RESTRICTIONS ON MEMBERS.

interested in

A member of the co shall not [without the co's consent] either solely Form 265. or jointly with, or as manager or agent for any other person, directly or Forfeiture indirectly carry on or be engaged or concerned or interested as a share- where holder or otherwise in any business which the co is authorised to carry rival concern. on, and the directors may by resolution forfeit the shares of any member who acts in contravention of this provision, and Clause 30 [see supra, p. 123] shall apply.

In a private company a clause as above is not unusual. Sometimes it is confined to directors, and occasionally provision is made for notice before forfeiture, and sometimes provision for liquidated damages for breach is inserted. See supra, p. 9.

A person who ceases to be a member of the co shall not at any time Form 266. within five years, to be computed from the time when he so ceases to be a member, either solely, &c. [Form 265] in the business of a within 100 miles of the City of

Provisions as above are very common. Sometimes they are restricted to the persons who have held a particular class of shares intended for employés.

Conversion of Shares into Stock.

These clauses are commonly omitted; in the case of a private company they are of little practical use.

Increase and Reduction of Capital.

See Form 117. Where the issue of shares is restricted as in Forms 258 or 259, supra, the new shares are usually made subject to the like restrictions.

Proceedings at General Meetings.

Sometimes it is provided that a poll may be demanded by any member, and that every poll shall be taken at the meeting without adjournment, and occasionally that the chairman shall not have a casting vote.

Directors.

Retiring member not to compete.

A., B., and C. shall be the first directors and each of them shall be Form 267. entled to continue in office so long as he holds capital of the nominal Directors. amount of -7. at the least.

In the case of a private company it is not unusual to provide that some person or persons, e. g., the founder or founders, shall be entitled to hold office for a term of years or for life, provided he or they continue to hold a certain number of shares, and sometimes a founder is empowered at any time and from time to time to appoint and remove directors or some of the directors. Occasionally a founder is empowered to authorise his executors or trustees whilst holding a certain number of shares to appoint directors, and sometimes it is provided that the executors or administrators or trustees of the will of a founder, so long as a certain number of shares remain standing in his name or

Form 264. proceedings shall not subsequently be impeached by any person. But the co shall not act under this clause unless and until the fair value has been ascertained and pd to the co in trust for the owner or the amount mentd in the last preceding clause hereof has been duly deposited as thereby provided.

8. If by reason of default on the pt of the purchasing member the pchase is not completed within fourteen days after the fair value of the shares has been ascertained, the owner may, by notice in writing to the purchasing member, annul the contract for sale.

9. In the seven last preceding clauses hereof "the owner" means the registered holder of the shares and the exs or ads of a registered holder whilst any shares or stock remain standing in the name of such registered holder.

10. Any such reference as afsd shall be made to two persons, one to be appointed by each of the parties in difference, and the cost of and incident to the reference and award shall be in the discretion of the arbitrators or umpire who may determine the amount thereof, or direct the same to be taxed as between solor and client, or otherwise, and may award by whom and to whom and in what manner the same shall be borne and pd, and the submission may be made an order of the High Court of Justice on the applicon ex parte of either party and the death of any party shall not operate as a revocation.

If the regulations contain provisions for arbitration, this clause will not be requisite.

11. The co in general meeting may from time to time determine the order or manner in which the members shall be at libty to tender for the shares to be taken, pursuant to any such requisition as afsd, and generally as to their rights or privileges in regard thereto: And until otherwise determined, the co, as soon as conveniently may be after the service of the requisition, shall give notice in writing to each member specifying the share, and stating that he is at libty within a time to be limtd therein, to tender for the pchase of the whole or any pt thereof at the fair value as provided by the co's articles of association, and each member shall be at libty to make a tender in writing, delivered at the office within the time so limtd for such shares, or any pt thereof, and the co, on behalf of the owner, shall accept the tenders so made, if sufficient shares be available, and if the shares tendered for exceed the amount available, the tenders shall rank for acceptance in such order as shall be settled by lot, and the directors may cause lots to be drawn accordingly, and no director shall be precluded from tendering, and any difficulty as to apportionment shall be settled by the directors.

Forfeiture.

Occasionally in a private company the provisions for forfeiture may be omitted, it being considered that the provisions for lien are sufficient

RESTRICTIONS ON MEMBERS.

interested in

A member of the co shall not [without the co's consent] either solely Form 265. or jointly with, or as manager or agent for any other person, directly or Forfeiture indirectly carry on or be engaged or concerned or interested as a share- where holder or otherwise in any business which the co is authorised to carry rival concern. on, and the directors may by resolution forfeit the shares of any member who acts in contravention of this provision, and Clause 30 [see supra, p. 123] shall apply.

In a private company a clause as above is not unusual. Sometimes it is confined to directors, and occasionally provision is made for notice before forfeiture, and sometimes provision for liquidated damages for breach is inserted. See supra, p. 9.

A person who ceases to be a member of the co shall not at any time Form 266. within five years, to be computed from the time when he so ceases to be a member, either solely, &c. [Form 265] in the business of a within 100 miles of the City of

Provisions as above are very common. Sometimes they are restricted to the persons who have held a particular class of shares intended for employés.

Conversion of Shares into Stock.

These clauses are commonly omitted; in the case of a private company they are of little practical use.

Increase and Reduction of Capital.

See Form 117. Where the issue of shares is restricted as in Forms 258 or 259, supra, the new shares are usually made subject to the like restrictions.

Proceedings at General Meetings.

Sometimes it is provided that a poll may be demanded by any member, and that every poll shall be taken at the meeting without adjournment, and occasionally that the chairman shall not have a casting vote.

