be, 194 security created by, 195 stamp duty on, 356, 362, 382, 386 stamping of trust deed securing, 356 statutory companies, 297, 301 Stock Exchange regulations as to, 417 taxation, expenses of issue, not allowed on, 326 transfers of registered, 204 duty payable on, 382 trust deed, secured by, 195. And see Trust deed advantages of, 195 charge by way of legal mortgage, 195 contents of, 195 demise to trustees, 195 majority, powers of, 195 provisions of, 195 receiver, 196 remedies of holders under, 196 Stock Exchange regulations as to, 196 trust deed, secured without a, 196 holder in position of mortgagee, doubtful whether, : ordinary provisions of, 196 security, how created, 196 trustees for holders of, voting rights when holding shares, 7 unsecured, 198 seal, are under, 198 what is a debenture, 194 Debts bad, allowance on taxation for, 326 collection of, 176 company unable to pay, when deemed, 226 proof of, 249. And see Secured creditors affidavit required for, 250 appplications to Court as to, 250 disputed claims, 250 liquidators duties as to, 249 may reject claim, 250 stay of actions regarding, 250 voluntary winding-up, in, 246 et seq Deductions income tax, in respect of, 323 ef - Deed abroad, execution of, 272 blank transfers, how affected if transfer by, 82 execution by a mark, form of attestation, 409 Scotland, execution of, in, 308 statutory companies, transfers in. to be by, 302 Deeds filing of, 347 trust, duty on, 360 ‘ Delegatus non potest delegare,’ 275 Denoting stamps when used, 353 Depreciation, 188 Directors, 142 ef seq. And see Board meetings : Register of directors 908 Directors—tcontinued accounts, secretary should render synopsis of, to, 167 books of, entitled to inspect, 166 actions by, 152 acts of, validity of, 145 affidavits by, on reduction of capital, 35 agents, are, 145 allotment of shares by, 56 board must be properly constituted, 56 fiduciary power, is a, 56 . irregularity in, may be cured by ratification, 56 liability of, if minimum subscription not subscribed, 49 alternate, 154 ef seq. And see Alternate director annual return in respect of, 103 appointment of, 144 acts may be valid notwithstanding defective, 145 articles may regulate, 21, 144 consent to act, as to, 144 improper, acts may bind company even after, 145 private company, 144 shareholders may determine, 143, 144 signatories may appoint, 143, 144 apportionment of remuneration, 146 articles of association should provide for appointment, etc., of, 21, I44 casual vacancies, may provide for, 144 auditor, cannot be appointed, 182 auditors, appointment of, by, 182 authority, presumption of, 27 balance sheet, two to sign, 1871 bankruptcy of, 147 undischarged bankrupt may not act, 145 board meetings, expenses of attending, 146 must be held, 149. And see Board meetings quorum at, 150 secretary’s duties at, 152 time and notice of, 151 borrowing powers on behalf of company, 193 calls, power to make, usually vested in, 92 articles as to making, to be strictly observed, 92 trust, power in the nature of a, 92 casual vacancies, filling, 144 cheques, etc., signing, 14 co-directors, can sue, 152 committee of, 152 company, how far bound by acts of, 145 company must have, 143 compensation for loss of office on reconstruction, 224 disclosure of, 225 general meeting must ratify, 224 conflict of interest, must not act where, 142 consent of, to act, 7, 45, 144 contracts by, on behalf of company, 27 defective appointment of, may be valid notwithstanding, 145 delegation of powers, 56, 152 disclosure of interest, 142, 151 disqualification (e.g. bankruptcy, etc.), vacancy of office on, 147 dissenting, minuting of. at meetings, 335 INDEX INDEX Directors—continued dividends capital, out of, liability for, 188 declaration of, 186, 187 ecclesiastical persons cannot be, 143 election of, resolution, form of, 3:8 employee of, cannot be auditor, 182 excluding, injunction to prevent, - expression, what included in, 1s "extra vires,! 11 extraordinary general meeting, may forfeiture of shares, as to, by, 93, 04 annul, power to, 94 convene, fees erroneously paid, during disqualification, recovery pany, 148 income tax on, i. proof for, in winding-up, : 4 sue for, may, 146 foreign seal, 153 indemnity clause, 22 ‘ insolvency,” meaning of, as a disqualification, 3. 7 interim dividends, powers of, as to, 187 liquidation, position of, during, 239 liquidator’s position in winding-up as regards, 239 power to prosecute delinquent (winding-up), 257 list of, to be delivered to registrar, 7, 149 lunacy of, 147 managing, 142 how distinguished from ordinary, 142 meaning of term, 142 Act of 1929, s. 144, extended meaning, 1. meetings, as to convening, 132 minimum subscription, liability for allotment prior to, named in prospectus, 45 names and addresses of, to be sent to registrar, 149 names of, to be printed on company’s circulars, etc., 149 notices, signatures required upon, 119 office of director, how terminated, 147 particulars of, return of, 148 partner of, cannot be auditor, 18> personal liability of, 14 prospectus, for mis-statements in, . signing, etc., negotiable instruments powers of, borrowing, 21 calls, to make, 92 delegation of, 56, 152 private company, need not sign consents on appointment, 291 private company, whether ‘ persons in the emplovment of the company,’ 29o prosecution of, in winding up. 257 prospectus to be signed bv, qualification shares, 21, 143 articles may provide as to, 143 defective, acts may be valid notwithstandins contract to be delivered to registrar, ~ - contract to take, as to + gift of, - ~~ bv com 910 Directors—continued must be obtained within certain time, 144 purchase of, and refundment is illegal, 145 trustee for company, 145 qualifying shares, how affected on reconstruction by acquisition of complete control of company, 222 quorum, I50 re-election of retiring, form of minute, 336 register of, 148. And see Register of directors . relief of, from liability, 154 removal of, 21 remuneration of, 146 apportionment of, 146 articles may regulate, 146 balance sheet, disclosure of, in, 147 board meetings, attendance at, 146 expenses of, iucluded in, 146 receivers and managers, payment as directors, 146 statement of, must furnish, 147 report before annual general meeting, 131 contents of, 131 report, statutory, 130 reserve fund, may set aside, 190 resignation of, 148 resolutions. See Resolutions of directors responsibility of, 152 retiring, 148 rights of, 152 salaries, taxation of, 146, 330 share warrants, not good for:qualification shares, 118 shares, contracted to be taken by, to be paid for, 46, 48 signature on documents, 14 statutory declaration by, 7, 45, 47 statutory meeting of company, duties as to, 130 statutory report to be forwarded to members, 130 Stock Exchange requirements as to, 413 subscription, liability for interest on returned, 49 undertaking by, to be delivered to registrar, 7, 45, 144 unlimited liability of, 17, 156 winding-up, on, 258 vacation of office, 147 what are, 142 winding-up of company, how affects powers of, 234, 235 Discount balance sheet, disclosure in, 98, 99, 178 debentures issued at a, how shown in accounts, 99 how far legal, 98 illegal issue of shares at, effect on allottee, 39 issues of shares at, 39, 97 ef seq., 173 liability on illegal issue of shares at, 40 prospectus, disclosure in, 98 rescission, on illegal issue of shares at, 39 shares, issue of, at, 39, 97 éf seq, 173 written off, should be, 173 Dismissal company’s employees on a winding-up, 233 Dissentients Act of 1929, under s. 234 of, 23, 211, 214, 218 INDE? INDEX Dissentients—continued arbitration to fix price of shares, 215 articles cannot take away rights of, 214 fund to meet interests of, 216 liquidator’s powers, 215 notice of dissent by shareholder, 211, 27 price of shares if effectual, 216 rights of, 23, 214 class meetings, in case of modifications of rights by, 37, 14: Court, application to, by, 37 number necessary for application, 38 registrar, copy of order to be forwarded to, 38 shareholder, 211, 214 waiver of conditions by liquidator for benefit of, 214 Dissolution, 224, 268, 269 striking off register, by, 269 winding-up, on, 268 winding-up, without, on reconstruction under s. 153, 2.4 Distraint on property priority of debts in winding-up, 267 Distringas notice in lieu of, 65, 80, 81 payment of dividends prevented by, 80, 192 Dividend request, 192 form of, 474, 475 Dividend warrants, 174, 192 bank, same for large number of shareholders, 17; bills of exchange, are, 107 checking of, 174 cheque for payment issued by board, 175 paid, to special account at bank, 175 coupons, presentation and payment of, 192 dominion taxes, form of, 261, 262 duplicate, 176, 192 form of indemnity and request for, 192 examination of, 174 executors, how made out, in case of, 89 form, 192, 472 infant, issue of, to an, 107 joint holders, 192 lost, 176, 192 mislaid or lost, 176, 192 indemnity in case of, 176, 192 notice and dividend warrant subjoined, form of, 472 posting of, 175, 192 receipt from Post Office preparation of, 174 resolution of meeting sanctioning dividend, effect of. signing of, by secretary, - stamping and numbering Dividends, 22, 42, 174, 186 et dividends advertisement of payment of (shar amount payable, how determinec articles usually provide for, 22 may declare forfeiture of, 188 mode of payment, may authorise, must be 1m accordance with, -2~ J Capital ; Interesi, interim 912 Dividends—continued barred by statute, payment of, when, 187 bonus, 190. And see Bonus sharas capital account, payment out of credit balance, 190 capital and net profits, distinction between, 188 capital, interest payable out of, 186 Board of Trade’s sanction to, 186 capital, payment out of, illegal, 186, 188 even if authorised by memorandum or articles, 188 capitalisation of profits, 190 : cash, as to payment in, 187, 191 circulating capital to be made good prior to payment of, 18g what is, 189 cumulative, what are, 38 debt, tare, due from company, 187 declaration of, 186 directors, power of, to declare, 186 interim dividends, may declare, 187 liability, if payment out of capital, 188 due, when become, 187 fixed capital, effect of on, 189 what is, 189 forfeiture of, clause in articles as to, not illegal, but undesirable, 188 general meeting, power to declare may be vested in, 187 income tax, deduction of, from, 332 how arrived at, 332 particulars to be furnished, 332 preference dividends, as to, 332 infant, rights as to, 106, 107 guardian may receive, 107 must repay if shares repudiated on majority, 106 payment into Court when, 107 warrants may be issued to, 109 instalments, payable by, right to, vests immediately, 187 interest, whether bear, 187 interim, declaration of, 22, 187 joint holders, in case of, 42, 192 warrants, how sent in case of, 192 net profits, as to payment out of, 188 depreciation or loss, 188 notice in lieu of distringas may prevent payment of, 80, 192 payment of, 186, 338 resolution for, form, 162, 338 restrained by notice, 80, 192 post, may be sent by, 192 preferential, 38 profits available for distribution, 189 capitalisation of, 190 meaning of ‘ profits,” 188 request, form of, 192, 474, 475 preserved, should be, 192 reserve, provision for, 190. And see Reserve fund bonus out of, 190 may be formed before distribution of, 190 revenue, payable out of, or from net profits, 188 resolution to pay (directors) form of, 162 resolution to pay, form of minute of, 338 share warrants, pavment of. how provided for, in case of, 117 INDEX INDEX GI3 Dividends—continued shares not fully paid, 191 shareholder’s right in nominal capital, 187 dividends must be in accordance with memorandum articles, 187 source from which dividends payable, 188 statute of limitations, effect of, on, 197 unclaimed, 188 undivided profits, payable out of, 190 warrants, 191. And see Dividend warrants form of, 472 withheld, articles may authorise dividends to be, 8¢ Divorced woman description, in transfer Document company’s name on, director signing, 14 meaning of word, : ‘ Documents ’ list of, to be filed with registrar, 399-401 Dominions Overseas Company Legislation, 31g Dominion income tax, 326-329 relief in respect of United Kingdom tax, rate of, 327 how arrived at, 329 United Kingdom tax, adjustments on reduced deduction, 32g Dominion register, 1o1 foreign country, in, 101 Double taxation. See Taxation Duplicate certificate, 79 Duplicate share warrants, 114 Duplicate transfer, 79 or - Ecclesiastical persons cannot be directors, 143 Employees director, of, cannot be auditor, 182 private companies, as members of, 288, 28a who are, 290 Employers liability policy duty on, 371 Equitable interests, 45 Estoppel against company. on issue of share certificate, 42 Evidence certificate of incorporation, how far, 9 certificate that company can commence business, change of names in register, 63 death, on, 88 liquidator, appointment of -: list of contributories, _=2 minute books, 141 offers for sale to public, 59 petition for reduction of capital, nature of, 35 probate, grant of, 85 register, of members, 100 share certificate. evidence of title, 42 914 Evidence—continued stamped instruments receivable in, 374 voting, chairman's declaration as to, 1 35, 160 Execution attestation by mark, 459 Scotland, in, 308 Execution creditors position of, in winding up, 248 Executor, 67, 83 et seq, 304 administrator of a deceased executor, 8 5 company may be appointed, 88 death of sole, effect on deceased shareholder’s title, 85 meetings, notices of, 85, 122 noting of, in representative capacity, dividend warrants, how made out, 8g probate exhibited, 89 quorum of, may act (in Scotland), 306 registration of, 84, 88, 89, 303 request, letter of, 87 to be placed on register, form, 462 sale by, of deceased’s shares, 89 Scottish company. See Scottish company statutory company, in case of, 303 title to shares, 85 transfer by, 67, 77, 303 grant of probate, etc., effect of, 76 Existing company meaning of, 1 Extraordinary general meeting convening of, 132 Extraordinary resolution, 125, 159 articles, copy of resolution to be annexed to, 161 books, disposal of in winding-up by company, 267 capital, increase of, by, 32 declaration of chairman as to result, 160 definition of, 125, 624 liquidator summoning meeting in winding-up, 255 may authorise liquidator to compromise with creditors, 240 notice that resolution is to be an, 126 form of, 126 poll demanded, 160 registrar, copy to be forwarded to, 161 voluntary winding-up, by, 2371 what constitutes an, 125, 159 wind-up, to, form of, 163 Extra vires.’ Sze ‘ Ultra vires’ INDEX Fees directors, 146 action to recover, 146 income tax on, 146, 330 proof for, in winding-up, 146 recovery of, by company, 148 documents, chargeable by company for, gc joint holdings, proof of death in. go marriage, proof of. ao INDEX Fees—continued power of attorney, go probates, for Scottish and Irish, 86, 87 register, for inspecting, 99 registration, go registration, on, 8 increase of share capital after first, 381 other documents on, duty on, 382 registration of mortgages, bonds and debentures, ;72 registration of transfers, on, go statutory company, 302 share warrants, for, 115 transfer and registration, collection of, 173 trustee in bankruptcy, appointment of, go Feme sole. See Married woman married women’s rights in property (Scotland), 207 Fictitious name application in, 56 Filing (office), 341-351 access to files, 341 only to authorised clerks, 341 agreements, 347 how to be filed, 347 alphabetical system, advantages of, 344 no index needed, 344 when superior to numerical system, 344 cabinet for filing, 345 transfer cases, 346 card index, 345 when useful, 345 central or departmental filing office, 342 merits of the two methods, 342 contracts, 347 best way to file, etc., 347 duplicates, as to, 347 originals, as to security of, 5.y correspondence, how should be filed, separate file of, covers for, 7-5 destruction of papers, etc., 340C in what cases desirable, :. permanent preservation, 3: documents, 348 duplicates, filing of, 347 equipment for office, _. filing cabinet, 345 filing office, 342 folders for correspondence, - index, when required, 344 card, 345 manuscript, 345 numerical system, part of, printed, when should be, insurance policies, as to filing, card system, by, 350 supplement to filing, 350 issue of documents from filing office, tempa1 letter copying books, 342 loose copies, 342 - veceipt for, J Jt tL 916 Filing—continued incoming and outgoing mail, 342 miscellaneous documents, 350 notice of changes of address, 349 numerical reference system, contents and examples, 34; amplification, when necessary, 343 merits of, 344 office equipment, 345 cabinet for filing, 345 office management, 341 copies of letters, how dealt with, 342 orders for dividend payments, 349 organisation of staff, 341 original documents, safety of, 347 outward letters, two copies of, desirable, 342 referencing, 343 register of inwards and outwards letters, 342 each kind of letter, how to be dealt with, 342, 343 registration department, as to filing in the, 348 correspondence, how generally filed, 349 length of time for retaining, 346 methods of filing and storing, 349 names of stock or shareholders, 349 separate indexing of each subject, 343, 345 single letters, of, 344 spare copies, as to, 342 storage rooms for old files, 351 control over, 351 sub-division of correspondence, 343 surrendered stock and share certificates, 350 systems of, 343, 344 title deeds, 348 alphabetical index of, desirable, 348 method of safeguarding, 348 security of, essential, 348 transfer cases for filing cabinets, 346 correspondence periodically placed, 346 endorsement of contents, 347 ‘main ’ folders, 347 size of, 347 transfer deeds, as to, 349 Finance Act, 1927, s. 55, 210, 355, 813 ef seq. (App. L) conditions to be complied with, 210 relief from stamp duty under, 210, 355 Financial assistance provision of, for purchase of its own shares, illegal, 40 Fixed capital what is, 189 Fixed charge, 194, 197 debentures secured by, 194 when given, 197 Floating charge, 194, 197 debentures holders rights against creditors, 198 mortgages in priority to, 197 preferential creditors, postponement to, 198 purpose of, 197 what is a, 197 winding-up, if given shortly before a. 252 INDEX INDEX Floating charge (Scotland), 310 Foreign bearer securities duty on, 360, 361 Foreign bills of exchange, 365 Foreign branches, 169 accounts in connection with, 169 systems of accounting, 169 Foreign company, 5, 315 ef seq. application form, issue of, 3i1c¢ balance sheet, 316 translation of, 316 business, place of, in England, 3» ceasing to have, 318 charges, registration of, 200, 318 circulars, etc., particulars of directors in. land, power to hold, 318 limited liability, statement as to, 317 name, etc., to be exhibited, 317 colourable imitation of, may sue for offers for sale of shares, etc., 319 prospectus, issue of, 318 conditions to be complied with, 318 reconstruction scheme, sale to on, 211 registrar, documents to be delivered to, * alterations, particulars of, 315 balance sheet, 315 constitution, documents defining, directors, list of, 315 service, name and address of person authorised to accer service of documents, 317 wound up, when may be, 320 Foreign investments taxation of, 326 Foreign municipal body or corporation marketable securities issued by, duty on, 359 Foreign probates, 87 Foreigner may be a subscriber, 8 Forfeiture of shares, 24, 41, ¢, action against company for, 24 annulment of, 94 articles of association should authorise, 93 terms to be carefully observed, 93 where no power, sanction of Court necessary, 93 calls, liability for, how affected by, 94 debts, none for, other than calls, 93 directors may annul, 94 directors’ resolution for, form of, 162 irregularity in power of, will render forfeiture invalid, 93 slight, may render forfeiture invalid, 94 membership of company ceases on, 41 not disturbed by Court if bona fide, 94 payment into Court of money due on call, how affected by, reduction of capital without sanction of Court, by means of. - resolution of board, form of, 94 setting aside by member, g4 surrender of shares, whether amount: Forged powers of attornev. 