Articles to be printed. Effect of regis tration. Contributories. Alteration of Articles cannot authorise any thing ultra vires. Court will cile memorandum and articles. is but small, of preparing and registering a full set of articles is amply 16. The articles of association shall be printed, they shall bear the same stamp as if they were contained in a deed, [i. e., a 10s. stamp], and shall be signed by each subscriber in the presence of, and be attested by, one witness at the least, and such attestation shall be a sufficient attestation in Scotland as well as in England and Ireland: when registered, they shall bind the company and the members thereof to the same extent as if each member had subscribed his name and affixed his seal thereto, and there were in such articles contained a covenant on the part of himself, his heirs, executors, and administrators, to conform to all the regulations contained in such articles, subject to the provisions of this Act; and all monies payable by any member to the company, in pursuance of the conditions and regulations of the company, or any of such conditions or regulations, shall be deemed to be a debt due from such member to the company, and in England and Ireland to be in the nature of a specialty debt. As to the effect of registering the memorandum and articles, and of the issue by the registrar of the certificate of incorporation, see supra, P. 64. As to the liability of present and past members to contribute in the winding up, see Lindley, 1360, et seq.: Buckley, 28, et seq. As to the alteration of the articles by special resolution, see infra, "Resolutions." As to the clauses usually inserted in articles, see infra, p. 115, et seq. It is well settled that if the articles as originally framed, or as altered by special resolution, purport to authorise an act prohibited by law or otherwise ultra vires the company, or inconsistent with the memorandum, they are pro tanto void. Ashbury, &c., Co. v. Riche, L. R. 7 H. L. 671; Hope v. International Financial Soc., 4 C. Div. 327: Dent's Case, 8 Ch. 768; Guiness v. Land Corporation of Ireland, 22 C. Div. 349. But the Court will, if possible, support the articles, for the rule of conseek to reconstruction is that if contemporaneous documents can be read in two ways, in one of which they appear consistent, and in the other inconsistent. the former construction will be preferred. Per Jessel, M. R., Phænir Bessemer Co.'s Case, 44 L. J. N. S. 683; Anderson's Case, 7 Ch. Div. 75. Nevertheless this rule must be applied with great caution, e.g., the articles cannot be permitted to qualify or vary what the Act requires to be stated in the memorandum. Guiness v. Land Corporation of Ireland, ubi supra. As to appointment of officers by articles. Members entitled to copy of articles. Copies of Articles of association very commonly contain clauses purporting to appoint or authorising the appointment of officers-e.g., managers, secretaries, solicitors, engineers, and others, upon certain terms as to remuneration. See as to such clauses, supra, p. 60. As to each member being entitled to a copy of the memorandum and articles, see supra, p. 72. Where articles of association have been registered, a copy of every special resolution for the time being in force is to be annexed to or em bodied in every copy of the articles of association that may be issued special after the passing of such special resolution. Section 54 of the Act. Where no articles of association have been registered, a copy of any special resolution is to be forwarded, in print, to any member requesting the same, on payment of one shilling, or such less sum as the company may direct. Ibid. resolutions. If any company makes default in complying with the provisions of the Penalty. above section, it incurs a penalty not exceeding 17. for each copy in respect of which such default is made; and every director or manager of the company who knowingly and wilfully authorises or permits such default incurs a like penalty. Ibid. Before registration the articles must be stamped stamp, and with a 5s. companies' registration stamp. with a 10s. deed Stamps. See supra, p. 73. I Form 117. ARTICLES OF ASSOCIATION. THE COMPANIES ACTS, 1862 TO 1880. Articles of Association of The Co, Limited. Articles of a company limited by shares. Interpretation. Special and extraordinary resolution. The office. The register. Month. In writing. This form of articles includes most of the clauses usually inserted, and it will be found that it can with little difficulty be so altered as to suit the circumstances of the great majority of the companies from time to time in course of formation. Various special clauses will be found, infra, Form 120, et seq., some of which may be occasionally required. PRELIMINARY. Some persons insert the words "It is agreed as follows" at the beginning of the articles, but the words are superfluous. By s. 16 of the Act (supra, p. 93), each member is bound by an implied covenant to conform to the regulations. 1. In these presents, unless there be something in the subject or context inconsistent therewith, "Special resolution" and "extraordinary resolution" have the meanings assigned thereto respectively by the Companies Act, 1862 (ss. 51 and 129). "The office" means the registered office for the time being of the co. "The register" means the register of members to be kept pursuant to Section 25 of the Companies Act, 1862. "Month" means calendar month. 66 In writing" means written or printed, or partly written and partly printed. Words importing the singular number only include the plural number, and vice versa. Words importing the masculine gender only include the feminine gender. Words importing persons include corporations. Some persons insert a long list of words and expressions in the interpretation clause, but the practice is not to be commended. Probably several of the above might be omitted, e. g., "special" and "extraordinary "resolution, but they are retained because directors and members are not always very familiar with the Act, and it may therefore be convenient to refer thereto. But there seems little use in saying that "the directors" means the "directors for the time being," that "member" means member of the company, and so forth. See also note to Clause 107 of this form. 2. The regulations contd in Table A. [in the first schedule to the Form 117. Companies Act, 1862] shall not apply to the co. Table A not to apply. See supra, p. 111, s. 15 of the Act. co, Seal to be affixed to 3. The directors shall forthwith, in the name and on behalf of the enter into an agreemt with in the terms of the draft a copy agreement. whereof has, for the ppose of