Directors.

Retiring member not to compete.

A., B., and C. shall be the first directors and each of them shall be Form 267. entled to continue in office so long as he holds capital of the nominal amount of- -7. at the least.

In the case of a private company it is not unusual to provide that some person or persons, e. g., the founder or founders, shall be entitled to hold office for a term of years or for life, provided he or they continue to hold a certain number of shares, and sometimes a founder is empowered at any time and from time to time to appoint and remove directors or some of the directors. Occasionally a founder is empowered to authorise his executors or trustees whilst holding a certain number of shares to appoint directors, and sometimes it is provided that the executors or administrators or trustees of the will of a founder, so long as a certain number of shares remain standing in his name or

Directors.

Form 267. in the name of the trustees of his will, may appoint directors. Occasionally any shareholder entitled to a specified proportion of the capital is authorised to appoint one or more directors or a specified proportion of the board. Where the founder or founders hold office on special terms in conjunction with other directors appointed by themselves or otherwise, they are generally described in the articles as "the governing directors," or "the permanent directors,” or "the life directors," whilst the other directors are called the ordinary directors. Sometimes, however, it is provided that all or some of the directors shall retire each year, and very commonly Form 275, infra, is used. Occasionally, e.g., in the case of single-ship companies [supra, p. 103,] the original owners or some of them, or some firm in which they are interested, are appointed managers" upon special terms, and subject to the control of the company in general meeting. Where this is done the articles generally provide that the company may at any time or in certain events appoint directors and determine their rotation, qualification, remuneration, &c.

Form 268.

Permanent directors.

Form 269.

Managing director.

Vacancy by death.

Subsequent vacancies.

Special arrangement.

66

A., B., and C. shall be the first directors, and each of them shall be and hereof to retain office so long as he entled, subject to Clauses. holds not less than of the shares specified [or to be allotted to him pursuant to the agreemt referred to] in Clause hereof, and whilst holding office by virtue of this provision shall be called a permanent director, and if by resignation he ceases to be a permanent director, he shall, if qualified, be deemed to have been thereupon elected to be an ordinary director.

Sometimes the following words are added:-" And shall be entitled to hold office as such so long as he lives [or until the second ordinary meeting next following the date when he ceases to be a permanent director]."

1. The sd A. shall be the first managing director, and shall, subject only to Clauses hereof, be entled to hold the office for life, but

may resign at any time.

2. If the sd A. vacates office by resignation, he may fill up the vacancy by appointing some competent person to the office, provided such appointmt be made by writing under the hand of the sd A. within fourteen days after he so vacates office.

3. If the sd A. vacates office by death, and at the time of his death he is entled to not less than one-third of the issued capital, such person shall succeed him as managing director as shall be appointed by his will, or any codicil thereto, or, in default of any such appointmt, as shall be appointed by his exs or ads, within six weeks after his death.

4. Subject to Clauses 2 and 3 hereof, any vacancy in the office of managing director may be filled up by an extraordinary general meeting, and any extraordinary general meeting may, at any time, subject to any arrangemt made pursuant to the next following clause hereof, remove any general manager except the sd A. from office. For the pposes of exercising any of the powers conferred on a general meeting by this clause, any member or members holding not less than shares may convene an extraordinary general meeting.

5. Any managing director as afsd may be appointed for a fixed term

or otherwise, and upon such terms as to remuneration, and in all other Form 269. respects as may, with the sanction of the co in general meeting, be arranged.

1. The firm of A. B. & Co., which now consists of the first four sub- Form 270. scribers hto, and their successors, shall be the managers of the co, so Firm appointed long as they are able and willing to act as such, and any firm which, by managers. death or retiremt of any partner, or by the admission of any new partner, or otherwise, shall from time to time, and at any time hereafter, succeed to the business heretofore carried on by the sd existing firm, shall, for the pposes of this clause, be deemed the successors of the sd existing firm [provided that some member of the sd existing firm is a member of such succeeding firm], and the co shall accordingly enter into an agreemt with the existing firm in the terms of the draft, a copy of which is set forth in the 3rd schedule to the draft agreemt mentd in Clause 3 hereof. 2. The qualification of the managers shall be the holding by them, or some one of them, of capital of the co of the nominal value of 1. The managers may act before acquiring their qualification, but shall vacate office if they do not acquire it within three months after becoming managers.

3. The managers may regulate their proceedings in such manner as they from time to time think fit, and they shall be under no obligation to hold board meetings; and, unless otherwise arranged among themselves, each member of the firm which shall for the time being be manager may exercise all the powers, authorities, and discretions hby vested in or assigned to the managers.

4. If the firm for the time being entled under Clause 1 hereof to be managers shall become disqualified, or shall decline to act as managers, the committee shall, until otherwise determined by the co in general meeting, be entled to exercise all the powers, authorities, and discretions, and shall perform all the duties hby vested in or assigned to the managers.

The above was used in the case of a ship company. The articles appointed a consultative committee with limited powers. The general powers both external and internal were vested in the managers.

The permanent directors or permanent director for the time being Form 271. may at any time, and from time to time, by instrumt in writing, appoint Power to any persons to be ordinary directors, and may remove any persons so appoint other appointed. Every such appointmt or removal shall be recorded in the directors. co's minute book.

The co, in general meeting, may at any time appoint a managing Form 271a. director to conduct the business of the co, and may make such appointmt Power for on such terms, and may from time to time vest in or assign to any meeting to managing director such powers, discretions, and duties, and may impose appoint