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language of the 4th section puts the matter beyond doubt. But in this there is no eause for embarrassment; for all sensible persons, however wedded to the cost-book system, must prefer a company to work mines being formed with distinct and certain "limited liability," under the new act, to its being established upon the cost-book principle; even if out of the jurisdiction of the Stannaries that principle possessed force and legal effect which now it no longer does.
It may be summed up, therefore,—
1. That banking companies cannot be formed under the new act.
2. That insurance companies cannot be formed under the new act.
3. That companies established for working mines within the jurisdiction of the Stannaries can be based upon and regulated by the costbook principle, should that be preferred, to clear, definite, limited liability under the act. 4. That the companies formed for working mines out of the jurisdiction of the Stannaries, must, to obtain limited liability, be established under the new act; and that the cost-book principle applied or professed to be applied to such companies will be, for the future, a mere empty name, and will give no more protection to the shareholders than if the rules and regulations of such companies were perfectly silent as to a cost-book.
Let us now proceed to examine the steps which are requisite, 1stly, to establish a company, and 2ndly, to conduct its affairs according to the act of Parliament, after it has been established.
Under the Joint-Stock Companies Act, in existence since 1844, but now repealed, a company had to pass through two stages of existence before it could be said to be established. The first stage was the inchoate state of "provisional registration;" the second the more advanced state of "complete registration." Months of time frequently elapsed between these stages; and the second stage of existence could never be reached at all if the Registrar of Joint-Stock Companies should think fit to refuse his approval to the proposed deed of settlement of a company. The registrar thus possessed almost a veto upon a company's progess to complete registration; and he certainly could interfere to forbid arrangements among promoters, directors, and shareholders, such as they might desire, but which he might decide were contrary to his view of the act of Parliament that guided his decisions. Thus there was a check upon freedom of action, and the compliance with the formalities of the two classes of registration was tedious, complicated, and expensive. Deeds of settlement in every case were of enormous length, and always engrossed
by hand. The continuance of such a system would not be suitable to the age in which we live, which has given birth to "Consolidation Acts" of all kinds, in order to diminish law charges to the community, and establish uniformity of practice and habits amongst companies. By the new act these enormous deeds of settlement are in truth swept away; and the functions of the registrar are limited to recording the documents brought to his office, and granting certificates. As a matter of course, much simplicity and cheapness take the place of great complication and expensiveness.
Any seven persons, or any greater number than seven, can, in a single day if they wish, form a joint-stock company for any lawful purpose, with limited liability to themselves and to all shareholders joining them. They may obtain their capital without issuing a prospectus at all, if strong enough not to require such an appeal to the public; or they may issue a prospectus and obtain subscriptions, either before or after the registration and incorporation of a company in the manner next mentioned.
The first step these seven or more persons must adopt is, for each to sign a memorandum of association, engrossed or printed upon a 35s. deed stamp, containing the following things (section 5), that is to say :
1. The name of the proposed company;
2. The part of the united kingdom, whether England, Scotland, or Ireland, in which the registered office of the company is to be established;
3. The objects for which the proposed company is to be established;
4. The liability of the shareholders, whether it is to be limited or unlimited;
5. The amount of the nominal capital of the proposed company;
6. The number of shares into which such capital is to be divided, and the amount of each share, subject to the following restriction :That in the case of a company formed with limited liability, and called a limited company, the word "limited" shall be the last word in the name of the company.
Every subscriber of the memorandum of association shall take one share at the least in the company; the number of shares taken by each subscriber shall be set opposite his name in such memorandum of association, and upon the incorporation of the company he shall be entered in the register of shareholders as a shareholder to the extent of the shares he has taken (section 8).
The form of such a memorandum is given in the schedule to the act, which in its seventh section enacts that this form of memorandum shall be in all cases adopted, 66 or as near thereto as circum
stances will admit."
Thus some little latitude is given to the promoters or first directors of a company, or their professional adviser, to alter or add to the form of memorandum; but it will be wise in all cases to adhere to it as closely as possible.
The form of memorandum A printed in the schedule is as follows, and has relation to a supposititious company, "The Eastern Steam Packet Company":
Memorandum of Association of the "Eastern Steam Packet Company, Limited."
1st. The name of the company is "The Eastern Steam Packet Company, Limited."
2nd. The registered office of the company is to be established in 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 shareholders is "limited."
5th. The nominal 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 ad
dresses are subscribed, are desirous of being