2R= 918 Forged transfers, 83, 286 compensation for, 83, 286 Forged Transfers Acts, 83, 286 Forms table of, App. F. 431 ef seq Fractional certificate form of, 43, 442 France mmtroduction of shares, etc., into, 429 parquet,’ the, 430 Fraud powers of attorney, as to, 285 Fraudulent preference, 248 Fraudylent evasion of stamp duty, 378 bankruptcy law applies in, 248 what constitutes a, 248 INDEX General words in memorandum, 15 Gift ‘inter vivos’ stamp duty on, 358, 376, 390 Goodwill prospectus must state payment for, 775 Guarantee companies, 3, 4 amounts guaranteed, nature of, 4 characteristics of, 3, 4 duty on registration by, not having share capital, 381 “limited,” word, may be dispensed with, 4 memorandum of association of, 10 private company, limited by guarantee, 289 share capital. having, must hold statutory meeting, 129 Heritable estate (Scotland) married women’s rights over, 307 Heritage security over (Scotland), 311 Holder of order for goods meaning of, 14 Husband rights in wife’s property (Scotland), 307 witnessing wife's signature on a transfer, 77 Identity certificate of, 88 Ilegality of objects, 6 Illiteracy of party to transfer, 77 Scottish Companies, 308 Implied powers of company, 17 Impressed stamps on instruments when denoted bv, 352. And see Stamp duty INDEX 0YIQ Imprest funds, 167 ¢ Incidental or conducive ’ (objects clause in memorandum of association), meaning of, 17 Income tax. And see Taxation abroad, premises situate, 323 accounts, period of, 332 allowances on taxation, 325 annual accounts a basis for, 3° appeals in respect of, 330 bad debts, 326 capital nature, profits of a, 325 charities and donations by company, 325 companies on issuing dividend warrants, etc., to furnish statement of amounts paid, etc., 332 completion of agreed on figures, 322 debenture interest, as to deduction of tax, 332 debentures, expense of issuing, 326 deductions in computing liability, 325 interest subjected to tax, 324 losses on removal, bad debts, etc., 326 machinery to replace other worn out, 323 mills, factories, etc., 323 premises abroad, 323 salaries, as to, 330 depreciation of premises, 324 dividends, deduction of tax from, 332. And see Dividend. Dominion Tax, relief from United Kingdom tax, 326 basis on which granted, 32q how rate arrived at, 327 rate of, 327 relief, how to obtain, 328 specimen form of particulars furnished, 328 exhaustion of natural assets, 326 factories closed or removed, 326 foreign investments, 324 foreign premises, 323 foreign taxation allowable, 326 inspector, what documents usually furnished to, 3zi interest subjected to tax, 324 amount, what to consist of, 324 return as to, who to furnish, 324 law charges, 325 liability for, return how prepared, 321 new businesses, in case of, 22 premises abroad, 323 profit how computed, mortgage interest, 323 period of accounts for computing, 322 preference dividends, arrears of, rate - profit, additions to trading profit, deductions from, 323 profits for actual year, relief in respect of realisation of assets, 325 relief, 330 reserve funds, sums allotted to, 3z. reserves for leasehold redemption, return of salaries by secretary, 2--form of, 2zc 920 INDEX Income tax—continued returns furnished by company, what now usually consist of, 321 procedure in furnishing, 321 revenue, renewals charged against, 325 royalties on patents, 323 salaries, statutory return of, 330 deduction on tax on, 331 what should include, 331 secretary’s duty in furnishing returns for, 322 salaries of company’s employees, return of, 330 trade subscriptions on, 325 wear and tear allowance, 323, 324 Incorporation certificate of, 9 how far evidence, 9 Increase of capital, 31, 32 articles must authorise, 31 duty payable on, 32 for registration after first registration, 381 general meeting, must be effected in, 32 ordinary resolution may be sufficient authority for, 32 preference shares, issue of, on, 32 resolutions for, 32 nature of new shares to be defined, 161 rights fixed by memorandum cannot be prejudiced on, 32 Indemnity declaration and ; for duplicate certificate; form of, 43, 444 Indemnity and request for duplicate dividend warrant, 43, 192 form of, 469 Index. And see Filing Act of 1929, compulsory under, 65 annual return, annexed to, 102 card, 66, 345 loose leaf, 65 Index to share register, 65 India Companies Acts in, 850 Infants action to recover dividends of, 107 allotment of shares to, not desirable, 57 if knowingly, amounts to misfeasance, 57 application in name of, 56 articles often prohibit registration of, 105 calls on shares, liability for, 108 company cannot be compelled to register, 105, 108 may be estopped by laches, 106, 108 may be holder of shares in, 104 current account at bank, may have, 107 dividends, rights, etc., as to, 106 gas company, shares in, 107 guardian, may be paid to, under order of Court, 107 must repay if repudiates shares, 106 laches of company after discovering shareholder is an infant, 106, 108 memorandum of association, subscriber to, 104 overdraft at bank of, 107 payment into Court of dividend if action brought, 107 power of attornev, cannot give a, 271 INDEX or Infants—continued rectification of register in cases of, 105 register, should not be entered on, 70 may be rectified if discovered shareholder an infant, 1035 repudiation by company on registering, 105 repudiation of contract to take shares, ~7 shares may be held by, 104 statutory company, transfer of shares to, in a, 105 rights of voting in, 104 transfer by, 106, 109 order of Court required, 108 voidable, 106, 109 transfer to, 69, 70, 106 voidable, 106 voting rights of, 106, 108 warrants, issue of dividend warrants 1. Injunction director, excluding from acting as, to restrain, registration of name, against, 13 shareholder may apply for, to restrain scheme, Inland Revenue circular relating to stamp duties, 77, 38F--adjudication of stamp duty, 303 Inland Revenue commissioners adjudication stamps, 353 compounding stamp duty, authority for. evidence, instruments duly stamped as. opinion of, on stamping of instruments on voluntary gifts inter vivos, 358 statement of capital of corporations sent to, when company nof registered, 355 Inspection address book (Statutory Companies), 300 auditors’ report, 180 minute books, 141, 337 register of mortgages, 202 Statutory Companies register, - Insurance. See Stamp duty life policy, stamp duty on assignment mutual company, 3 policy, how filed, 350 policy, stamp duties on, 367-372. /#%d see Stampreferential payment in winding-*1-Interest capital, payable out overdue calls, on, 2 returnable monies, on taxation of, 324 Interim dividends, z. directors may decla Interpretation power of attorney. Intestate duty on transfer of propo - Ireland Northern, law in force in, 2 resealing of English or Scottish probates. in, fees pavable on. 86 TC 922 Ireland—continued winding-up of company in Northern, 320 Issue of shares discount, at a, 39 “in this country,” what constitutes, 363 new, 54 how notified to shareholders, 55 new, Stock Exchange requirements as to, 422 over-subscribed, 172 private companies, in case of, 291 public, commencement of business, 44, 47 public underwriting commission, 95 ‘Issued capital,’ 31 INDEX Joint account, 63 death of holder in, 42, 88 notices to first named holder, 42, 80 Joint shareholders, 42 bodies corporate, 42 death of, 42, 88 dividends, to whom payable, in case of, 42 liability of, 42 notices to whom given, 42, 80, 122 registration of shares in names of, 42 registration of survivor, of shares in Scottish companies, 308 split holdings, all must join in application for, 63 transfer of shares in case of, 42, 77 transfer to, notice of, 75 Joint stock company. See Company registration requirements, 715 Journal. See Accounts ‘Knowingly’ . meaning of, 50 Land companies registered under Act of 1929, may hold, 9 foreign companies, power to hold, 318 holding by associations not for profit, 9 powers of attorney relating to. filing of, 278 Land registry powers of attorney, filing in, 278 Law of Property Act, 1925 (App. M), 817 : corporation aggregate, execution of deeds by, 817% may appoint agent on its behalf, 817 power of attorney, attestation of deeds by, 817 corporation sole, 818 ‘ instrument, etc.” definition of certain terms in, 12% married infant. receipt for dividends. 107 INDEX Law of Property Act, 1925—continued mortgager, remedies of under, 196, 205 subsequent, notice of prior charge, 197 provisions as to execution of instruments, 153 provisions as to power of attorney, 271, 276, 278, 281 “purchaser,” definition of, 74 receiver, power to appoint under, 196 Lease may be a security in Scotland, 311 Leasehold property possession of, by liquidator, 242 disclaimer of, where onerous covenants, 243 Ledger. See Accounts. Legacy stamp duty on transfer of - Legal expenses allowance on taxation, Legal interest transfer of shares in statutory companies, when passes, 302 Letter of request, 87 form of, 462 Letters allotment and regret, 53 et seq. allotment duty on, 55, 357, 383, 588 indemnity and request, 43, 192 renunciation, 53, 357, 383, 388 form of, 477 Liability, reserve, 43 Liability, shareholders’ increase of, to contribute to share capital, by alteration of memorandum or articles, not binding, 43 Licence Board of Trade, of, dispensing with word ‘ limited,” 4, 10 land, holding, 9g Lien, 24, 64, 93 articles usually provide for, gcompany can sue for, 24 on company’s books (in winding-up), 2471 on shares, 93 notice of, company receiving, 64 form of reply to bankers, etc., 466 solicitors’ on company's book ; effect on liquidator, Stock exchange requirements as to, 93, 413 transfers of shares, how affected by, 93 insurance policy. definition of, 370 duty on, 371 Limitation of liability clause. 17 ‘Limited,’ abbreviated form ‘ Ltd." permissible, ° dispensing with use of word, 4, 10. 12 memorandum must contain word, penalty for improper use of word. penalty for improper use of word, 72 Statutory companies do not use wort Limited liability fate of first application to comnanie bn 024 Liquidation. See Winding-up ; Liquidator Liquidator, 227 ef seg. And see Voluntary winding-up ; Winding-up account, final, for general meeting, 266 form of, 266 accounts, keeping of, 244 to be laid before meeting of company, 256, 266 actions in name of company, 240 additional, 266 agent of company, in position of, 239, 242, 264 agents, may employ, 240, 247 applications to the Court, 230, 232, 263 by contributories and creditors, 263 for company’s nominee to be liquidator, in creditor's voluntary winding-up, 235 nature of, 263 stay of action, for, 238, 250 when may be made, 263 appointment of (voluntary winding-up), 232 by Court, 265 creditors’ voluntary winding-up, in, 235 evidence of, go, 232 members’ voluntary winding-up, in, 234 more than one may be appointed, 233 not in creditor’s voluntary winding-up, 235 statutory declaration as to, 232 registrar, notice to be delivered to, 241 assets, distribution of, 258, 262 principles of, 262 priority in, 258 assets mortgaged to debenture holders, position of, 251 assets, disposal of surplus, 262 assets, purchase of, by, forbidden, 238 audit of accounts, 256 balance orders, 254 bankruptcy of, vacates office, 266 bankruptcy of contributory, proof in, 240 Board of Trade control over, 256 et seq. accounts, may enforce audit of, 256 criminal proceedings, costs of, when borne by, 257 release of liquidator by, 228 returns to be made to, 256 unclaimed assets, particulars of, to be given to, 256 book debts of company, how far control over, 242, 246 books of company, possession of, by, 241 disposal of, meeting may determine, 267 duty to see carefully into existence, etc., of, 241 lien, if anyone has a duty to remove, etc., 241 borrowing money, Court sanction desirable for, 246 broker, may employ, 247 business, carrying on company’s, 239, 245, 265 application to Court for, 245 beneficial winding-up, necessary for, 245, 265 debts incurred in course of, 246 what involved in, right to, 246 what precautions necessary, 265 calls, power to make, 240, 252, 262 care in managing companv’s affairs, 26x INDEX INDEX Liquidator—-continued committee of inspection may nominate, 235. And see Voluntary winding-up may call meetings of, 236 compromise, power to, 240 sanctions to be obtained, 240 contract made by, 239 contracts should be in name of company, 264 contributories, settles list of, 240, 252. And see Contributories definition of, 253 enforcing payment, 254 list to be prima facie evidence of liability, - 33 rights, adjusting, 262 settling lists, 252 corporation, cannot be, 227 costs of, 258 Court, application to, as to remuneration, 237 generally, 263 Court, appointment of, by, 265 principle on which Court acts, 265 Court, power to summon meetings, »-private examination by, 247 creditors, annual meeting of, 256 criminal offences, in case of, must report to Public Prosecutor, . death of, 266 debts, power to pay, 240 proof of, 249 duty in case of, 249 recovery of, 246 destruction of company’s books, 268 directors, how far resemble, 239 power of liquidator to prosecute disclaimer of onerous property, 24> dissolution of company, 268 distribution of property among members, assets, of, 258 duty, on, 258 first payments, 258 priorities of debts, on, 2. taxation of solicitor’s bill, draw bills, power to, 240 duties of, 241, 265 evidence of appointment of, go, final proceedings duties on, 266 books, disposal of, 267, 268 creditors’ meeting to be convened in creditors winding-up, 267 first step, 266 general meeting to be convened, 267 notices to shareholders and creditors, 267 floating charges created shortly before liquidation, .4. fraudulent preference, 248 bankruptcy law applicable to, z4: onus of proof on, 248 question if a transaction is a, one of fact, should apply to Court if doubtful, 248 general meetings, may summon, 240, ~55 icecounts to be laid before 268 "25 \/ 926 Liquidator—continued destruction of company’s books may be decided on, 268 duty at, 268 must summon at end of each year, 2535 notice of, to be advertised in Gazette, 267 property of company, decides as to, 268 resolutions at, 268 return to registrar of holding, 268 gifts, etc., from solicitor, auctioneer, etc., may not accept, 237 joint liquidators, powers of, 237 leasehold property, taking possession in case of, 243 may disclaim, 243 letters of administration, power to take out, 240 liability of, 264 how differs from a trustee, 264 in carrying on company’s business, 264 solicitor, employment of, 264 liquidation account, 256 investment of funds, 256 lists of contributories, 252 capital not fully paid, if, 253 date for settling, 252 evidence of liability when settled, 253 two lists, 253 meeting, power to call general, 240, 255 creditors, of, in creditors’ voluntary winding-up, 256 desirable, when, 2535 direction by Court, 256 notices in writing, 255 when may be necessary, 255 year, must be summoned every, 255 memorandum and articles, provision for surplus assets, 263 misconduct of, 239, 240, 264 misfeasance proceeding against, 239, 240 misfeasance proceedings, may institute, 240, 247 object of, 247 mortgage on company’s property, how affects liquidator, 242 negligence of, 239, 264 office of, vacancies in, 234, 235, 266 Court may fill up, 266 creditors may fill up in case of creditors’ voluntary winding-up, 235 general meeting may fill up, in case of member's voluntary winding-up, 234 official receiver as provisional, 228 statement of affairs to, 229 report by, in compulsory winding-up, 229 not in voluntary winding-up, 235 onerous property, disclaimer of, 243 leave of Court necessary for, 243 notice of to be given, 243 order of payment off, 258-263 paid-up capital paid off first, 262 payment of debts, priority of, 258 ef seq. Crown has no priority, 259 periodical statements to be sent to registrar, 245, 256 personal liability of, 264 position of, 239 INDEX INDEX Liquidator—continued possession of company’s books, 241 lien existing on, 241 possession of other property, 242 how obtained, 242 leasehold property, as to, 242 mortgages or receivers, in case of property held by, 242 onerous property, may disclaim, 242 powers of, 240 actions, bring or defend, 240 carry on business, 240 custody of property, 240 preferential payments, 259 contributions as to insurance, etc., 260 order of priority of creditors, 258 et seq salaries of clerks and servants, 259, 261 private examination, application to Court for, when, 247 productions of books to, 247 proof of debts, 249 admission by, 249 advertisement for creditors to prove, 249 affidavit, proof to be by, 250 appeal by rejected creditor, 250 application to Court to expunge improperly admitted, 250 Court, may apply to on disputed claims, 250 disputed claims, how dealt with, 250 fix time for proving, Court may, 251 grounds of rejection to be stated, 250 moral claim, must not admit if merely, 250 notice to creditors to be advertised, 249 rejection by, 250 secured creditor, as to, 251 property, taking poassession of, 242 company’s, purchase by, forbidden, 238 prosecution of delinquent directors, etc. (voluntary winding-up), 257 costs of, how borne, provisional, 228 Official Receiver may be, 227 Public Prosecutor, report to, 237 purchase of company’s assets by, forbidden, 238 reconstruction, on, 211 registrar, notice of appointment to, 241 periodical returns to, 245, 256 solvency, declaration of, delivery to, in case of members voluntary winding-up, 231 removal of, 265 by Court, 265 ‘cause ’ to be shewn, 263 contributories or creditors may apply for, 265 principles on which Court acts, 265 vacancies in office of, 234, 235, 266 remuneration, 237 Court may determine account, 237 creditor's voluntary winding-up, fixed by committee of inspection or creditors, 237 members’ voluntary winding-up, fixed by company in general meeting, ~~ 928 Liquidator—continued sharing of, arrangement for, with solicitor, auctioneer, etc. forbidden, 238 is an ‘expense ’ in the winding-up, 258 sale by, of property of company on reconstruction, 211 may sell whole or part, 211 notice of dissent to, 211, 214 shares in new company, allotment of, 211 summons meetings of creditors in case of creditors’ voluntary winding-up, 212 taking partly paid share in his name, 213 underwriting agreements, 217 sale by, of property on winding-up, 240, 246 seal, use of company’s, 240 secretary of company, may be, 232 secured creditors, 251 bankruptcy law applies to, 251 courses open to, 251 duty of liquidator regarding, 251 floating charges recently created, 252 validity of security must be enquired into, 252 who usually are in liquidation, 251 off contributory, none by, in winding up, 255 secus, when a bankrupt, 255 what is a, 254 Sheriff, goods seized by, delivery of to, 249 solicitor, employment of, 240, 264 liability, if employs, 264 taxation of bill of, 258 stamp duties, must pay, 378 stamp duty in voluntary winding-up,to be paid by, 378 statements by, to be delivered to registrar. at prescribed periods, 245, 256 . status of, 239 supervision, winding-up under, 230 trustee, how far a, 239, 264 underwriting agreements on reconstruction, 217 unpaid capital, may call up, 240, 252, 262 vacancy in office of, 234, 235, 266 voluntary winding-up, in a, 231 ef seq. Court, not an officer