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