identification, been endorsed with the signatures of A., B., and C., three of the subscribers hto, and shall carry the sd agreemt into effect, with full power, nevertheless, from time to time to agree to any modification of the terms of such agreemt, either before or after the execution thereof. The above form will be used where plan II., supra, p. 1, is adopted, and the agreement is not mentioned in the memorandum of association. Where it is so mentioned the clause will run thus: "The directors shall forthwith affix the seal to the agreement mentioned in paragraph of Clause 3 of the company's memorandum of association, and shall carry, &c." Where the agreement is made with a trustee for the company before its incorporation, the clause will run thus : "The directors shall [or may] forthwith adopt on behalf of the company an agreement dated the day of - —, and made between of the one part, and |—— on behalf of this company of the other part, and shall [or may] carry the same into effect, with full power, nevertheless, at any time and from time to time, to agree to any modification thereof." Sometimes the words "a copy whereof is set forth in the schedule hereto," are introduced, but it is not generally advisable to set out the agreement in the schedule. The object of setting out the agreement in a schedule, is to give the members the fullest notice of its contents, for every member is taken to know the articles of association. Ernest v. Nicholls, 6 H. L. Cas. 401; Royal British Bank v. Turquand, 6 E. & B. 437 ; Ex parte Williams, 2 Eq. 218; Griffith v. Paget, 6 C. D. 517. But as a measure of precaution it is not now uncommon to add to a clause as above (3) the words, And every member shall be deemed to have notice of the contents of the said agreement, and to sanction the same. See further, p. 242. It used formerly to be the custom to insert in the articles a clause declaring that "the company hereby adopts the agreement, &c." But there are grave doubts as to the operation of such a clause, and it is now but rarely inserted. It probably does no more than authorise the directors to adopt the agreement. It is clear that such a clause cannot bind the company in favour, e. g.. of the vendor. Eley v. Positive Government Co., 1 Ex. Div. 88. Nor can the clause operate as a ratification of the agreement, "because it has been decided, and, as it appears to me, well decided, that there cannot in law be an effective ratification of a contract which could not have been binding on the ratifier at the time it was made, because the ratifier was not then in existence. It does not follow from that that acts may not be done by the company after its formation which make a new contract to the same effect as the old one, but that stands on a different principle." Per Jessel, M.R., 16 C. Div. 125; and see Pritchard's case, 8 Ch. 960; and infra, Form 139. It is obviously undesirable to leave matters on such a footing; for it is difficult to say at what stage a company becomes bound by acting on the agreement; and, accordingly, even where an adoption clause is inserted, it is expedient to execute an adopting contract as above. Form 12. Sometimes words are added to the clause, as follows: "And it is expressly declared that the validity of the said agreement shall not be impeached," &c. [as in Form 8]. Form 117. Company's shares not to be purchased. When business may be commenced. Allotment of shares. Shares may be issued subject to different conditions as to calls, &c. Instalments on shares to be duly paid. 4. The directors shall not employ the funds of the co or any pt thereof in the pchase of shares of the co. Where a company desires to obtain the quotation of its shares in the official list of the London Stock Exchange, such a clause as above should be inserted in order to comply with the rules. See infra, at end of "Prospectuses," for extract from rules. 5. The business of the co may be commenced as soon after the incorporation of the co as the directors shall think fit, and notwithstanding that pt only of the shares may have been allotted. This clause is often inserted, but is not necessary, for a company may unquestionably commence business, and the directors may make calls before the whole capital has been issued. McDougall v. Jersey Imperial Hotel Co., 2 H. & M. 528; Ornamental Woodwork Co. v. Brown, 11 W. R. 600; 9 Jur. N. S. 579. The above clause, however, is not useless, since it may prevent misunderstanding. The terms of the prospectus may, however, give a member an equity to restrain the company from commencing business with a totally insufficient capital. Elder v. New Zealand Land Co., W. N. 1874, 85; 30 L. T. 285; Sharpley v. Louth and East Coast Ry. Co., 2 Ch. Div. 663. But see Re Scottish Petroleum Co., 23 C. Div. 422. 6. The shares shall be under the control of the directors, who may allot or otherwise dispose of the same to such persons, on such terms and conditions, and at such times as the directors think fit, [subject, nevertheless, to the stipulations contd in the sd agreemt with reference to the shares to be allotted in psuance thereof.] The words in brackets will be omitted if no agreement is referred to in the articles. Section 25 of the Act of 1867 must be borne in mind; see supra, p. 10, et seq. As to whether shares can be issued at a discount, see supra, p. 39; as to bonus shares, supra, p. 40. Sometimes the words " and either at a discount, premium or otherwise," are inserted. 7. The co may make arrangemts on the issue of shares for a difference between the holders of such shares in the amount of calls to be pd and the time of paymt of such calls. Section 24 of the Act of 1867 provides that nothing in the Act of 1862 shall be deemed to prevent any company under that Act, if authorised by its regulations, as originally framed, or as altered by special resolution, from doing, inter alia, the above. It seems, therefore, expedient to take the power. 8. If, by the conditions of allotmt of any share, the whole or pt of the amount thereof shall be payable by instalmts, every such instalmt shall, when due, be pd to the co by the holder of the share. It is very common now to issue shares on terms that fixed sums shall be paid on application and allotment, and the balance or a considerable part thereof by instalments at short intervals. It is therefore expedient to insert such a clause as above. By the joint effect of the above clause, and of section 16 of the Act, each instalment will be a debt due to the company, supra, p. 112. In England and Ireland it will be a specialty, and, therefore, recoverable within twenty years. 3 & 4 Will. IV. c. 42, s. 3. Compare Cork and Bandon Ry. Co., |