of the, 239 Loan capital. See Stamp Duty Acts charging duty on, 356 consolidation of, and of nominal capital, difference between, 356 definition of, 356 duty on, by whom payable, 356 when need not be charged, 356 fees payable on issue, 383 foreign companies, etc., 359 how secured, 292 } issue of, whether conversion, etc., of loan capital is an, 356 premium, repayable at a, duty on, 362 Loan duty on transfers as security for, 391 Loans ; Stock Exchange regulations as to, 421 INDEX INDEX 20 Local laws powers of attorney governed by, 276 Loose-leaf register, 65 Lunacy, 89 Machinery taxation of, 323 Majority minority, articles if altered must not be oppressive to, zy powers of, over minority under debenture trust deeds, 195 reconstruction, on winding-up for purposes of, 213 Manager. See Receiver Managing director not a ‘ clerk or servant ’ within s. 264 of Act of 1929, 261 private company, whether ‘in employ of company’ in, "3 what is a, 142 Mandamus registrar may be compelled to register by Manitoba company legislation in, 835 Mark. And see Execution execution by, not valid in Scotland, 308 form of attestation where deed executed by, 459 ‘Marketable securities’ definition of, 363 duty on, 359. And Marriage of female shareholder, 6-Married woman memorandum of association, may subscribe to, Scottish companies, contracts of, in, 307 feme sole, to have same rights as a, 307 heritable estate, rights as to her, 307 husband’s right of administration of property of, abolished, 07 husband's execution, of transfer of shares, not necesss ~ husband not liable for her contracts, 307 may sue and be sued as if unmarried, 307 Meetings, See also Annual general meeting; Ordinarv meeting ; Statutory meeting adjourned, 140 annual general, 1%I1 board. See Board meeting creditors, annual, 255 creditors, of, in creditors’ voluntary winding up, 234 matters determined at, 234 debenture holders, of, 195 final, in winding up, 266 general, to cancel shares, 32 to consolidate shares, 32 to convert shares into stock and reconvert, to increase capital, 32 to subdivide shares, : invalid, when, 123, 158 liquidation, in, 255, 266 accounts to be laid before, 255, 266 notice of, in writing to be given. - meaning of 128 4 y 930 Meetings—continued notice of, 119-127. And see Notices of meeting special business if mentioned, nature of, to be stated in, 124 form of, 125, 126 special or extraordinary resolutions, notice of, should be carefully framed, 125 statutory, 119, 122, 129. And see Statutory meeting statutory company, 299 statutory, notice of, 122 voting at, 135. And see Votes who may convene a, 132 Meetings of shareholders adjoyrnment of, 128, 240, 256 chairman’s powers, 140 resolution at, when deemed passed, 128, 240 statutory meeting, 130 what is, 140 amendments proposed at, 134, 163, 339 how treated as regards original resolution, 339 motion for, how should be minuted, 339 proposed but no seconder, 339 auditor may attend, 184 borrowing powers of directors, control of, over, 193 chairman of, 134. And see Chairman articles usually provide concerning, 134 duties, 134 election of, 134 class meetings, 140 dissentients at, rights of, 141 classes of shareholders, voting by, 37, 38, 135, 140 convening, powers of, in whom vested, 132 court, when may be convened by, 132 director voting at, 135 dissolution of, 140 extraordinary general, convening of, by requisition, 133 list of names at statutory meeting, 130 members may themselves convene, 133 minutes, secretary should keep, 141. And see Minutes evidence after signing by chairman, 141 procedure at, 337 et seq. reading of, at succeeding meeting, 335 poll, voting by, 135. And see Poll proxies, 158 et seq. And see Proxies quorum, 134 reading minutes of preceding meeting, 335 reconstruction scheme under s. 234, 212 representative of another company voting at, 136 requisitioning a meeting, 133 default in holding, 134 procedure for, 133 provisions as to, cannot be excluded by articles, 24 who may, 133 seconder, where none on a proposed amendment, 339 secretary’s duties as to convening, 132 should not convene without authority, 132 show of hands, voting on a, 135 signing names at, desirability of, 135 single shareholder, whether can constitute a. 128 INDEX INDEX 331 Meetings of shareholders—continued statutory companies, in case of, 299 voting at, 135. And see Votes who may convene, 132 Member, 41. And see Shareholder administration of deceased, proof in by company, 6: annual list, contents, etc., 101 annual list of, to be forwarded to registrar, 102 articles of association, how far affect members infer . bankruptcy of, 89 ceases to be a, when, 41 company, relations to, 24 copy of articles of association, entitled to, 30 death of, 37, 42, 83 evidence, 85, 88 personal representatives, transfer of shares by, on, statutory company, in case of, 303 table A, provisions in, as to, 84 transmission of shares on, 37, 42, 83 ef ses deceased, estate of, pending transfer, 84 definition of, 41, 579 private company, of. See Private Companies reduction below two, 290, 292 dominion register, 101 register of, 99 ef seq. entry on, necessary to constitute a, 41 inspection of, 99, 100 rectification of, 100 rights of, inter se, 24 Scotland, in. See Scottish company who may become, 41 winding-up, liability in, 253 Memorandum of Association, 6, 7, 8, 10 ef seq. alterations of shareholder's rights on a reconstruction scheme ii fixed by, 213 alterations to, 17, 31 ef seq. copies to accord with, 30, 32 increasing liability of members. invalid, 43 objects clause, 18 restrictions on, 18 articles of association, how differ from, 11 in case of inconsistency, 27 assets, may provide for distribution of surplus, 263 attestation of (Scottish companies), 314 borrowing powers of company, fixed by, 193 capital, need not authorise increase of, 31 reduction of, as to power of, 34-36 capital of company to be stated in, 10, 3I cash, subscribers to, need not pay for shares in, . Companies Act, 1929, provisions as to, 571 forms in First Schedule, 758, 759, 768, 769, 770 copy of, members entitled to, 30 distribution of assets on a winding-up, 262 dividends out of capital cannot be authorised by. 38 functions of, 11 general words in, 16 guarantee company, in case of, 10, 759, 768 increase of capital of companv need not be authorised by, 31 \ 932 Memorandum of Association—continued infant subscriber to is a ‘ person ’ within s. 1 of Act of 1929, 104 members of a company, subscribers to, become, 41 modification of rights, provision for, in, 32 name of company. See Name of Company nature of, 11 objects clause in, 15-17. And see Objects of Company alteration of, how obtained, 18 preference shares, can be issued unless forbidden by, 32 private companies, subscribers in case of, 289 prospectus must state contents of, 775 reconstruction schemes under powers in, 219 registrar, delivery to, 7 registration of, 9 effect of, 9 sales of Company’s property authorised by, as to, 220 schemes of arrangement, shareholders’ rights when fixed by, 213, 214 . shareholders’ rights fixed by, alteration of, 214, 222 stamp on, 6, 8, 354 subscribers to, 6, 41 aliens, corporations, married women, etc., 8 allotment of shares to, 8 interest in company not necessary, 8 private companies, in case of, 6, 289 unlimited company, in case of an, 10, 770 who may subscribe to, 8 winding up, distribution of assets on a, provided for, when, 263 ‘ surplus assets,” provision for, 263 Memorandum of satisfaction, zo4 Mineral seams allowance for exhaustion from income tax, 326 Minimum subscription, 45 ef seq. Act of 1908, under, object of, 46 Act of 1929, alteration of law by, 46 allotment, none before receipt of, 46, 48 avoidance of contract, 49 notice, 49 cheque, acceptance of, 46 compensation for issue of shares before, 49 directors liable if allotment made before, 49 ‘ knowingly,” meaning of, in case of illegal act of directors, 50 prospectus, stated in, 46 public issue, not required where no, 48 statutory declaration as to, 47 Minority alteration of company’s articles must not be oppressive to, 29 under debenture trust deeds, 195 Minutes, 141, 333. And see Agenda access to minute book, undesirable, 337 accounting transactions to be recorded by, 176 accuracy of, essential, 333 evidence afforded by, 333 agenda book, as to keeping, 334 alterations in, as to, 333, 3:5 how made, 335 initialing by chairman, 333 permissible. what are, 333 INDEX INDEX ~N7 = 9 Minutes—continued amendments to, 338. And see Amendments annual general meeting, form of first resolution at, 337 auditors, regarding appointment of, 338 board meetings, agenda for, prepared by secretary, 152, 334 cash position of company considered at, 153, 3 34 evidence of proceedings at, 141, 333 inspection of minute book, members not entitled to, 141 reason for keeping, 333 routine business at, 334 secretary’s duties at, 152, 333 books, entry in, 141 ‘carried unanimously ’ recording of chairman’s decision, 339 cash position, form of minutes for shewing, 336 chairman to sign, 141, 333, 335 evidence of proceedings, 336 voting by show of hands, as to, 339 ° committees appointed by board, as to, 336 companies obliged to keep, 333 ‘ confirmed,” use of word, 335 copies of, member's right to, 141 director dissenting, minuting of, 335 inspection of minute book by, 337 re-election, etc., of retiring, how minuted, -38 dissent of, 335 dividends, minute of resolution as -. evidence, how far, 141, 333 form of, 336 resolutions, forms of, 336, general meetings, of, 141, 337 evidence of proceedings at, forms of minutes at, 337 order of resolutions at, 338 resolutions, forms of, 338 inspection of minute book, 141 right of, by shareholders, 141 majority, recording of resolution carried by, 34c¢ motion, shareholder objecting to particular, 340 municipal authorities, in the case of, 335 ‘nem con,’ meaning of expression, 339 objecting shareholder, motion by, 340 public body, circulation of minutes, 335 reading of, at subsequent meeting, 333 reasons for resolutions, recording of, inadvisable, 337 recording of, in minute book amounts to evidence, 141 registered office, books must be kept at, 141 resolutions, minutes of, at general meetings, 337 when given majority required at, 340 secretary, as to recording of, 141, 223 agenda prepared by, 152, -- » alterations of, as to, 333, = , amendments to resolutions, chairman’s declaration on voting, 339 board meetings, prepares acens minutes to be written-up ou: notes of all proceedings, she... reading of, by, 335 writing-up of, accurarv ese~ '-” 934 Minutes—continued share transfers, form of minutes shewing, 336 shareholder objecting to particular motion, 340 votes, how minuted, 339 voting by show of hands, as to, 339 Misteasance proceedings, 240, 247 who may apply for, 247 Misrepresentation promoter, signatory induced to sign through, 8 setting aside transfer for, 68 Modification of Rights. See Dissentients articles, provision for, in, 37, 140 class meetings, 21, 37, 140 dissentients, rights of, 37, 141 memorandum, provision for in, 21, 32, 37 Mortgages, 193 ef seq. And see Debentures, Register of charges. ‘ charges,” included in word, 199 company to keep register of, 203 duty on registered mortgages, 382 liquidator, cannot interfere with, 242 registration of, 199 ef seq. Scotland, registration in, 312. And see Scottish Companies taxation of interest on, 323 Mortgage debenture stock certificate, 439 Mortgagee of shares, priority of, 64 transfer, filling up blank, 83 Mortmain, 9 Moveables creation of security over (Scotland), 311 INDEX ¢ Naked > debentures, 198 Scottish companies, 310 Name change of shareholder’s, 63 Name of Company Chamber of Commerce ’ as part of name, 13, 17 change in, how obtained, 17 documents (e.g. cheques, bills, etc.), to be written on, 13 foreign company may sue respecting colourable imitation, 13 particulars of name, etc., to be exhibited, 317 injunction, registration of, may be restrained by, 13 “ 1td.,” abbreviation of word ‘ limited,” held sufficient after name, 14 premises, to be painted or affixed on outside of, 13, 317 reconstruction, on, 213 registered office, to be placed on every, 13 registrar's discretion in determining, 12, 13 restrictions on, 12, 13 ' Royal,’ ‘ Imperial,” * Co-operative,’ etc., use of words, consent of Board of Trade required, 13 seal, to be engraven on, 13 statutory provisions as to, 12 ef seq., 576 et seq. Natal, .see South Africa (Union of), 851 National Health Insurance Acts, 1924 tq 1928 preferential payments under, 260 INDEX 335 Negotiable instrument certificate of shares, not a, 42 debenture to bearer is, 194, 198 name of company to be shown on, 13 ‘ Nem con.,” meaning of, 339 Net profits ’ capital and, 188 dividends out of, Ge Newfoundland company law in, 8:7 New issue. See Issue New South Wales company law in, 819 New Zealand company law in, 848 ‘ Nominal capital ’ meaning of, 31 Nominal consideration transfers for, 78 fees payable on, 391 Nomination, letter of. See Renunciation, letter of. Nominee signatory may be, 8 transfer to, 84 Notary public duty on protest by, 367 Notice avoidance of allotment, if minimum subscription not subscribed, 49 balance sheet, when accompanied by, length of, 121 blank transfer, purchaser how fixed with, 83 board meeting, of, 151. And see Board meetings; Notices of meetings Company, to, 15 consideration, on transfer for nominal, form, 78, 455 general heading of, 119 how addressed, 120 meetings of. See Notices of meetings refusal to register transfer, of, must be given, 67 ordinary, may be sent through post, 119 secretary’s duties as to, 119 signing of ordinary, 119 to transferor, 71, 75 Notice in lieu of distringas, 80 Notices of meetings, 119-127 abroad, shareholders residing, whether entitled to, 122 addresses, in case of, 123 addressing machine, 123 advertisement, by, 122 articles, provisions regarding, 120 contents of, provided by, 123 may qualify accidental omissions, etc., : secretary of company should consult, 12 bankrupt shareholders, in the case of, 122 bearer shares, holders may be entitled by advertisement, 1.2 board meetings, of, 151 contents and length of, 151 business to be transacted should be stated in classes of shareholders may be excluded. 1-J 936 Notices of Meetings—continued clear days, meaning of, 126 construction of, 124 contents of, 123 deceased shareholders, in the case of, 122 deemed to be served, when, 121 examples of, 124 executors, in case of, 122 exclusion from meetings, 121 extraordinary resolution, form of, 126 how may be served, 119, 122 individuals, notices to, how given, 120 ‘instrument,’ notice within definition of, in Law of Property Act, 1925, 127 irregularity in, shareholders may waive, 127 joint names, in case of, 122 length of notice, 126 special resolution, in case of, 121, 126, 159 liquidator, final meeting in winding-up, 267 advertisement, by, 267 extraordinary resolution, 267 month,” meaning of, 127 non-members, when given to, 122 omission to give may invalidate, 123 ordinary general meeting, 119 purpose of, must be stated in, 124 resolutions, accidental omissions or inadvertance may invalidate. INDEX [24 special or extraordinary, meaning of, 125, 126 secretary’s duties as to convening, 119 articles of association, should consult, 120 who entitled to receive, should ascertain, 121 shareholders abroad, not entitled to, 122 shareholders, who should receive, 121 special business, what is, 124 what notice should state, 125 special resolution, length of notice required for, 121, 126, 159 form of notice for, 126 statutory company, in case of a, 299 statutory meeting, 122. And see Statutory meeting form of notice for, 125 whether all members entitled to notice, 122 sufficiency of, 124 examples of, 124 Table A, provisions of, as to, 120 to whom sent, 121 who may be excluded, 121 Notices of restraint to party, on whose behalf lodged, 461 who lodged the notice, 461 Nova Scotia company law in, 838 Number of persons to carry on business maximum to be registered, 2 Objects clause alteration in, 18 INDEX ay Objects of company, 10, 15-17 alteration in, how accomplished, 18 cannot extend beyond those specified in memorandum, 15, IC general words only auxiliary to primary objects, ~5 ‘incidental or conducive,’ 16 must be clearly defined, 15 primary, failure of, 16 Offer for sale, 58 et seq. application forms in, 59 canvassing, house to house, prohibited company or firm, made by, 59 contract resulting from irregular, voia delivery to registrar, 59 foreign company, 318 house to house canvassing prohibited, penalties for irregularity, 61 prospectus, now deemed to be a, | not, under Act of 1908, 58 public,” meaning of, in s. 356 of Act of 1929, remedies of purchaser, 58 requirements in, 58 ‘ shares,” meaning of, in s. 356 of Act of 1923, .. signature of, 59 Stock Exchange, shares quoted on, 60 writing, offer in, 59 Office-bearers transfers by (Scottish companies). 306 Office management. See Filing Office of company. See Registered officchange of, 14 company’s name to be affixed, etc., to, 1 2 penalties for default, 671 service of writs, etc., at, 1,, - Official quotation Stock Exchange requirements for, ;12 et coc Official Receiver meaning of term, 65% petition for winding-up, presentation of, report by, 229 statement of affairs to be delivered .. .z0 stay of winding up on application ot, Ontario company legislation in, 839 Orange Free State, see South Africa (Union of), 851 Ordinary General meeting, 120, 124, 131, 237 And see Meetings minutes of, 337. 4nd see Minutes resolutions at, 337 forms, 337, 338 special business, resolution sh statutory company, of, 299 business to be trans notice, 29c¢ proxies anc Overriding commiss:. Outsiders articles of assn:.alion, how - ff" ~d Paid up’ er«itql 938 Parents application for shares, etc., for children, 56 Parol company may contract by, 154 transfer of shares by now prohibited, 68 Parochial, etc., rates priority in payment on a winding-up, 259 Partnership limitation of, 3 Scotland. See Scottish company transfers to, 76 Penaltios table of, under Act of 1929, 402-411 Personal property creation of security over, in Scotland, 311 shares are, 37, 599 Personal representatives. See Executor notices of meetings to, 122 registered, entitled to be in case of statutory companies, 304 transfers by, in case of statutory companies, 303 transfers by, valid though not members, 67 Petition alteration of objects of company by, 18 compulsory winding-up commenced by, 226 evidence on, for reduction of capital, 35 reduction of capital, procedure by, 34 et seq winding-up, for, 227 Petty cash, 167 170 nature of an imprest fund, 167 Policies of insurance duty on, 367-372. And see Insurance, Stamp duty Poll adjournment of meeting, taking of, is not, 138 articles, voting by, depends on, 21, 137 card vote, usually taken by, 114 chairman, rights of on a, 137 demand of, 137 number of persons demanding may be fixed, 137 how taken, 138 method of, 138 resolution, may be demanded on, 137, 160 scrutineers on a, 138 sliding scale, 137 voters should sign their names on a, 138 who may demand, 137, 160 Possession company’s property by liquidator, 241 Postage book examination by cashier, 167 Posting meaning of in completing contract, 57 Posting dividend warrants, 175, 192 meaning of, 57 Power of attorney, 74, 271 el seq. abroad, granted, 274, 276 abroad, for use, attestation by two witnesses, 273 attestation of, 273 attorney, death of, 282 INDEX INDEX js J Powers of attorney—continued signing in name of principal, 276 using power for his own purposes, 274 bankruptcy of attorney, 283 question of fact whether or not revokes, 283 bankruptcy of donor, 279, 281, 282 revokes power at common law, 282 third parties protected by statute, 282 capacity to grant, 271 companies, 272 infants, 271 lunatics, 273 married women, 271 personal representatives, 272 trustees, 271 Central Office, deposit in, see ‘filing’ companies, powers of delegation of, 272 consul, legalisation by, 274 ‘coupled with interest,” 284 death of donor, 282 if joint principal, 282 ‘disability,’ by lunacy, 279 by marriage of woman to foreigner, 2771 by-unsoundness of mind, 279 fee for registration, go filing in Central Office, 277 Forged Transfers Acts, protection under, 286 forgery, 285 form of, specially prescribed by companies, etc., 286 for verifying, see ‘statutory declaration’ fraud by attorney, 285 implied revocation, 280 infant, see capacity supra insanity of attorney, revokes the power, 282 insanity of donor, 282 appointment void in case of, 282 subsequent, does not operate against third party, 282 interpretation, 274 et seq. irrevocability under statutory provisions, 281 joint power, death of joint principal, 282 death of joint attorney, 282 land, powers relating to, 278 Land Registry, filing at, 278 Law of Property Act, 1925 s. 74, mode of execution by company, 277 5. 