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 signa- 
tories, 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 un- 
naturally 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 pro- 
visions were common in the articles of the old private com- 
panies. 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 re- 
quiring 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