Secretarial practice

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Monograph

Identifikator:: 1828236004

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

Document type:: Monograph

Title:: Secretarial practice

Edition:: fourth edition

Place of publication:: Cambridge

Publisher:: W. Heffer & Sons Ltd

Year of publication:: 1930

Scope:: viii, 987 Seiten

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter IX. Other matters relating to shares

Collection:: Economics Books

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 pro- visions 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.

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