123, signature in name of principal, 276 S. 124, protection in case of revocable powers, 279 s. 125, powers dealing with land, 278 s. 126, powers given for valuable consideration, 281 5. 127, powers irrevocable for not exceeding one year, 281 §. 129, married women, 271 letters of administration granted to attorne liquidation of donor company, 283 lunatic, 273. And see disability, insani: married women. See Capacity, supra non-revocation. See Statutory declaration notarially certified, when should be. ~~ parol revocation. 280 940 Powers of attorney—continued partly exercised, 284 period of duration, 280, 281 personal representatives, can delegate ministerial powers, 272 probate granted to attorney, 279 production of power, 277 ‘property,’ definition of, 281 (n) ‘purchaser,’ definition of, 281 (n) ratification, ‘283 ratification on death of principal, 282 recitals control operative part, 275 register, note of production in, 65 registration, fee for, go revocation if instrument declared irrevocable for fixed time, 281 if given for valuable consideration, 281 if power not irrevocable, 280 implied, 280 joint attorneys, 282 joint principals, 282 parol, 280 partly exercised, 284 principal may demand return on, 277 scope of, 274 Scotland, registration in, 309 seal, should be under, 273 signature of donee, 276 by corporate body, 277 stamp on, 274 statutory declaration as to non-revocation, 279, 281 transfers by, 74 Trustee Act 1925, 271, 272, 278 ‘valuable consideration,’ definition of, 281 (n) trustees, See Capacity, supra ‘valuable consideration,’ definition of, 281 (n) who may grant. See Capacity, supra Preference shares alteration of articles to authorise, 28 balance sheets, entitled to copies of, 181 cumulative, generally, 38 increase of capital, may be issued on, 32 preferential right, nature of, 38 redeemable preference shares, 39 redemption of preference shares in statutory companies, 297 re-organisation of capital, position on, 34 statutory company in, 297 statutory meeting, notice of must be sent to holders, 122 statutory report, copy must be sent to holders, 130 stock (statutory companies), 297 surplus, assets, right to participate in, 38 variation of rights, 37 Preliminary expenses prospectus to state amount of, 745 Premium debentures issued at, 172 issue of shares at a, 40, 172 no authority needed for, 140 profit, mav be treated as, 40 INDEX INDEX ~ Premium—continued loans repayable at, duty on, 362 ‘ Previous question ’ motion for, 34¢ Priorities assets in winding-up, 258 Private companies, 5, 6, 7, 103, 110, 129, 181, 288 ef seq., 57¢ annual summary need not show balance sheet, qo what must be sent with, 292 appointment of directors, privileges as to, 144, articles of association of, contents, 6, 7 number of subscribers to, 289 private company becoming public company, alteration in. 291, 293 public company becoming a private companv auditor, partner or employee of director may be, .* balance sheet, need not circulate, 132, 181, 291 copy of, must supply on demand by member, ic bearer warrants, cannot issue, 110 ceasing to enjoy privileges of, 291 certificate that no invitation to public issued, 292 certificate as to exceeding statutory numbers, 292 commencing business, no restrictions as to, 291 commissions for subscriptions, 292 conditions necessary for, 29:2 Companies Act, 1907, meaning of, in, 288 Companies (Consolidation) Act, 1908, effect of, on, 288 Companies Act, 1929, meaning of, in, 288, 579 number of members fixed by, 288 default of, in complying with certain statutory restrictions, 291 definition of, 288 directors, discretion to refuse to register transfers of shares, 28q "employ of the company,’ as to whether are in the, 290 need not sign consent to act in case of, 291 discretion of registrar as to registering, 6 employees of company, as members, 289 who are ‘ persons in the employ of company,’ 289 guarantee, may be limited by, but must have share capital, 28g joint holders in, rank as single member, 289 liability of a member for whole debts, when, 290 limit on number, employees, how may be dealt with, 289 managing directors, whether are emplovees of company, 290 meaning of, 288 prior to Act of 1907. under Act of 1907, 288 members of, number, 6, 288 exceeding fifty, certificate as to reason number falling below limit, 2a0, ~ memorandum of association of, 6, number of subscribers, 6, 289 minimum subscription, need not have regard - pre-emption, right of, for existing membe private company becoming public, 293 automatic on alteration of articles, wt filing of statement in lieu of prospectus procedure for, 293 privileges of, 290 public, invitation to. prohibited h- 942 Private companies—continued certificate by director or secretary, 292 registrar of companies refusal if share warrants to bearer contemplated, 6, 289 registration of, 289 restrictions on transfers of shares, 7, 288, 289 secretary of, duties, 293 share capital, must have a, 289 shareholder’s right of preference, 289 shares, restrictions on right to transfer, 7, 288, 289 sole director, may have, 291 statement in lieu of prospectus need not be filed by, 291 statutory meeting, does not hold, 129, 290 statutory report, need not deliver, 290 transfer of shares by, restrictions on, 7, 288, 289 directors’ discretion to refuse, 289 two members, may be registered with, 289 unlimited company with a share capital, may be, 28g Private examination application to Court by liquidator for, 247 Probate, 84 ef seq. colonial, 85 exhibited, in cases of executors on register, 89 fees on registration of, go foreign, 87 Irish, 86 Scottish, 86 Process service of, on Scottish company, 15, 314 who may accept service of, 15 Profit companies not formed for purposes of, 4, 9, 177 Profit and loss account, 177 Profits, 38, 188, 322 capitalisation of, 190. And see Capitalisation of profits dividends payable out of, 38, 188 income tax, computing for, 322 ; additions and deductions to trading profit, 322, 323 capital nature, 325 ‘net,’ dividends payable out of, 188 realisation of assets, on, 190, 325 Promissory note duty on, 364, 386. And see Bills of exchange name of company on, 13 Promoter commissions, payment of, 96 examination of in winding-up, 247 liability for statements in prospectus, 45 meaning of term (in s. 37), 585 prospectus to state amounts paid to, 96, 776 Prospectus, 44 et seq., 775 amount on application, minimum payable, to apply to subsequent issues, 50 application forms must be accompanied by, 52 auditors’ names to appear in, 182, 777 commissions, must disclose, 96, 776 contracts, must state particulars, of, 776 dated, must be, 45 INDEX INDEX "13 Prospectus—continued definition of, 44, 740 directors’ addresses to appear in, 775 copy signed by, to be delivered to registrar, 43 interest of, in promotion, to appear in, 777 liability for mis-statements in. ~ named in, 7 qualifications of, to anpesigning of, 45 shares to be paid for, foreign company, 318 issue of, what is, 45 memorandum, must state contents of, 775 minimum subscription, 46, 775. And see Minimum subscription offer for sale, when deemed to be a, 58 ‘offer to the public,” what is an, 45, 52, particulars, to be set out, 45, 775 et seq. preliminary expenses, to state amount of, 775 registrar’s certificate, 47 registration, copy delivered for, 4+ reports to be set out in, 777 requirements, 44 et seq., 775 resolution of directors to issue, form of, 161 statement in lieu of, 47. See Statement in lieu of prospectus delivery to registrar, 47 form of, 779 form of, on private company becoming public, 772 not in case of private company, 291 statutory declaration as to, to be filed by secretary statutory requirements of company which issues a, 4: underwriting commissions should be stated in, qh Protest by notary stamp duty on, 367 Proxies, 21, 136, 138 et seq. articles usually determine, 138 blank, may be signed in, 139 class meetings under s. 153 of Act of 1929, 139 company’s regulations provide for, 138 creditors’ meeting at commencement of voluntary winding-up, 234 execution of, name inserted after, 1 39 extraordinary resolutions, may be used for, t5¢ filling up, implied authority for, 139 funds of company may be used in sending out show of hands not counted on, 136 stamp duty on, 139, 140 before execution, when, 7 «-stamps on, 140 must be cancelled, 140 statutory companies’ meetings, 13, who may hold, 139 Public, 45, 52, 60 meaning of, in, s. 356 of Act uv; *~ Public body minutes of, 225 Public company becoming private, 293 Public issue. See Issue of shares 944 Public Trustee how registered, 76 Publications, etc., of company, name to appear in, 13 Purchase of its own shares articles, power in, void, 40 illegal, 15, 40 memorandum, power in, void, 40 provision of financial assistance for, illegal, 40 Purchase money prospectus to state amount of, 775 INDEX Qualification shares, 21, 45, 46, 48 alternate director, 154, 155 appointment of directors, on, 142 Quebec company legislation in, 8. Queensland company legislation in, 82: Ruorum, 21, 134, 150 board meeting, 150 registration in joint names of shares, etc. (Scotland), 308 shareholders’ meeting, 134 statutory company, meeting of, 299 trustees in Scottish companies, 306 Railway companies, 12, 297 Rates : preferential payment, 259 Rates of exchange secretary to have return of, 166 Receipt, 372. And see Stamp duty allotment letter, attached to, 52, 55 application for shares, attached to, 51 balance, 72 bankers, 374 barrister’s fees, for, 373 bill of exchange, for, 374 cheque, payment by, 373 contra accounts, for, 373 definition of, 372 decisions on, 373 } giving an unstamped, penalty for, 375 joint holders, for dividends, 42 no particular form of words necessary, 37. refusal to give, penalty for, 373 salaries and wages, for, 374 ‘ settled,” use of word, 373 stamp duty on, 372 et seq., 386 exemptions, 374 how denoted, 372 transfer, lodged for registration, for, 7. transfers, form of receipts for, 458 writing need not be signed, 373 INDEX 245 Receiver, 196, 205 et seq. accounts, delivery of to registrar, 206 agent, when is an, 203 not if appointed by the Court, 207 under Law of Property Act, 1925, 19¢ business, carrying on company’s, 207 Court, appointed by the, 207. agent of company, or debenture holders. is not, -o7; duties of, 208 manager and, 207 applications to Court, 208 motion in debenture holder’s action, 207 officer of Court, is an, 207 order appointing, nature of, +7 position of, 207 registrar to be notified, security to account, 207 debenture-holder, appointed vy, .. agent, is, 205 business, carries on company’s, 207 conditions of debenture provide for, 205 duties of, 206 liquidation of company, position as agent on, 206 manager, and, 196 possession of property, may take, zo? sale by, 207 statutory duties of, 206 duties of, 206 letters, invoices, etc., must state appointment in, 208 motion to Court to appoint, 207 personal liability of, 206 possession, power to take, 207, 208 preferential payments by, 206, 207 registrar, notification of appointment to, 2~=ceasing to act, notification of, to, zo6 registration of appointment of, 202 remuneration of, in winding-up, liquidator may apply to Court to fix, 207 statutory duties of, 206 trustees under debenture trust deed, am~n-‘nte’ winding-up, effect of, on position, 20° Reconstruction, 209 ef seq. acquisition of entire control in comnan agreement for sale, 212 allotment of new shares to be filec alteration of shareholders’ rights, amalgamation, how effected, 221 arbitration, price of shares may be referrec articles may provide specially for, duties of arbitrator, 216 arrangement, scheme of, under s. 153, ».. of arrangement classes of shares, consolidation within, 223 Court to direct meetings of creditors and membe. dissolution of company without winding-um form of scheme, 223 registrar. deliverv of order 046 Reconstruction—continued modifications of scheme, Court may sanction, 223 transfer of assets by Order of Court under s. 154, 224 unregistered company’s, section applies to, 223 voting at class meetings, 222 committee of inspection, sanction of, 211, 212 compensation for loss of office, 224 disclosure of, 225 general meeting, must ratify, 224 compulsory winding-up, effect of, 216 consideration for sale, 211 controlling interest in company, 221 Gourt, sanction of, when required, 211, 212 creditors, rights of, 216 liquidator to summon meeting of, 212 creditors’ voluntary winding-up, in, 211, 212 debenture holders, debentures allotted to, 216 dissentients to sale, 211, 214 dissentients to scheme, 214. 4nd see Dissentients abandonment of scheme if many, 214 articles cannot deprive from rights, 216 effectual dissent by, price of shares, how ascertained, 215 fund set apart to meet, 216 notice to liquidator, 214 registered office, should be left at, 214 position of shareholder in old company, 214 dissent, how far effectual, 214 rights of, are statutory, 216 duty on, saving under s. 55 of Finance Act, 1927, 210 Finance Act, 1927, s. 55, 210, 219 conditions of compliance with, 210, 219 documents, form of, 210 renunciation, letters of, use of in, 210, 219 foreign company, sale to, 211 fund to be raised to meet dissentients, 216 injunction, shareholder may obtain, 216 insurance against scheme under s. 234 being inoperative, 216 liquidator, 211. And see Liquidator appointment of by meeting, 212 creditors to be summoned by, 212 sale by, 211 consideration, 211 only to a company, 211 special resolution to sanction, 211 underwriting, duty in case of, 217 tenders for unsold shares, 219 majority, control by, 211 meetings for special resolution, 212 members’ voluntary winding-up, in, 211, 212 memorandum of association, reconstruction under powers in, 219, 220 memorandum of association, rights of shareholders if fixed by, 213 methods of, 209 name of new company, 213 partly paid shares, sale to new company for, 212 preliminary agreement on underwriting, 218 ‘property,’ of company, meaning of, 2171 reconstruction under s. 234, 210 INDEX INDEX A Reconstruction—continued creditors, how protected, 216 dissentients, 214. And see Dissentients distribution of shares in new company, 21 effect of, 211 enlarged powers of old company, 213 injunction to restrain scheme, 216 old company wound up, 212 procedure under, 212 special resolutions, 212 purposes for which method used, 210 registrar, delivery to, 217 registration of new company, 212 rights of shareholders, how protected, --shareholder doing nothing, 215 may lose his rights, 215 variation of shreholder’s rights, 213 warrants to bearer, difficulty if shares represented vo: reduction of capital, involving, 210 registration with registrar, 217 sale by liquidator to new company, z:: consideration, 211 partly-paid shares, may be for, = dissentients, 214 individual, sale to an, invalid, 211 partly-paid shares, for, 212 procedure on, 212 property,” meaning of, 211 sanction, when required, 211 committee of inspection, of, 211 Court, of, 211 shareholder's rights, how protected, 211 special resolution necessary, 211 three-fourths majority necessary, 21r scheme of arrangement with creditors under s. 2 51 of Ac. of 209 how carried out, 210 whether desirable under the section, 210 shareholders’ position, how may be affected, 214 articles of association, fixing rights, 213 dissent by, 211, 214 distribution of shares among, 212 rights of, if fixed by memorandum, as to alteration, 213, 214 shares, price of, on dissent by shareholder, 21 5 special resolutions to sanction sale, 211, 212 Stock Exchange requirements as to, 420 transferee company, need not be company within meaning of Act. 211 anderwriting on, 217 preliminary agreement, 213 procedure on, 218 tenders for unsold shares, 219 unsold shares, shareholders may apply for, z1o when resorted to, 217 unsecured creditors, on a, 217 warrants to bearer, where shares represented by, 217 winding-up of comvany, compulsory. effect of 216 1929, 948 Redeemable preference shares, 39, 190 articles, terms of redemption to be specified in, 22, 39 capital duty on new shares after redemption, 39 capital redemption reserve fund, 22, 39, 190, 191 fully paid shares, only, may be redeemed, 39 new shares, issue of, upon redemption, 39 premium, redemption at, 39 profits, redeemable only out of, 39 Reduction of capital ‘ and reduced ’ words, may be added after name of company on a, 36 articles should authorise, 34 . if silent, fresh article should be framed, giving power, 35 creditors, rights of, 36 evidence for, 35 how effected, 34 ef seq. liability of members in respect of reduced shares, 597 memorandum of association, power of reduction cannot be given only, by, 35 notice to registrar, 36 order, registration of, 597 petition necessary for, 34 evidence on, 35 petition, reconstruction of company an alternative to, 210 power of redemption of stock bv statutory companies may effect, 298 sanction of Court for, 34 in what cases not required, 35 scheme of arrangement may include, 223 special resolution for, 34, 595 Referencing system of filing by, 343 Register alteration of names on the, 63 articles, provision in, as regards registered holders, 64 beneficial holder and registered holder, 64 indemnity in case of, 64 card index system, 66 certificates cancelled and issued, of, 71 cestui que trust, liability of registered holder and his, 64 change of surname, 63 closing of, 100 consolidated stock, holders of (statutory companies), 300 contents of, 62 copy, who may be entitled to, 100 creditors’ rights over shares, 64 debenture-holders, of, 204 inspection and copies, 204 debentures, Somerset House register of, 199. And see Registration of mortgages and charges defunct companies, removal from 269 directors’ resolution to close, 100 dominion register, 101 entry on, gives right to vote, 135 necessary to constitute membership, 41 equitable owners, company’s position as to, 64 evidence, how far, 100 executors or administrators. form of request to be placed on, 462 filing, for, 342 INDEX INDEX n J Register—continued index to share, 65, 467 suggested form for keeping, 65 et seq infants, rectification of, in case of, 105 inspection of, 99 fee for, 99 Scotland, in, 313 joint accounts, in case of, 63 voting rights, how may be affected, € keeping the, proper method of, 62 to be kept at company’s office, 99 marriage of female shareholder, 63 members, of, 62, 99 closing of, 100 directors’ resolution to close, form of inspection at registered office, ao fee for, 99 name struck off, on issue of share warrants, prima facie evidence, 100 rectification of, 100 mortgages, of, 199. And see Register of charges mortgages (Scotland), 312° priority of