managing director. Form 271a. on him such regulations as may seem expedient, and may remove any managing director so appointed, and may fill up any vacancy in the office of managing director, and, for the ppose of exercising any of the powers conferred by this clause, any managing director, and any member or members holding not less than shares, may convene a meeting. Form 272. Remuneration of directors. Form 273. Sometimes no directors are appointed by the articles, but a clause as above is inserted. In such case the clause as to directors will be conditionally shortened, and the word "manager" will be substituted throughout for directors." The directors shall be pd for their services out of the funds of the co the remuneration following, that is to say, the sd A. and B. each 5007. p. a., and the sd C. 300l. p. a., and each of the other directors such sum as the co in general meeting [or the permanent director] shall from time to time determine. The provisions as to remuneration of directors vary considerably. In some cases the principal directors take no remuneration but have power to remunerate the ordinary directors. In others they take a fixed salary as above. Sometimes it is desired to provide, as in an ordinary partnership, that a member shall be at liberty to draw out a fixed allowance with the obligation to recoup if at the end of the year it appears that his share of profits do not amount to what he has drawn, but in a company there is grave difficulty in making any such provision inasmuch as dividends can only be paid out of profits. However, the difficulty is sometimes met, where the member is a director, by giving him the fixed allowance as remuneration for his services as director with liability to recoup as aforesaid. Each of them, the sd A. B. and C., whilst he remains a permanent Instruction of director, shall be entled, without charge, to have his son, or any one of his sons, instructed at the co's works in the business or businesses for the time being carried on by the co. son. Form 274. What time directors to give. This clause varies a good deal in form. Sometimes power is given to nominate by will a son for instruction. Sometimes any holder of a specified number of the shares is given the power. ATTENTION. Each of the ordinary directors shall devote the whole of his time and attention to the business of the co, but the sd A. and B. shall not be bound to devote more time and attention to the co than they respively may think fit. Some such provision as above is not uncommon. ROTATION. Form 275. Continuance of directors in office. Until otherwise determined by extraordinary resolution, the directors for the time being shall continue to hold office, subject only to Clauses [as to disqualification and power to remove] hereof. In a private company a clause as above is very common, the intention being that the directors shall not retire by rotation but shall remain in office until When such a Form 275. When rotation they become disqualified by bankruptcy, &c., or are removed. PROCEEDINGS OF DIRECTORS. It is sometimes provided that (as in an ordinary partnership) each director may do various things without a board meeting, and not uncommonly it is provided as follows: At any meeting of the directors a director shall have one vote for Form 276. every share held by him, and votes may be given either personally or by Voting at proxy, but a proxy must be one of the directors, and must be appointed directors' in writing under the hand of the appointor. Sometimes it is provided that no resolution shall be valid if a particular director dissents, or that certain business shall only be transacted with the concurrence of a particular director. meetings. POWER OF DIRECTORS. Sometimes the powers of directors are limited as regards certain things, e.g., borrowing money, entering into contracts beyond a certain value, increasing capital, &c. See Form 117. DIVIDENDS. Occasionally it is provided that dividends shall be applied as in Form 277. Where there are preference shares provision will be made accordingly. See Form 126. So long as any [C] share is not fully pd up, the holder shall only be Form 277. pd out of the dividends from time to time declared thereon such a sum Interest on as with the amount (if anything) previously pd to the holder of such unpaid shares. share pursuant to this clause shall be equal to interest at the rate of 5 p. c. p. a. on the capital pd up thereon computed from the time when such capital was pd up, and the excess shall be retained by the directors and applied in paying up such share. Not uncommonly it is confined to shares issued to employés. Sometimes the retention is only to operate until the share is paid up to the extent of 80 per cent. ACCOUNTS. These are generally in common form. See Form 117. But sometimes a clause as follows is inserted : Balance sheet. A copy of such balance-sheet and report shall, for seven days pre- Form 278. viously to the meeting, be kept at the office open for the inspection of members, but the same shall not be circulated, and no copy of, or extract from, the same shall be taken or made. The object in some cases is