mortgagees of shares, «. rectification of, 41 in case of wrongful entry of member's name, 4: power of Court, 615 Sasines, register of, 311. And see Scottish companies Scotland, entry of names of trustees on, in, 300 on death, what evidence accepted, 307 share, form of, 62, 465 share, index to, 65 card index system, of form of, 467 shareholders (statutory company), contents of, 300 copies of, 300 inspection, no right of, 300 seal of company to be affixed, 300 trusts not to be entered on, 3o0I share warrants, 63, 116. And see Share warrants cancellation of, holder to be entered on. 1-7» form of, 488 particulars to be entered, r surrender of, on, 63 signature, new, 63 transfer of shares, entry on, after, ou in Scotland, 306 trusts not to be entered on, 63 in case of statutory companies, 301 recognised in case of Scottish companies, 306 trustees, registration of, in representative capacity (Scotland), 306 majority can bind estate, 306 transfers by quorum, 306 what evidence accepted on change (e.g. death’ ~ ~rsonnel, 307 Register of charges company’s register, 203 contents of, 203 cobies of register at companv’s registered office, «035 950 Register of charges—continued inspection by creditors and shareholders, 203 includes right to take copies, 203 foreign companies, 200, 202 index to register, 608 inspection of register, 202 object of system, 199 property acquired subject to charge, zor rectification of register, 203 Scotland, in, 312. And see Scottish companies Somerset House Register, 199 certain loans not included in, 201 certificate of, 202 contents of, 199-201 effect of non-registration, 202 inspection of, 202 particulars to be furnished, 199-201 stamp duty on registered mortgages, 382 Register of directors, 103, 148 alternate director, must appear in, 15 5 company must keep, 148 inspection of, 149 . names of directors to be on company’s circulars, etc., 149 notice of change, 149 particulars to be included in return, 149 particulars to be inserted in, 149 to be included in annual return, 103 Registered office, 10, 14, 119 accounts, books of, must be kept at, 166 change of, 14 clerk at, may represent secretary, 15 name of company to be affixed to, 13 particulars of change, to be given to registrar, 14 proper place for service of writs, documents, etc., 1 5, IIQ registrar, particulars of, change of, etc., to be sent to, 14 serving of documents, etc., to the, 1 5, IIQ situation of, 10, 14 Registrar of companies allotment, delivery of contract of, on reconstruction, 21% allotments, delivery of return, 50 ‘ annual return, 101 ef seq. articles of association, to be delivered to, 7 balance sheet to be included in annual return, 103 capital, consolidation of, notice to be given to, 32 increase of, notice to be given to, 32 order of Court, for reduction to be registered, 36 certificates of, 47 certificate that company can commence business, 47 consolidation of shares, notice to, 32 contracts to be delivered to, 50, 217, 377 for shares allotted as paid otherwise than in cash, 50, 217, 377 conversion, notice of, must receive, 33 documents, table, of, to be delivered to, 399-401 default in delivering documents to, 51 directors, particulars of, to be sent to, 149 duty of, when registering a company, 6 mandamus, may be compelled by, 6 fees to be paid to, Tenth Schedule to Act of 1929, ~88 INDEX INDEX = J Registrar of companies—continued foreign company, documents to be delivered to, by, 315 liquidator, notice of appointment to be delivered to, 241 memorandum of association to be delivered to, 7 memorandum of satisfaction of mortgage, as to lodging with, 204 minute, 36 mortgages and charges, to be registered with, 199 name of company, exercises discretion as to, 13 offer for sale, copy to be delivered to, 59 office, to be notified of place of, 14 orders of Court, copies to be delivered to, 18, 36 prospectus, copies to be delivered to, 45 prospectus, statement in lieu of, delivered to, 47 receiver, to be notified of appointment of, 206, 207 reconstruction scheme, filing of contract of allotment, 217 registration, discretion as to, 6 resolutions and agreements, in what cases copies must be forwarded to, 160 share warrants, notices to, in case, 116 solvency, declaration of, to be delivered to, in case of members voluntary winding-up, 231 statutory declaration on registration of company to be sent to, 7 statutory declaration before commencement of business, 47 statutory report, to be delivered to, 130 winding-up, returns of final meeting to, 268 Registration of Business Names Act, 1916, 793 ef seq (App. J; Board of Trade to make rules, 799 corporations, offences by, 800 interpretation of terms, 8oo manner and particulars of registration, 7. nominee, registration by, 794 penalty for default of registering, 79¢t false statements, 797 persons to be registered, 794 removal of names from register, 798 statement by persons registering, 795 time for registration, 795 Registration of company, 6 ef seq. certificate of, 9 cancellation of, 6 how far evidence, 9 discretion of registrar as to, 6 fees on, 8 stamp duty on, 354, 379 statutory company, not necessary for, 299 Registration department, of company’s office, 348. And see Filing Registration of transfer, 74 approval of board required, 75 not for statutory companies, 3c? articles may limit directors powers or, attestation, 76 certificates to be cancelled, 78 closing of company’s books for dividena, 79 company not compelled at once, 8: corporate body, in cases of, 76 death of transferor, notice to company, 70 deed of transfer to be stamped with date, etc., 7. directors’ refusal if not properly stamped, 78 952 Registration of transfer—continued discretion of directors, 78 executors or administrators, in cases where death of transferor proved by, 76 fees on, go, 382 instrument of transfer, unlawful without proper, 64 name of transferee altered, 76 notice to transferee of refusal to register, 67 notice to transferor that transfer lodged, 75 form of, 461 joint holders, 75 where transferor a corporation, 75 partnership firm, transfers to, 76 personal representatives of deceased transferor, 76 prevention of, 8o Public Trustee, transfers to, 76 receipt, for lodgment of transfer, 74 forms of, 458 rectification of register in case of forged transfers, 83 refusal, notice of, must be given, 67 restraining, 8o restrictions on transfer, 68 Scottish companies, in the case of, 306 setting aside, 68 statutory companies, as to, 301, 302 time for, 82 title of transferee, none until registration, 81 transferor, duty of, 82 transferor, liability of, after registration, when, 81 signature on registration, examination of, 75 Regulations company, 23 articles of association, not equivalent to, 23 statutory declaration on, 7 Removal of director, 148 Remuneration of director apportionment of, 146 board meetings, none for attending, 146 Remuneration of liquidator, 237. And see Liquidator Remuneration of secretary of statutory company, 299 Renewals, allowance for, on taxation, 325 Rent, taxation of, 322 Renunciation, letter of, 53 duty on, 53, 55, 357, 383, 388 form, 53, 453, 477 period for lodging, 54 rights, of, form, 478 sale under s. 234, use of, inadvisable in case of, 210, 219 transfer, is not in law, 54 Reorganisation of capital, 84, 209 ef seq. And see Reconstruction ; Scheme of arrangement class of shares affected by, majority of holders must confirm, 222 class meetings of shareholders for, 140, 222 methods of, 209 reconstruction under s. 234 of Act of 1929, 210 sanction of Court, 222 scheme of arrangement, in a, 210 special resolution for, 212 INDEX [NDE . Repairs allowance for, 325 Report. See Statutory report auditors’, 183 directors’, 130 statutory, i30 Request form of, on alteration of name in registe., Requisitioned meeting, 24, I33 Rescission forfeiture restrained during action for, 94 subscriber of memorandum cannot have, 8 Re-sealing of colonial probates, 85 Scottish and Irish, 86 Reserve liability, 43 Reserve fund articles should provide for, © purpose of, 190 bonus out of, 190 alteration in articles, 191 capitalisation of profits, 190. dividends may be paid out oi, investment of, 190 taxation, sums allocated to. allowance on, Residuary legatee duty on transfer to, 391 Resolutions. See Extraordinary resolutions ; special resolutions agreements having the effect of, when copies to be forwarded +. Registrar, 160 when to be annexed to or embodied in articles, 160 amendments to, 124, 125, 16> 2-¥ And see Amendment chairman’s duty on, 13, minutes of, 338 exact words to be resecretary’s duty. procedure on, 163, 330 where no seconder foun articles, under, 158 when copies to be annexed to or embodied in, 1uov call. to make a, 92 form of, 161 capital, form of resolution to increase, 162 chairman refusing amendment to, 134, 10 chairman’s duty as to proposed amendments. classes of, 140, 158 clearly expressed, should be, 161 committee of investigation, form of resolution appointing debentures, to issue, form of, extraordinary, 125, 159 form of, to wind-up, forms of, 161-163 if given majority required, fact to be recorde. invalid, when, 158 failure to receive notice may render, 1z3 liquidator, appointing, notice to be given to registra, to be advertised, 241 minutes of, at meetings, ,.. notices of examples, oaalisation or profits Q 954 Resolutions—continued notices not received by shareholder, may render invalid, 123 articles may provide for accidental omissions, 123 ordinary, how passed, 159 poll demanded on, 137 ‘previous question,’ moving the, 340 registrar, when copy to be forwarded to, 160 seconder, where non found to amendment proposed, 339 shareholders’, definition of, 1 58 special, 126, 159. And see Special resolution statutory meeting, as to, 129 winding-up, on, 230, 231 ys forms of, 163 Resolutions of directors, 164 articles may give control of company to, 164 alteration of, if oppressive on shareholders, 164 casting vote of chairman at, 164 forms to allot shares, 161 close books, 162 forfeit shares, 162 issue prospectus, 161 make call, 161 pay dividend, 162 simple majority only necessary, 164 writing in, without board meeting, 149, 157 Return as to allotments, 50 Right of transfer, 67, 68 Rights, renunciation of, form, 478 Rotation retirement of directors by, 148 ‘Royal,’ ‘Imperial,’ etc. license of Board of Trade necessary for use of words, 1 Royalties taxation of, 323 Rules of Supreme Court notice in lieu of distringas, 8o Order 46, rule 4, restraining company from transferring shares, 6; Order 53B, 36 INDEX Salary preferential payment, 259, 261 persons not falling within, 261 return by secretary for income tax, 330 form of, 331 how calculated, 331 Sale company’s business or property on reconstruction scheme, 211 consideration for, 211 transferee company, need not be company within meaning of Act of 1929, 211 to another company, 211 uncalled capital, of, 211 liquidator, by, 211, 246 receiver and manager, by, 207 Sasines, Register of, 311 Saskatchewan company legislation in, 845 INDEX ™ 3 Scheme of arrangement, 209 et seq. And see Reconstruction creditors, with (s. 251 of Act of 1929), 200 reconstruction, for, 212 under s. 153 of Act of 1929, 222 ef seq., 251 classes of shares, consolidation of and division into, now within, 223 Court to direct meeting to be held, 222 jurisdiction of, 223 may require modifications, 223 dissolution of company without winding up, under s. 154, 224 foreign companies, how affected, 223 form of, 223 registrar, delivery of order to, 224 schemes sanctioned, specimens of, 223 unregistered companies, applies to, 223 voting at meetings under, 222 under s. 234. See Reconstruction Scotland, 14, 86 jurisdiction to wind-up companies in, 653 Scottish companies, 306 ef seq. articles of association, registration of joint accounts without qualification, 308 attestation of deeds, 314 memorandum and articles, 314 bearer debentures, 313 bonds under Companies Clauses Acts 1845 and 1863, issue of, 3.: calls, liability of trustees for, 306 charges, when to be registered, 312 Companies Clauses Acts 1845 and 1863, bonds, etc., issued under. 313 debenture stock, how far a statutory charge, 313 debentures, as to, 309 bearer, to; validity of, 313 classes of in Scotland, 310 Companies Clauses Acts, 1845 and 1863 under, may be issued, 313 floating charge not possible, 310 heritage (e.g. real property), 311 deed of trust by, 311 provisions of trust deed, 311 Register of Sasines, registration in, gives priority, 311 security, how created, 311 trust deed, nature of, 311 moveables, security over, 3II. naked debentures, 310 advantages of a trust deed, 310 bonds under Companies Clauses Act, 1845, 313 position of lender, 310 recovery under, 310 trust deed, under a, 310 what are, 310 security over moveable property at common law, 310 security over moveable property, debentures on, 3717¥ seldom resorted to, 311 ships, charges on, how effected, 311 register, mortgage or bills of sale recorded on, ,.. trust deed, as to a, 311 stocks or shares, pledging of, 3: 956 Scottish companies—continued death of joint stockholder of, 308 deeds, execution of, 308, 314 - attestation of, 314 delivery of property charged, when necessary, 310 directors, attestation of signatures of, 314 documents, registration of, 309 execution of deeds, 314 by mark, not valid, 308 executors, registration of persons as, 306 majority as quorum may bind deceased’s estate, 306 on death of one, register altered, evidence of, 307 floating charge not possible in case of, 310 if company registered in England or vice versa, 312 heritage, security over, 3II debentures as to, 311 debentures, how created, 311 provisions of trust deed, 311 registration of deeds, 311 trustees, property vested in, as absolute owners, 311 how differ from companies in England, 306 a rights of in wife’s property, 307. And see married women. infra joint names, registration on transfer in, 308 absence of words of survivorship, effect of, 308 on sale, what necessary, 308 quorum of, may sign for joint holders, 308 registration of survivorship clause, 308 survivorship not implied, 308 : transfer may provide for survivorship, 308 land, charges on, how created, 311 debentures secured on, 311 registration of, 311 trust deed, what provided for in, 311 long leases, security on, how created, 311 effect of registration since 1857, 311 what leases may be charged, 312 mark, execution of deeds by, not valid (Scotland), 308 how should be executed, 309 married women contract, can, as if unmarried, 307 feme sole, rights in property as if, 307 former disabilities as to transfers, etc., 307 heritable or personal estate, execution of deeds as to, 307 husband not liable for her contracts, 307 property of, exempt from husband’s right of administration, 307 sue, can as if a fewme sole, 307 transfers of shares, husband’s consent not now required, 307 mortgages, registration of, 312 annual summary to include mortgages, 313 Companies Act, 1929 how far applicable, 312 difficulty of filing in Scotland under Act of 1908, 312 particulars of charge for registrar, 312 register kept by companies of its own mortgages, 313 moveables (personal property), 310, 3II common law, at, no effective security over, 310 delivery to creditor required, 310 - INDEX INDEX 7 oS Scottish companies—continued effective charge on, how created, 31. floating charge over, 310 security over, how created, 311 ships, in case of, 311. And see debentures supra office bearer, registration as, 306 evidence on substitution of new, 307 transferors, words descriptive of, 307 partnerships, 308 personal property. - See moveables supra powers of attorney, where may be registered, 309 process of Court in England, service on, 15, 314 Register of Sasines, 311 registration debentures, in case of, 312 documents, of, 309 joint account, survivor on a, 308 quorum acting for, 308 land, as regards charges on, 311 mortgages of, 312 bonds on Scotch heritages, 311 Companies Act, 1929, how far applicable, 312 completion of, 312 particulars to be given in annual summary, 313 register kept by companies, 313 survivors in joint accounts, by, 308 Sasines, Register of, 311 leases, recording of, in 311 ships, charges on, how effected, 311 provisions of trust deed in case o., statutory companies, 313 survivorship not implied, 308 in joint accounts, 308 on registration of transfer, must be expressly stated, 308 death of one holder after survivorship clause registered 308 result, if not having a clause of survivorship and death of one holder, 308 testing clause, 309 transfers authentication of, form, 309 married women, by, 3coffice bearers, as, 306 survivor on joint accounts, 308 trust deeds moveable property, charge on, 311 naked debentures, in case of, 310 real property (heritages), secured on, 311 trustees, acting as such, 306 debentures, in case of, 310 trusts recognised by, 306 calls, personal liability of trustees for, 306 changes in personnel of trustees, what evidence accen.c. persons registered in a representative capacity, 3c trustees as quorum may bind estate, 306 as such can sign transfers, 306 Scottish probates, 86 resealing in Ireland and Scotland, AA 958 Scrip, to bearer, 199 certificate, stamp duty, 383, 387 negotiable instrument, is a, 199 Scrutineers, 138 Seal INDEX company must have, 9, 153 custody of, 153 deeds in Scotland, on, 314 directors liability notwithstanding, 14 documents under, stamp on, 153 foreign, for use abroad, 153 name of company to be engraven on, 13, 153 powers of attorney, in case of, 272, 273 register of shareholders (statutory company), 300 seal book, 153 contents of, 153, 241 share warrant, affixing on, 110 Table A, provisions as to, 153 transfers, on, 70 Secretary accounts, duties as to, 165 ef seq. balance sheet, 171 branches separate from head office, 168 cash transactions, safeguards in case of, 168 cash transactions, analysis of cash books, 170 cheques, rules regarding, 171 cheques spoiled, examination of, 171 debts due to company, 176 departments, summaries of work, 171 directors, should furnish synopsis of financial transactions, etc., 167 dividend warrants, preparation of, 174. And see Dividend warrants expenditure should be classified, 170 foreign branches, in case of, 169 duty in regard to, 169 reports to be furnished to, 171 invoices, 171 interest on debentures, 174 ° minutes, as to, 176 payments by cashier should be countersigned by, 167 rates of foreign exchange, daily return of, 166 returns to be furnished to, 166 services chargeable by a company, 174 vouchers, as to, 171 adjudication stamps on gifts inter vivos, 358 affidavit, by ; on petition for reduction of capital, 35 agenda, duty to prepare, 152, 333, 334 should read through, 334 allotment, duties of, as to, 52, 53 alteration of minutes of meetings by, 335 annual summary, liable for, 104 articles of association, duty as to, 29 board meetings, duty of, at, 152, 336 agenda for, prepares, 152, 333, 334 circulation of proposed agenda among directors, 334 notes of proceedings, should take, 336 should furnish chairman with minutes of preceding meeting, 335 INDEX 050 Secretary—continued circulars of I. R. Commrs. as to stamp duties, 385-392, 393-398 company commencing business, statutory declaration by, 47, 48 convening of meetings by, 132 contract to employ, 25 directors, fiduciary position of secretary in relation to, 165 duties of, in case of private companies, 293 executor, death of, how title should be recognised, 85 gifts inter vivos, must see bear an adjudication stamp, 3 58 income tax return as to salaries of employees, 330 letters of allotment, etc., to send out, 53 meetings, duties as to convening, 120, 132 articles should be consulted as to, 120, 132 minutes, duties as to keeping, 141, 333. And see Minutes notices, duties as to sending out, 119 board must authorise, 119 every shareholder (if entitled) should receive, 121 should ascertain who are entitled to receive, 121 private company, duties of, 293 private company, whether in employ of company as member, 290 proxies, as to, 138 in case of statutory companies, 299 registration of transfers, duties on, 74-76 in case of statutory companies, 301 stamping of instruments, must verify the, 374 penalties for default, 375 statutory companies, duties in regard to, 297, 300 new legislative enactments, etc., should study, 300 remuneration of, 299 special meeting of company, to call, if special Act required, 297 . statutory declaration, by, 7, 47 transfer of shares, duties of, on, 62 et seq. by power of attorney, 74 stamping of, 77 Secured creditors, 251 bankruptcy law applies to, 251 courses open to, in winding-up, 251 fixed charge, preferential payments subject to, 261 floating charge, 252 liquidator’s duties in regard to, 251 validity of security to be enquired into, 251 who are, 251 Service agreements of, duty on, 357 Set off. See Winding-up contributory, by, 255 what is a, 254 winding-up, in, 255 Seven days’ notice meaning of, 120 Share capital, allotment and application account, 172 allotment, amounts received on, 172 calls, in case of, 173 issue of share capital over-subscribed for, 172 premium, shares issued at a, 172 secretary’s duties on, 777 separate accounts, 17: g6o Share capital, allotment and application account—continued transfer by bank to current banking accounts, 173 writing off commissions on share issues, 173 Shares, 10, 31 et seq. And see also Capital ; Shareholder: Share warrant ; Stock agreement to take, how may be expressed, 41 allotment of. And see Allotment resolution for, form of, 161 annual summary, particulars of, in, 102 application for, 41, 55, 56 ' » agent, may be made by an, 55 application for, forms, 446, 447 application for, in fictitious name, 56 application for, legal decisions upon, 55 application for, withdrawal of, 55 communicated to clerk or secretary, 55 arbitrator, when value determined by, 215 articles of association may alter rights, 37 balance of unpaid, when may be payable, 91 balance receipt, 72 Bankruptcy Act, 1914, not within, 37 bonus, 173, 190 calls on. See Calls cancellation of, 34 cash book, 172 cash, shares allotted as paid otherwise than in, 50, 217, 377 stamp duty on, adjudication of, 51, 378 cash, shares need not be paid in, 8 certificate, 42, 80. And see Certificates forms of, 433, 435, 437 fractional, form of, 442 certificate, completion of, time for, 53 certificate, preparation of, 8o receipt for share warrants in exchange for, form, 483 certificate, Stock Exchange requirement as to, 415 certificate, surrendered, how disposed of in company’s office, 350 chose in action, is a, 37 classes of, 37, 38 . preferential rights as to, 38 special voting rights, 38 commission on issue of, 95. And see Commission ; Underwriting commission commission on issues of, to be written off, 173 company not to purchase own, 15, 40 condition precedent, application subject to, 56 consolidation of, 32, 223. Aud see Consolidation consolidation of, into stock (statutory company), 356 corporation may hold, 41, 42 coupons, 192 debentures, offer of, may accompany, 47 discount, may be issued at, 39. And see Discount when illegal, effect on allottee, 39 dividend. See Dividends cumulative, what is a, 38 division of one class into another, 34 equitable interests in, 63, 64 exchange of, 95 financial assistance, provision of, for purchase of its own, illegal, 40 INDEX INDEX 701 Shares—continued forfeiture of, 24, 41, 93, 94. And see Forfeiture of shares resolution for, form of, 162 ‘ fully paid,” company estopped from denying, 42 * fully paid,’ declaration of dividend when not, 191 infant holding, 104 et seq. And see Infants instalments, payable by, 91 instrument of transfer, registration unlawful without, 67 issue of, 36 et seq. dividends, to whom paid, in case of, 42 restrictions on, 39 joint names, when registered in. See Joint account; Joint shareholders Scottish companies, as regards, 308 lien upon, 93. And see Lien loans, secured upon, 201 meaning of in s. 356 of Act of 1929, 60 member, may hold any number, 9 memorandum, may be defined in, 37 memorandum, number of, must be stated in, 10, 31, 36 minimum subscription, 45 ef seq. And see Minimum subscription mortgagee selling shares by blank transfer, 83 nature of, 37 new, issue of, 54 no limit to number held by one member, & number, each distinguished by, 37 offer of, debentures may accompany an, 47 offer of new, form of, 452 option to subscribe, 97 ' otherwise than in cash,’ allotted as fully or partly paid, delivery to registrar of contract, 50, 217, 377 pavment for, 8, 91 unpaid balances, of, 91 personal estate, are, 37, 67 power of attorney, transfer by, 74. And see Power of attorney preference, 38. And see Preference shares preferential rights, 38. premium, may be issued at, 40 private company, restriction on transfer of, 288, 280 member's right of pre-emption, 289 provision of financial assistance for purchase of its own, illegal, 4¢ purchase by company of its own, illegal, 15, 40 qualification, 143. And see Directors redeemable preference shares, 89. And see Redeemable ference shares register. See Register entry on, necessary, 4. register, index to, 65, 80, 4t7 register, form of, 465 registered, contract to sell, 118 registered holder deemed owner, 64 registered shares in exchange for share warrants (forms), 187. 45¢ registrar, delivery to, of contracts for shares paid up not for cash 50, 217, 377 reserve liability, 43 share warrants in exchange for registered shares or other share warrants (forms), 486, 490 signatory, no formal allotment necessa: pre- 962 Shares—continued stock, differs from, how far, 33 Stock Exchange regulations as to, 416 subdivision of, 34, 223 subscribers to, who may be, 8 surrender of, 35, 95. And see Surrender of shares transfer of, 62 ef seq. And see Transfer of shares registration unlawful without proper instrument of, 67 transfer of, duty on, 358, 382 transfer of, form, 69, 454 : transfer of, form of notice of certification, 457 transfer of, private company, 288. And see Private company transfer of, procedure, 68 transmission of, 83. And see Transmission of shares underwriting commissions, not to be used for, 97 verbal application for, 55 voting power, 38 warrant. See Share warrant who may hold, 41 winding-up. See Winding-up Shareholders. And see Preference shareholders ; Shares address book (statutory companies), 300 contents of and inspection, 300 auditors’ report, must be open to inspection of, 180 balance sheet, entitled to copy of, 181 bankruptcy of, 41, 89, 122 change of name, 63 corporation as a, 41, 42 death of, 37, 42, 83 ef seq., 122 Scottish companies, 308 deceased or bankrupt, notices, to whom sent, in case of, 122 directors, appointment of, by, 144 dissentient, on a reconstruction scheme, 214. And see Dissentients at class meeting, 37 infants, 56, 57, 69, 70, 104 et seq. infants, 56, 57, 69, 70, 104 et seq. And see Infants injunction, may apply for, when, 217 joint, 42, 77. And see Joint shareholders bodies corporate can hold with, 42 death of, interest to survivor, 42 Scottish companies, 308 dividends, to whom paid, in case of, 42 transfer of shares by, 42 marriage of female, 63 meeting, may requisition, 133 member, ceases to be a, when, 41 definition of, 41, 55 who may become a, 41, 42 minimum number, 6, 43 new shares to existing, procedure, 54 notices to, 119. And see Notices of meetings partnership as, 42 personal representative's title, 83 ef seq. preferential rights of, extending to new issue, 54 private company, of. See Private company reconstruction, rights on, 214 agreement for sale, rights on, 218 alteration of rights, 213 INDEX INDEX 393 Shareholders—continued dissent to scheme, 213. And see Dissentients distribution of new shares, 211 rights fixed by memorandum or articles, 213 scheme binds, 211, 222 resolutions of, 158 statutory company, of. See Statutory company transmission of interest of (statutory companies), 303 vote, right to, 135 who may be, 41 winding-up of company, surplus assets, 262 Share warrant, 63, 110 ef seq. advertisement of dividends payable, 114 form of, 114 alteration of, with intent to defraud, 118 annual summary, shown in, 116 application for, 115 form of, 481 receipt for, 483 application for exchange of, for other share warrants, 490 application for registered shares in exchange for, 117, 489 articles of association, under, 110 not in case of private company, 110, 289 conditions of, to be followed strictly, 111 seal, conditions of, as to affixing, 116 auditors of company should examine all applications, etc., 116 certificate, should give, 116 bank, how should be shown at, 118 board of directors’ resolution may authorise, 110 cancellation of, on surrender by holder, 117 conditions of issue, model form of, 111-114 conditions of issue separate from, 110 contract to sell registered shares, delivery of warrants not enough to satisfy, 118 coupons for dividends, 118 coupon account at bank, 118 registers to be kept, 118 delivery of, 116 deposited, receipt for, 480 directors share qualifications not satisfied by shares on, 118 dividends payable on, form of advertisement of, 114 payment of, how provided for, 118 duplicate, 114 duty on, 115, 359, 383 exchange of, 116 exchange for other warrants, register for issue, 487 fees, 115 forgery, danger of, 110 penalties for, 118 form of, 111, 479 application for, 481 application for, form of receipt, 483 fully paid shares or stock, may be issued in respect of, 116 holder of, rights on surrendering for cancellation, 1:7 whether entitled to notice of statutory meeting, 123 issue and effect of, 600 issue of, what particulars to be entered on register. 116 unstamped, 116 964 Share warrant—continued issue of, form of register for, 486 lost or destroyed, in case of, precautions, 114 meetings, notices of, if holder entitled to, how should be given, 117, 122 negotiable instrument, is a, 110 notices of meetings, as to, 117, 122 numbers on, 111 particulars to be entered on register, 116 points for consideration on issue, 111 private company cannot issue, 110, 289 reteipt for deposited, form of, 480 register, form of, 488 register for issue in exchange for registered shares, form, 486 register for issue of registered shares in exchange for, 487 registered shares, exchanging warrantg for, 116 registrar, what information to be given to, 116 registration, receipt on lodgment for, 485 seal on, articles should be followed as to affixing, 116 share warrants for other share warrants, application for exchange of, 490 stamp duty on, 115, 359, 383 stock book, 115 surrender and cancellation of, 117 talon for issue of coupons, 118 receipt for, form, 484 transferable, by delivery, 110 voting powers of holder, 117 Sheriff goods seized by, in winding-up, 249 Ships, insurance of, 367-370. And see Stamp duty policies of, duty on, 367 continuation clause, 369 particulars in policy, 368 Show of hands resolutions by, 159 voting by, 134 Signatories, 8 Signature agent, by, 8 misrepresentation, induced by, 8 Sinking fund in case of terminable debentures, 173 Solicitor appointment of, by articles not binding, 26 costs, when allowed in assessing for income tax, 326 costs, taxation of, in winding-up, 258 costs, liquidator not liable for, 264 lien claimed by, on company’s property, 241 liquidator may employ, 240 statutory declaration by, on formation of company, 7 South Africa (Union of) Companies Act for, 851 South Australia company legislation in, 822 Southern Rhodesia company law relating to, 856 INDEX NDE. »bs Special business meaning of, 124 nature of, to be stated in notice., Special resolutions, 126, 159 alteration of articles, by, form of, 162 alteration of objects of company, required for, 18 articles, copy of resolution to be annexed to or embodied in, 160 capital, increase of, by, 31, 32 change of name, first step necessary wv, characteristics of, 159 confirmation of at second meeting no longer required, 126 consolidation of share capital, as to, 32 conversion authorised by, 33 declaration of chairman, 160 definition of, 126, 624 increasing capital by, 31, 3% length of notice for, 126 liquidator, appointment of, not necessary for, 233 notice of intention to propose as a, 120 form of, 126 poll, demand of, 160 private company becoming public, reduction of capital, 34 registrar, copy to be forwarded removal of director by, 148 re-organisation of capital, 34 sale of property or business of company on reconstruction, 2: sub-division of shares, 34 voluntary winding-up for, 230, .,. forms of, 163 Speciality debt calls a, 92 Staff organisation of office, 341 Stamp Duties Management Act, 1891, s. 21 as to fraudulent evasion of stamp duty, 7. Stamp duty. And see Finance Act, 1927 (App. abroad, instruments executed and sent from proxy executed, 140 securities issued, and marketable in United Kingdom, act of 1891 adjudication, 51 alterations in policies, 370 bill of exchange, definition of, 36¢ ‘ payable on demand,’ 364 summary of effect of, 366 compounding for duty (s. 115), 35. evidence, policy of sea insurance as, executed instruments, 353 impressed stamps for all instruments, 352 inland and foreign bills, distinction between, instruments receivable in evidence, « life insurance policy, definition of, marketable security,’ definition of, -. penalties for issuing unstamped bills, 36-* policy of insurance,’ definition of, = - receipt, definition of, 372 966 Stamp duty—-continued share capital, as to duty on (ss. 112 and 113), 354 transfers of shares, on, 358 adhesive stamps, 352, 385 agreement under hand, 357 applicable to few instruments, 352 bills payable on demand, 365 cancellation of, 352 in case of proxies, 140 fgreign bills, for, 365 letters of renunciation, on, 357 notary public, protest by, on, 367 receipts, on, 372 when paid by, 385 adjudication stamps, as to, 353, 358, 376, 393 circular of Inland Revenue as to, 77, 393-398 contract for shares not paid up in cash, 5. gifts inler vivos, must be on, 78, 358 transfers as voluntary disposition infer vivos, operating as, 78, 358, 377 affidavit, on an, 357 exemptions from, requisites for, 358 agreement under hand after execution, 353 agreements with a company, 357 under hand of an officer of company, 357 exemptions from, 357 how denoted, 357 under seal, rate of, 357 in Scotland, 357 allotment of shares as paid, otherwise than in cash, 50, 217, 377 allotment, on letters of, 55, 357° articles of association, on, 8, 354 bank, transfers to or by a, certificate of official, 377 bankers’ receipts, 374 barrister’s fees, for, 373 bearer, securities to, on, 360, 383, 387 foreign bearer securities, in case of, 359, 361 marketable securities, as to, 359 reduction of duty, when, 361 warrants, on share, 359 beneficial interest, on transfer not passing, 391 bills of exchange and promissory notes, on, 364, 386 definition under Stamp Act, 1891, 364 exemptions from duty on, 367 fixed duty, letter authorising payment out of fund, 304 how denoted, etc., 365 foreign bills, on, 365. And see foreign bills infra inland and foreign bill, distinction between, 366 effect of Stamp Act, 1891, on, 366 " payable on demand,’ definition of, 364 orders, what amount to, 364 post-dated cheques, 365 what included in, 364 rate of duty, 364 receipts for payment by cheque are receipts for, 373 receipts written upon, 374 unstamped, penalties for issuing, 366 bonds, registered, 360, 386 INDEX INDEX 207 Stamp duty—continued colonial governments securities, 361 transfers, on, 361 business of company, taking over by another company for shares, "on loan, on, 356, 388. And see loan capital infra by what Act charged, 356 by whom payable, 356 consolidation of, and of nominal share capital, 356 definition of, 356 duty, rate of, 356 capital, share, on, 354, 387. And see share capital infra consolidation of, on, 355 Finance Act, 1927, s. 55, relief under, 210, 355 increase of authorised, on, 32, 354 rate of, 354 charity, gift or subscription to a, 373 cheque, receipt for payment by, 373 circular of Inland Revenue Commissioners relating to, 385-392 adjudication stamps, as to, 393-398 colonial government securities, duty on, 361 registered bonds in, 360 colonial municipal securities to bearer, rate of duty, 301 colonies, transfers sent unstamped for completion and return, as to duty on, 359 commencing business, duty on certain documents to be filed before, 380 Companies Act, 1929, as to, 354 compounding for, 359 consolidation or conversion of loan capital, whether an issue of loan capital, 356 of nominal share and also of loan capital, difference between, 346 consolidation or re-arrangement of capital, on, 3.6 construction of Acts relating to, 352 continuation clause, 379 contract for sale, consideration being bill of exchange, 378 contract notes, on, 383 contracts constituting allottee’s title to shares, delivery to regis trar, 51, 378 adjudication may be required, 51, 378 delivery of prescribed particulars of, 50, 217, 377 rights of registrar on registering, 51, 378 voluntary winding-up, liquidator’s duties on, 378 contracts under seal, 153, 357. And see agreements supra Coupons, exemptions in case of, 367 debenture, extent of charge of duty on capital infra deposit of an unregistered, rate on, 330 debenture stock, duty in case of trust der loan capital is, 360 debentures, issue for those of another com redeeming and re-issuing of, how trea debentures, registered, on, 386 debentures, trust deed to secure, duty on, _ deed, two or more distinct matters in one. ‘denoting’ stamps, 353 See 968 Stamp duty—continued impressed without payment on proof of full duty paid, 353 what are, 353 when used, 353 documents, on, in connection with registration of company, 380 employers’ liability policy, duty on, 371 evidence, instruments not duly stamped, cannot be given in, 374 criminal proceedings, in, 374 policies of sea insurance, when receivable in, 370 executed instruments, stamping of, 353 penalty exacted after certain period, 354 eXemption from duty, bills of exchange, on, 366 foreign bearer securities, on, 361 corporations, on, 359 marketable securities, on, 361 foreign bills of exchange, duties on, 365 how calculated, 365 how denoted, 365 inland and foreign bills, distinction between, 366 share warrants, on, 359 foreign state, securities issued by, 359 stock certificates, on, 361 foreign or colonial municipal, etc., body, on securities issued by, 359 negotiated and interest payable in United Kingdom, 359 fraudulent attempts to evade, 378 gifts inter vivos, 358, 376, 395 discretion of Inland Revenue Commissioners if ad valorem duty shown, 376 registering official, rights of, as to, 376 hire agreements, as to duty on, 357 increase of registered capital, meaning of, 354 registration of, after first registration, 381 indemnity, for lost warrant, 176 inland and foreign bills of exchange, distinction between, 306 Inland Revenue Circular relating to, 77, 385-392 adjudication of stamp duty, 393-393 Inland Revenue Commissioners, statement delivered to, 355 discretion as to gifts inter vivos, 376 voluntary dispositions infer vivos, as to, 358, 376 instrument relating to several distinct matters, 352 insufficient stamp on instrument of transfer, secretary may take opinion, 375 insurance, on policies of, 367-372. And see policies of insurance infra intestate, on transfer of property of an, 391 legacy, on transfer of, 391 letters of allotment, on, 357, 388 letters of renunciation, on, 357, 388 how denoted, 357 liquidator in voluntary winding-up, 378 unfiled contract, to pay duty on, 37° loan, on transfer as security for, 391 loan capital, on, 356 by whom payable, 256 consolidation of, and of nominal share capital, difference between, 256 consolidation or conversion of, whether is an issue, 256 INDEX INDEX . 229 Stamp duty—continued definition of, 256 duty, when may be repaid on conversion of, 25% not to be charged, when, 356 rate of, 356 statement to Inland Revenue Commissioners, 356 when need not be rendered, 356 loans repayable at a premium, 362 marketable securities, on, 359 bearer securities, 359, 360 colonial securities, 361 definition of, 363 doubt as to sufficiency of stamp on, as to, 375 foreign share warrants, etc., 301 issue, what is an, 363 loans repayable at a premium, 362 quotation of, in official list, not necessary, 363 reduction of duty, 361 securities to bearer, rates of, 360 at lower rate in substitution for like securities, 3u_ substituted securities, 361 memorandum of association, on, 7, 3, 354 as a deed, 7, 354 money, on document for payment of a sum of, 364 mortgage security, on registered, 382, 386 notary public, protest by, duty on, 367 how denoted, 367 penalties for evasion of, 352, --policies of insurance, 367-277 accident, in case of, 371 agreements guaranteeing payments, 37. alterations in policy, 370 assignee of, secretary should see assignment properly stampe 377 compounding for duty in case of, 372 contract of sea insurance, what covered by, 367 definition of, 367 duty pavable, applicability of Stamp Act, 1891, 368 employers’ liability, 371 endowment, duty on, 371 evidence, as to being, after payment of penalty, 370 extension of definition of accident, 371 Finance Acts, 1901 and 1903, effect of, 369, 37¢ incapacity from sickness, etc., 371 life, on, 370, 377 stamped policy after receiving premium, 371 Married Women’s Property Act, 1882, under, how chargeable, 371 mistakes in, rectification of, 370 mutual marine insurance association, where policy issued by, 369 sea, on, 367-370 premium, according to rate of, 368 sum insured, according to, 368 necessary specifications in, 368 ships under construction, policy for, how treated, 370 signed or underwritten, as to stamping after policy is, 37¢ elie 970 Stamp duty—continued subscribers or underwriters, names of, in sea insurance, 368 time, policy for, 368, 369 continuation clause, 369 duration, 369 voyage, policy for a, rate of, 368 waiver of omission to issue, 36g post-dated cheques, as to, 365 powers of attorney, on, 274, 384 production of instrument apparently duly stamped, 375 prima facie receivable in evidence, etc., 375 where any doubt, procedure on, 375 promissory notes, rates of, 364, 386. And see bills of exchange supra proxy on, 139, 140, 384 executed abroad, 140 receipts, on, 372, 384, 389 bank entries initialled by cashier, 373 banker’s receipt on allotment letter, 55 barrister’s fees, 373 bill of exchange, 374 cheque, for payment by, 373 contra accounts, 373 definition of, 372 donation to charity, 373 duty on, how denoted, 372 exemptions from duty on, 374 bankers, 374 liability if not duly stamped or refusal, 372 promissory note, for, 374 refusal to give, penalty for, 373 salaries, wages, etc., for, 374 signing a, not necessary, 372 superannuation allowance, for, 374 taxes, for, 374 words, no particular form of, necessary, 373 reconstruction of company’s capital, 355 registered bonds, on, 360 registering officer, discretion on registering transfers, 375 registration of company, on a, 354, 379 table of duties on, 379 renunciation, letters of, on, 55, 357, 383, 388 how denoted, 55, 357 salaries, wages, etc., receipts for, 374 sale, agreements for, on, 357 sea insurance policy, 367 scrip certificate, on, 383, 389 seal, duty on agreements under, 357 secretary’s duties as to, 354, 374 adjudication stamps on gifts infer vivos, must see if, 376 may refuse register of transfer if none, 376 as regards registration, 354 duties and liabilities, 374 life insurance company, precautions in case of, 377 Inland Revenue Commissioners, secretary may obtain opinion of, 375 . instruments produced to, should ascertain if duly stamped, 375 penalties for registering, etc., not being duly stamped, 375 INDEX INDEX / Stamp duty—continued procedure if any doubt, 37; transfers, duties on, 77, 358 service, on agreements of, 357 shares credited as fully or partly paid, 377 contract constituting allottee’s title, 377 share capital, on, 354, 379, 387 acquisition of business for share, liability on, 355 Finance Act, 1927, effect of, on, 210, 355 adjudication, 376 consolidation, etc., of, 355 contracts of allotment, 377 duty on first and further increase, when payable, 353 increase of authorised, on, 354 increase of registered, meaning of, 354 ‘ nominal share capital,” meaning of, 3,4 transfers of, 358, 382, 390 voluntary, 390 share warrants to bearer, on, 115, 359, 3¢, foreign, 360 impressed stamp, 115 lost, indemnity, for, 176 secretary’s liability, 115, 116 Stamp Act, 1891, provisions relating to, 352, 354, __ bill of exchange, definition of, 364 summary of effect of Act on, 36 evidence, as to stamps receivable in, marketable security, definition of, transfers of shares, etc., 358 Stamp Duties Management Act, 1891, : statutory company, transfers of sharers statutory declaration, on a, 357 exemptions from, requisites for not applicable, when, 2<f only liable to one duty, 358 substituted security, in case of, tables of, 379-384 taxes, receipts for, on, 374 transfers, on certain, 391 transfers of shares, stocks, etc., 77, Acts relating to, 358 ad valorem duty, 358, 382, 39¢ exceptions, 358, 391 consideration expressed, calculated on the, 77, 358 directors may refuse to register, when, 78 executor or administrator, by an, 358 gifts inter vivos. And see voluntary dispositions infra secretary’s discretion as to adjudication stamp, 29} miscellaneous transfers, 391 new trustee, on appointment of, 39: nominal consideration, for a, 78 information for registering officer, what necessary, 391 on sale, 390 opinion of Inland Revenue Commissioners if stamp appears insufficient, 375 rates of duty on, 382, 3g: secretary’s duty as to, 7~ sent unstamped to colony Oo 972 Stamp duty—continued time limit after return, 359 to residuary legatee, 391 trust, as to notice of a, 377 voluntary disposition ¢nter vivos, on a, 358, 376, 390, 395 adjudication stamp, on, 376, 390 opinion of Inland Revenue Commissioners required prior to, 375 transfers not within ad valorem duty schedule, when, 358, 391 trust deeds, on, 360 debenture stock, how treated, 360 trust, notice of, as to, 377 voluntary dispositions inter vivos, on, 358, 376, 390, 395 wages, receipts for, 374 Stannaries provisions of Act of 1929 as regards winding-up in, 706-708 Statement in lieu of prospectus, 7, 47 allotment of shares, statement to be filed before, 48 delivery to registrar, 47 difference between, and prospectus, 47 directors’ shares to be paid for, 48 directors to sign, 47 form of, 47 on private company becoming public, 772 where no public issue, 779 particulars of, similar to those in a prospectus, 47 private companies need not file, 291 prospectus not issued by company, in cases of, 48 statutory declaration filed with registrar, 48 underwriting commissions, disclosure in, 96 Stationery, etc., 13, 149 Statute of Limitations dividends, payment of, barred by, 187 Statutory Companies (Redeemable Stock) Act, 1915 companies to raise redeemable debenture or preference stock, 29% resolution of special meeting necessary, 297 irredeemable preference shares, debenture, stock, etc., 2q8 object of Act, 298 resolution as to stock being redeemed, 298 restrospective operation from 4th Ausgust, 1914, 298 title of, 297 to what companies applicable, 297 to what stock only applicable, 298 Statutory company, 295 ef seq. Act of Parliament, exists under a special, 295 applications for special Acts, 296 formalities to be undertaken, 296 Parliamentary Committees consider, 296 secretary‘s duties on, 297 shareholders of existing company to consider, 297 borrowing by issue of debenture bonds, 301 borrowing on mortgage or bond, 3o0r Companies Clauses Act, 1845 borrowing on mortgage or bond, 301 debenture stock, creation of, 301 objects and title, 296 principal addition to, 296 INDEX INDEX. +15 Statutory company—continued register of shareholders to be kept (s. 9), - Scottish companies, as regards, 313 Companies Clauses Acts, 1869, 1888 and 188, = advantages of, 296 articles of association, resemble, 297 consolidation of shares into stock, register of holders, 300 copies of register of shareholders, right to, 100 Court, decisions of, regarding ordinary companies, whether applicable, 299 debenture bonds, issue of, 301 debenture stock of, company may redeem, 297 creation of, 301 definition of, 295 differ from ordinary limited companies, how, 299 executor, attorney of, registration in case of, 304 if also a beneficiary registration without transfer, 304 transfers, execution by all if more than one, 304 fees on transfer and transmission, 305 general meetings, business transacted at, 299 notice, 299 proxies, 299 quorum, 299 shareholder a corporate body, 299 infant holding shares in a, 104 inspection of register, none, 300 inspection of shareholders’ address book, 300 legal personal representatives, registration of transfers by, 303 letters of administration, as to fees on, 305 limited," word, not necessary for a, 299 meetings of, 299 objects of, 295 particular undertakings, incorporation of special Acts relating to (e.g. railways, etc.), 297 preference stock, redemption of, 297 proxies, blanks in, must be filled up by member, 299 public utility, one of, 295 redeeming debenture or preference stock, 297 possible effect of, 298 reduction of capital, effecting without applying to the Court, 298 register of consolidated stock holders, 301 register of shareholders, must keep a, 300 alteration of, evidence, 304 copy of, but no inspection, 100, 300 seal of company to be attached, 300 registered, is not, 299 registration by legal personal representatives, 303 resolutions for redeeming preference or debenture stock, 29% Scotland, in, 313 seal on register of stockholders, 300 secretary, 297, 299 applications for special Acts, on, 297 special meeting, to summon, 297 new legislation, should acquire knowledge of, 2c remuneration of, 299 special Acts, should have knowledge of, relating to his own company, 207 974 Statutory company—continued transfers of shares, duties on, 302 endorsement of deed, 302 issue of new certificate, 302 legal personal representatives, registration in case of, 303 transmission, declaration of, to be produced to, 304 duties on, 303 entry of name of representative, 303 consent of board not necessary, 303 evidence of right of representative, 303 shares, consolidation of, into stock, 300 transfers of, 301, 302. And see supra special Act contains the powers of a, 295 applications for, procedure on, 296 parliamentary committees consider, 296 should always be consulted, 296 what Acts usually incorporated in, 297 standing orders relating to private bills must be considered, 297 Statutory Companies (Redeemable Stock) Act, 1915, 297 And see the Act supra stock, redeeming of preference or debenture, 297 effect of Act of 1915 on raising, 298 register of holders of consolidated, 301 transfers of shares, 301, 302 calls on, 301 consideration to be stated, 30:1 deed, must be by, 301 fee on, 305 form of, 301 joint holders, whether can be limited in numbers, 303 legal interest, when passes, 302 more than one account on same form, as to, 303 secretary, duties of, on, 302 in case of registration by personal representatives, 303 transmission. And see Executors ; Representatives supra authenticated by declaration, 304 death or bankruptcy, on, 303 difference between, and ordinary companies, 303 duty of secretary on, 303 entry of representative on register, 303 may be entered in personal capacity, 303 representative may sell, 303 fee on, 305 representative’s capacity not to be entered, 304 secretary’s duties on, 303 when may be done, 303 trusts appearing on register, 307 what is a, 295 Statutory corporation corporation under Royal Charter and, distinction between, 12 Statutory declaration duty on, 357 liquidator, by, as to his appointment, 232 minimum subscription, as to, 47, 48 prospectus, where none, 48 shares, directors’ holdings, etc., to be filed, 47, 48 share certificate, verifying loss of, 43 INDEX INDE . J Statutory declaration—continued solicitor, by, on formation of new company, stamp duty on, 357 Statutory meeting, 49, 129 ef seq. And see Meeting adjournments, 130 chairman can be compelled business at, 130 ‘calendar year,” meaning of, iz. date of, 129 default, court may order to be made good, on winding-up petition. 227 penalty for, 131 entitled to commence business, dates with reference to, 129 guarantee company. having share capital, must hold, 129 notice of, 122 form of, 125 statutory provisions as to, 122 whether all members entitled to, 122 ordinary meeting, is not an, 130 penalty for company not holding, 131 private company does not hold, 129, 290 resolutions not permissible unless after notice, 130 share warrants, holder, whether entitled to notice or. statutory provisions as to, 620 statutory report, 130. And see Statutory repor: what is the, 130 Statutory report, 122, 130 contents, 130 default in delivering to registrar, 131, 226, z27 cause of a winding-up, 226, 2-7 penalty, 131 notice of statutory meeting endorsed on, 122 verification of, 130 who entitled to, 130 Stock. See Shares annual return, particulars of. application for, form of, - conversion of shares inte, notice of, 33 shares, how differ from on, issue of, none directly, 33 joint names, registration in (Scottish companies), jo: redeemable (statutory companies). 297. And see company rights of stockholders, 33 share warrant in respect of, vshares, difference between, 3, statutory companies, register o transfer of, 33 transfer on sale, table warrants to bearer, Stock book, 115 Stock Exchange application for official quotation, conditions precedent, articles of association of a company, as tv bonds, as to, 416 quoted abroad, 4. certification of transfers Statutu: Gb a 976 Stock Exchange—continued charges for certificates forbidden by, 43 debentures, as to trust deed, 196, 414 dividends, forfeiture of, 188, 413 documents, list to be supplied to, 416 dominion, colonial and foreign companies, 420 further issues, 418 lien on shares, requirements when a, 93, 413 loans, as to, 421 permission to deal in new issues, 422 quoted on, offer for sale of shares, 60 reconstructed companies, 420 requirements, 412 ef seg. (App. D.) share and stock certificates, 415 shares, 416 transfers, as to, 68, 69 trust deeds, as to, 414 Striking off register dissolution of company by, 269 restoration, application for 269 Subdivision of shares articles must authorise, 34 general meeting, must be effected in, 34 how may be divided, 34 proportion of liability, 34 special resolution for, 34 Subscribers, 8. And see Shareholder ; Member allotment, money may be returned on, 49 Subscription minimum, 46 taxation, allowed on charitable, etc., 325 Subsidiary company, 180 balance sheet, particulars of, in, 178 directors, remuneration from, statement of, 147, 179 meaning of, 180 Sub-underwriting contract, 99 disclosure of, in prospectus, 99 release of underwriters on acceptance of, 99 Surplus assets, 262 articles of association, meaning of, in, 263 distribution among members, 262 memorandum and articles, provision in, 263 preference shares, right tc participate in, 38 Surrender of shares, 35. 95 cancelled, whether shares are, 95 liability to forfeiture, valid notwithstanding, 95 membership ceases on, 41 reduction of capital, whether involves, 95 Survivorship, 88 joint accounts (Scottish companies), 308. And see Scottish companies actual words necessary, 308 effect of absence, 308 } holder, death of one, after registration of survivorship cause. 308 Syndic company as executor, 88 INDEX INDEX 37, Table A accounts, 767 alteration of, by Board of Trade, 20 alteration of clauses in, by company, 20 articles of association, if none registered, Table A applies, 7, 20 audit, as to, 767 calls on shares, 92, 745 calls payable in advance under, 93 classes of shares, rights may be varied, 140, 743 conversion of shares into stock, 748 danger of having articles and Table A together, 21 death or bankruptcy of member, 84, 85 directors, powers and duties, etc., of, 752 proceedings of, 755 directors qualification shares, 143, 752 dividends and reserve, 756 forfeiture of shares, clauses as to, 747 general meetings, 749 proceedings at, 750 lien, 744 notices, 757 reserve fund clause, 190 seal, provisions as to company’s, 153, 753 shares, 743 transfer and transmission of shares, 84, 745 votes, provisions as to, 75I what is, 20 Table of Cases, €_7 Talon (share warrants), . Tasmania company legislation in, 824 Taxation. See Income tax, Stamp duty appeals against assessment, 330 architects, fees of, 330 assessments, 32I ef seq. assets, adjustments on, realisation of, 323 bank deposit, interest on, 324 charities, donations to, 325 dividends, 324, 332 dividends, deduction of Income Tax from, 332 foreign premises, 323 foreign taxation, 326 legal expenses, 37° machinery, 323 mills, factories, etc., mines, 326 periods of account, procedure, 32I railways, 322 reliefs from, 323 ef seq., 330 renewals, alowance of, 325 reserve, sums allocated to, ;. returns, 321, 322 solicitor’s fees, 330 stamp duty. See Stamp dut, subscriptions, trade, 325 trading profit, additions and deductions, ,. - 978 Testing clause (Scotland) transfers, form of, 309 Title deeds filing of, in office, 348 Trading profit, additions and deductions. See Taxation Transfer cases filing, for, 346 Transfer committee procedure of a, 79 Transfer of shares, 62 ¢f seq. And see Registration of transfer abroad, executed ; attestation of, 76 sent unstamped after execution, 359 ad valorem stamp duty on, 359 cases when not applicable, 359 agent or attorney, signature may be, by, 74 annual summary must show particulars of, 102 articles may require directors consent to, 68 attestation abroad, 76 attestation in case of illiterate or inflrm person, 74 one witness attesting another, not desirable, 77 attorney, power of, procedure if carried out by, 74 bank, to or by, as to stamp duty on, 377 blank, 82 mortgagee of shares, notice to purchaser, 83 where given, 83 books, transfers should be registered before closing of, 79 calls, liability of transferor pending, 81 certificates attached, #8 cancellation of, 78 certificates, preparation of, 8o in case of joint accounts, 80 certificates, procedure on issuing new, after transfer, 79 certification of, 70. And see Certification of transfers notice of, form, 457 checking transfers, procedure of transfer committee, 79 colonial and foreign companies, liability to stamp duty, 384 colonies, transfers sent unstamped after execution to the, 359 corporate body, to a, 76 deceased member, personal representative may make, 85, 89 deed, blank transfer forms where transfer not by, 82 name of transferee where deed necessary, 82 deed of transfer to be stamped with date, etc., 78 deed, whether need be by, 82 directors’ right of refusal, 68, 78 in case of improper stamping, 77 distringas, notice in lieu of, 80 duplicate certificate, 79 duty of transferor, 82 duty on transfers, 358, 375, 382, 390 equitable right until registration, 81 estoppel in cases of forged, 83 executors to be described as executors on a, 7; fees on, go statutory companies, 302 filing, 349 forged, 83 bona fide holder for value position, 83 form of, 69, 454 INDEX INDEX “73 Transfer of shares—continued articles usually provide for, 69 same document not desirable for two or more transfers, 77 verbal transfers no longer legal, 68 gifts, inter vivos, duty on, 358 husband or wife of transferor as witness to transfers, 77 husband’s right in wife’s property on a (Scotland), unnecessary, 307 illiterate person, attestation in case of, 77, 308 infant, 70, 104 by, order of Court necessary, 108 voidable, is, 106, 109 to. company should repudiate, 105 voidable, 106 instrument of transfer, registration unlawful without, 67 joint accounts, certificates, in case of, 80 joint holders as survivors, 77 legacy, duty on a, 39I legal effect of, 81 legal interest in, when passes in case of statutorv companies, 302 lien of company should be discharged before, 93 loan, as security for, duty on a, 391 lost certified transfer, 79 married women, by Scotland ), 307 minutes, how referred to in, 336 nominal consideration, stamps in case of transfers for, 78, 376, 391 form of notice on presentation, 78, 455 registering officer's duty, 375 notice in lieu of distringas, 8o notice to transferor on lodgment for registration, 75 ‘ office bearers ' by (Scotland), 306 partnership, to, 76 personal representative, by ; validity of, 85 power of attorney, by, 74. And see Power of attorney prevention of registration of, 8o private company, shares of, 7, 288. And see Private companies members’ right of pre-emption. 28a procedure on, 67 et seq. receipt for, 74 form of, 458 refusal to register, notice of, must be given, register of, form for board meeting registration of, 74 may be restrained . form of, 461 residuary legatee, to, 391 restraint, form of notice to party lodging a, 461 restrictions on, in case of private companies, 288 right of, 67 Scottish companies, by trustees in, 306. And see Scottish company seal, under 70 share register, posting of transfers into the, 79 signature to, both transferor and transferee, 70 transferor, of, to be compared with record in office. stamp duty on, 77, 385 ef seq. And see Stamp dvtad valorem, in case of sale, 358 colonies or abroad, sent unstamped to, directors mav refuse when not dulv stampec.. NUL 980 Transfer of shares—continued Inland revenue circular as to, 77, 385 ef seq. opinion of I.R. Commrs., 375 voluntary dispositions inter vives, 358. And see voluntary disposition, infra statutory companies, in, 301, 302 deed, must be by, 301 Stamp on, 301 fees, 302 form of, 3o1 legal interest in, 302 personal representatives, by, 303 Stock Exchange requirements, 68, 6g transferee’s title on registration, 81 transferor, duty of on a, 82 transmission of shares, how differs from, 83 trustees may be registered in representative capacity (Scottish Companies), 306 verbal, now prohibited, 68 voluntary dispositions, unter vivos, duty on, 358 adjudication stamp, 358, 376 value of shares or stock determines rate, 358 winding up, original shareholders’ liability on a, 83 witnesses to, 77 Transmission articles of association, executor’s rights usually fixed by, 83, 84 compelled, how may be, 8g executor, company may be, 88 executor, death of sole, 85 executors, title to shares, 85 transfer by, 85 where noted on register, 8g fees on (statutory companies), 305 object of clause, 84 registration in personal capacity, 89, 303 statutory companies, how differ from ordinary companies as regards, 303 authentication of, 304 personal representative registered in personal capacity, 303 Table A, provisions, 85 voting rights upon, articles usually provide for, 136 Transvaal, see South Africa (Union of), 851 Travelling audit, 169 Travelling expenses advances for, how dealt with in accounts, 167 Trusts. See Company company not bound to recognise, 64 not to be entered on register, 63, 614 Scottish companies, recognised by, 306 Trust Corporation, 88 Trust deed, 195 advantages of, 195 bearer debentures, even if secured by, 198 charge by way of legal mortgage, 195 copy of, debenture holders entitled to, 204 debenture holder may sue by virtue of, 19€ deed, contents of, 195 demise to trustees, 195 INDEX INDEX ”) Trust deed—continued duty on a, 360 manager, receiver and, may be appointed under, 196, 205 meetings of debenture holders. 195 nature of, 195 provisions of, 195 registered holder or bearer, debentures may be payable to, 198 remedies of debenture holders under, 106 stamping of, 360 stock, register of holders of debenture, 204 Stock Exchange regulations as to, 196, 4 trustees for debenture holders, 165 action by, to enforce charge, 195 receiver may be appointed bv, without a, debentures secured, : Trustee for debenture holders action by, 196 property of company may become vested receiver may be appointed bv under trust deed, 195 voting rights of, when holdine sh. Trustees delegation of duties by. registration of, in Scottish ale WW ‘Ultra vires,’ 11, 12, 15 ef « acts, cannot be rati”™ auditor’s responsibit* resolutions, 158 Umpire appointment of, on reconstruction, 216 Underwriting commissions, 95 ef seq. absolutely, shares agreed for commission to be subscribed, disclosure of, 96 agreement, 98, ¢3 form of, 99 balance sheet to sta. brokerage, 98 broker’s commission, company, by, 95 articles should authorise, 95s, disclosure of amount, 96, of consideration for, 97 debentures, as to, 98 placing debentures, 98 discount, issue of shares at a, how affected . . how may be paid, 97 may be paid to individuals, 98 options to subscribe additional shares, g7 ‘prescribed’ form, disclosure in the, Qf filing of statement in, 96 private companies, 96, 29z reconstruction, 217 agreement, 21& if shares not taken liquidator’s duties practice on, 217 sale and tender of SI 982 Underwriting commissions— continued shares not to be used for, unless Act of 1929 complied with, 97 statement in lieu of prospectus, disclosure in, 96 statutory provisions as to, 588 summary of law on, 95 ef seq. ‘underwriting,’ agreement, meaning of, 98, 99 form of, 99 vendors ar promoters, by, 96 Unemployment Insurance Acts, 1920 to 1929 preferential payments under, 260 Unlimited company, 4, 10 companies, capital duty not payable by, 4, 381 memorandum of association of an, 10 private company, as, 289 registration of, as limited, 576 Unlimited liability alternate director, 156 directors or managers, of, 17 winding up, on, in cases of fraud, 258 Unsecured debentures, 108 INDEX Variation of rights, 37 Vacation of office directors, in case of, 147 Vehicles painting company’s name on, I4 Vendors commissions, payment by, 96 prospectus, names, etc., to appear in, 776 Verbal contract. See Parol Verbal notices, 15 Verbal transfers, 68 Victoria (Australia) company legislation in, 826 Voluntary winding up, 230. And see Liquidator, Winding up advertised, resolution for must be, 233 account of liquidator, 266 form of, 266 accounts, keeping of by liquidator, 244 actions by or against company after, 238 liquidator may apply to stay, 238 balance order, 254 bankruptcy law as to fraudulent preference, 248 Board of Trade, periodical returns to, 256 books, closing of, 238 business of company, how carried on, 245 circumstances causing, 23I closing of company’s books, 238 commencement of, 227 Companies Act, 1929, sections applicable to, 233 compulsory order, application by creditor or contributory for, 233 consequences of, 233 contributories, list of, prima facie evidence of liability, 253. And see Contributories corporate powers of company, how affected by, 239 Court, applications to the, by liquidator, 263 INDEX ~~ Voluntary winding up—continued creditors’, 234 committee of inspection, 235 absence of member from meetings of, 286 appointment of, 235 bankruptcy of member of, 236 company may nominate five members, 235 company’s nominees, how disqualified, 236 creditors’ representative, removal of, 236 meetings of, liquidator may call, 236 members, must be at least two, 236 profit by members of, forbidden, 236 purchase of company’s assets by, forbidden, 236 vacancies, how filled, 236 creditors’ meeting, 234, 256 advertisement of, 234 committee of inspection, appointment of, by, 25€ director must preside at, 234 liquidator, may nominate, 235 notice of, 234 proxies at, 234 statement of affairs, to be laid before, 235 airectors, powers of, in, 235 sanction of committee of inspection, 2335 sanction of general meeting, 235 sanction of liquidator, 235 liquidator, only one, in, 235 remuneration of liquidator, how fixed, 237 court, when fixed by, 237 vacancy in office of liquidator, 235, 206 criminal proceedings, 257, 258 Board of Trade, cost of, when borne by, 2 offences in connection with winding-up, Public Prosecutor, report by liquidator date of commencement of, 227 directors, managers, etc., prosecution of, for offenc fraud by, may incur unlimited liabilitv dismissal of company’s employees on a, 233 distribution of surplus assets after pavment . effect of, 233 execution creditor, when benefit can be retained. expenses of liquidation out of companv’s assets, final meeting in, 266 creditors’ of, 267 duties of liquidator, 241. And see Liquidator quorum at, 267 lack of, does not invalidate, «v fraudulent preference, 248 period to constitute, 248 what constitutes in, 248 invoices, etc., must state fact of liquidation, joint liquidators, powers of, 237 lien on company’s books, assets, . liquidation account, 256 Board of Trade, audit enforceauic investment of funds, 256 unclaimed assets, particulars ¢ liquidator, appointment evidence 0; 984 Voluntary winding up—continued delegation of authority, 240 liability of, 264 power to prosecute directors, 257 vacancy in office of, 233, 234, 266 liquidator, powers of, 240. And see Liquidator actions, stay of, by, 238 appointment of, on a, 234, 235 to accept shares, 493 to apply to the Court, 263 to call general meeting, 240, 255 to take possession of company’s books, etc., 240 when must pay stamp duty, 378 meetings summoned by liquidator, 255 members’, 234 creditors’ meeting, need not be held in, 234 directors, must make declaration of solvency, 231 liquidator, general meeting may appoint, 234 powers of directors in, 234 registrar, declaration of solvency to be delivered to, 231 remuneration of liquidator, 237 solvency, declaration of, necessary, 231 vacancy in office of liquidator, 234, 266 misfeasance proceedings, 247 notice of resolution, 233 onerous property, disclaimer of, 242 preferential payments, 259 priority of debts, 258 private examination in, 247 proof of debts in, 249 affidavit, by, 250 moral claim not admissible, 250 notice to creditors, 249, 250 what debts admissible, 250 who need prove in, 249 prosecution of directors, etc., by liquidator, 257 Public Prosecutor, report by liquidator to, 257 reconstruction, for purposes of, creditors meeting, 212 members’ voluntary winding-up, not now necessary in case of, 212 resolutions for, 230, 231 Rules (Winding Up), 1929, 233 ef seq. secured creditors, 251 servants, dismissal of, on, 233 set off, in, 254 contributory, not by a, 255 secus if bankrupt, 255 sheriff, goods seized by, delivery up of, when obtainable, 249 solvency, declaration of, necessary for members’, 231 stamp duty arising in, liquidator to pay, 378 stay of actions, as to, 238 trade of company ceases on a, 233 liquidator’s duties, 245 transfers, how affected by, 253 unlimited liability of directors, etc., in case of fraud, 258 Votes articles may provide as to, 21, 28, 38 board meetings, at, 150 INDEX INDE x Votes —continued calls due, restrictions on, in case of, 136 casting, 135, 150 class of shareholders, 135 company representation, 136 death or bankruptcy, on, 136 debenture holders, by, 122, 135 debenture trustees, by, when holding shares, 137 directors, 135 first name on register, right as to, usually given to, 42, 131 infant shareholder, 104, 106 joint holders, 42, 136 minuting of, 339 non-members, when entitled to, 122 extraordinary or special resolution, not counied for, . number of, may be fixed, -personal representatives, by, poll, by, 137 register shows who can exercise right, 127 representative of another company, scheme of arrangement under s. 153, share warrants to bearer, in case of, 11 show of hands, by, 150 special voting rights who entitled to, 1-Vouchers secretary should check Wages, etc. accounting for, 170 preferential payment, in win.’ persons not falling within Warrants. See Share warrs: Wasting property depreciation of capi. Water mark desirable on share w. Wear and tear assessment, allowance ;. West Australia company legislation 1n, Wharncliffe meeting what is a, 297 Widows’, Orphans’ and Old Age Contributory Pensions Act, 1925 preferential payments under, 260 Wife as witness, 77 Window envelopes, 175 Winding up, 226 ef seq. And see Liquidator, Voluntary winding u accounts, liquidator’s duty to keep, 244 what it should show in final proceedings, Act of 1908, when still applicable, 226 date of commencement under, 2:7 Act of 1929, members’ and creditors: action against, or by, company in, ~ application to Court in, 263 article to prevent petition against, inv. assets, distribution of, 262 986 Winding up—-continued balance orders, 254 bankruptcy law as to fraudulent preference, application in, 248 books closed during, 238 disposal of, 267 should show company’s liabilities, 249 calls made during, 252 capital only available in, special resolution authorising, 43 commencement of, 227 commence business, before becoming entitled to, 47 committee of inspection, 235 Companies (Winding-up) Rules, 1929, 233 éf seq. company limited by guarantee, ro compulsory, how brought about, 226 contracts made during, 239, 246 contributory, meaning of, in, 253 contributories, settling lists of, 252. And see Contributories costs of sums retained for, 258 Court, by, 226 creditors and contributories, list of, when dispensed with, 228 creditors’ petition, usually. on, 228 execution against assets, pending, void, 2238 jurisdiction of Court, 230 unregistered companies, 230, 320 Official Receiver, 227 presentation of petition by, 227 provisional liquidator, 227 report by, 229 statement of affairs, to, 229 private examination, 229 promoter, director or officer, fraud by, 229 public examination, 229 registrar, copy of winding-up order to be sent to, 227 order for dissolution to be reported to, 228 shares, transfer of, pending, void, 228 stay of, 229 voluntary winding-up, superseding, 228 creditors, priority of debts of, 258-262 creditors’ voluntary. See Voluntary winding-up criminal proceedings in, 257 Crown, whether right of priority in, 259 date of commencement, 227 debenture holder, when entitled to compulsory order, 196 debts, company deemed unable to pay, 226 delinquent directors, prosecution of, 257 disputed claims in, 250 dissolution of company, 268 dissolution void, declaration, 269 distribution of assets in, 258 ef seq distribution of surplus assets, 262 articles and memorandum, under, 267 execution creditors, position of, 248 falsification of books, 258 ‘ final meeting in, 266 floating charge shortly prior to, how far good, 252 fraudulent preference, 248 difficulty of proof, 248 onus on liguidator, 24& INDEX INDEX Winding up——continued infants, position of, 70 liquidator, accounts of, in final proceedings, 266 liquidator, duties of, on a, 241." And see Liquidator meetings, 255 final, 266 notice by liquidator of, 255. And see Liquidator member, liability of, 253. And see Contributories members’ voluntary. See Voluntarv winding up methods of, 226 notices in, how served, 238 petition for, procedure, 227 petition for, who may present, 227 powers of Court on hearing, 226 ef seq. preferential payments, 289. And see Preferential payment. proof of debts, 249 affidavit, by, 250 resolution for, 230, 231 forms of, 163 notice of, to be advertised, 233, 2-Rules of 1929, 233 et seq., 803 (App. secured creditors, position of, in 251 duties of liquidator, in case of, steps available for, 251 servants of company, 233 set off, doctrine of, in, 254 sheriff, goods seized by, 249 solicitor may be employed in, .._ taxed costs of, 258 surplus assets, distribution o. ander supervision, 230 date of commencement of, effect of, 230 liquidator’s powers, 230 unregistered companies, of, 230, 320 voluntary. See Voluntary winding Witness to transfer, 7 Withdrawal application for shares, 54 Witness Scotland, to deeds in, 309 transfer of shares, on a, 77 address and description of, 5 - husband or wife of transferor, : Woman shareholder, marriage of, €_ subscriber, may be, 8 Workmen’s compensation a preferential payment, 259 Workmen’s Compensation Act, 1925 (s preferential pavments under. eS / PRINTED BY \v. HEFFER AND SONS LTD CAMBRIDGE ENGLAND ANY RA RN NW HM -¢ WINDING-UP RULES R00 Rules or any directions given thereunder are not required to prove “heir debts or to any voluntary liquidation meeting. ” 138. A creditor shall not vote in respect of any unliquidated or Cases in contingent debt, or any debt the value of which is not ascertained, ih cediion nor shall a creditor vote in respect of any debt on or secured by a current bill of exchange or promissory note held by him unless he is willing to treat the liability to him thereon of every person who is liable thereon antecedently to the Company, and against whom a Receiving Order in Bankruptcy has not been made, as a security in his hands, and to estimate the value thereof, and for the purposes of voting, but not for the purposes of dividend, to deduct it from his proof. 139. For the purpose of voting, a secured creditor shall, unless votes of secured he surrenders his security, state in his proof or in a voluntary creditors liquidation in such a statement as is hereinafter mentioned the particulars of his security, the date when it was given, and the value at which he assesses it, and shall be entitled to vote only in respect of the balance (if any) due to him after deducting the value of his security. If he votes in respect of his whole debt he shall be deemed to have surrendered his security, unless the Court on application is satisfied that the omission to value the security has arisen from inadvertence. 140. The Official Receiver or Liquidator may within twenty- Creditor required eight days after a proof or in a voluntary liquidation a statement o8¢, "P estimating the value of a security as aforesaid has been used in votin g at a meeting require the creditor to give up the security for the benefit of the creditors generally on payment of the value so estimated with an addition thereto of twenty per cent. Provided that where a creditor has valued his security he may at any time before being required to give it up correct the valuation by a new proof and leduct the new value from his debt, but in that case the said addition of twenty per cent. shall not be made if the security is required to be oiven up. 141. The Chairman shall have power to admit or reject a proof for the purpose of voting, but his decision shall be subject to appeal to the Court. If he is in doubt whether a proof shall be admitted or rejected he shall mark it as objected to and allow the creditor to vote subject to the vote being declared invalid in the event of the objection being sustained. Admission and rejection of roofs for purpose of voting. 142. For the purpose of voting at any voluntary liquidation meetings a secured creditor shall unless he surrender his security lodge with the Liquidator or where there is no Liquidator at the Registered Office of the Company before the meeting a statement giving the particulars of his security, the date when it was given and the value at which he assesses it. Statement of Security. 143.—(1) The Chairman shall cause minutes of the proceedings at Minutes of ‘he meeting to be drawn up and fairly entered in a book kept for Meeting. " L | 7 aD 4) >) = bem San er So -— — — 0 2 ~~ LD a SL Mm NN < ~N J NN ) 4