to avoid the expense, and in others to avoid disclosure of facts which might lead to the establishment of rival undertakings. Form 279. Audit. The accounts relating to the co's affairs shall be audited in such manner as the co in general meeting shall from time to time determine. The above is sometimes inserted instead of the usual provision. Form 280. ment. DEEDS OF SETTLEMENT. Where a conversion is to be effected in accordance with the new plan (supra, p. 335), the unincorporated company is usually constituted by deed. Sometimes the deed commences " This indenture made, &c.," and is called the deed of settlement; and sometimes it commences" Articles of Association made, &c." The object of framing it in the manner last mentioned is to enable the parties to describe the regulations after incorporation as the Articles of Association, since that term is more familiar than deed of settlement. ARTICLES OF ASSOCIATION [or, THIS INDRE] made the Deed of settle- day of -, between A. B. and C., of of the first pt, D., of of the second pt, and THE SEVERAL OTHER PERSONS who [have signed their names and affixed their seals, and] shall [hereafter] sign their names and affix their seals to these presents, of the third pt: WITNESSETH that each of the several persons pties hto of the first and third pts respively, so far as relates to the acts and deeds of himself and herself respively, and his and her respive heirs, exs, and ads doth hby covenant with the sd D. (as trustee for or on behalf of the others of them), and also as a separate covenant with each of the others of them, that the several persons pties hto of the first and third pts respively, and the several other persons who shall become members of the co in manner hereinafter mentd, shall, whilst holding shares in the capital of the co, be and continue (until dissolved under the provisions in that behalf hereinafter contd) a joint-stock co under the name hereinafter specified, and that such co and the members thereof shall be subject to the regulations following (that is to say) :— Interpretation. 1. In these presents, unless there be something in the subject or context inconsistent therewith "The co" means the co hby constituted. "The members " means the holders for the time being of shares in the capital of the co. "The registration of the co" means the registration of the co pursuant to Pt. VII. of the Companies Act, 1862. "The office" means, prior to the registration of the co, the principal place of business of the co, and, after the registration of the co, means the registered office for the time being of the co. "The register" means the register of members to be kept as hereinafter provided. 66 Month means calendar month. "Special resolution" and "extraordinary resolution" respively have the meanings assigned thereto by the Companies Act, 1862. "The directors means the directors for the time being. "In writing" means written or printed, or partly written or partly Form 280. printed. Words importing the singular shall include the plural number, and vice versa. Words importing the masculine shall include the feminine gender. Words importing persons shall include corporations, mutatis mutandis. 2. The name of the co shall be A. B. and Co. The name may at any Name. time before the registration of the co be changed or modified by a general meeting. 3. Until after the registration of the co there shall not at any time be Number of more than twenty members, supra, p. 91. 4. The office shall be situate in England. 5. The objects for which the co is established are : (a.) To acquire the goodwill of the business of a, now carried on by the sd A., B., and C. in partnership together, under the firm or style of A. B. & Co., at and elsewhere, and to acquire and undertake the whole or any pt of the assets and liabilities of the sd A., B., and C., in connection with such business. [Here will follow the further objects, see supra, Form 69, et seq.] members limited. Office. Objects. 6. The capital of the co shall be 100,000l., divided into 10,000 shares Capital. of 107. each. to 7. Of the sd 10,000 shares the sd A. shall be entled to 5,000, Specific appropriation numbered to inclusive, the sd B. shall be entled to 4,000, of shares. numbered -, inclusive, the sd C. shall be entled to 750, numbered to, inclusive, and each of the several other persons parties hto of the third pt shall be entled to the number of shares in the capital of the co set opposite his signature hto. 8. The assets specified in the schedule hto shall be brought into the Assets to be brought in. joint stock by the sd A., B., and C., and, having regard to the obligations imposed on the co by Clause 10 hereof, shall be taken to be of the value of 97,5007., and the shares to which the sd A., B., and C. are to be entled as afsd shall be deemed to be fully pd up by means of the assets so brought in. If desired insert after the word 'afsd' the words " and also the [4] shares to which E., F., G., and H. are to be entitled." In such case A., B., and C. will take [4] shares less. Sometimes the founders desire to take part of the value of their interest in the concern in debentures or debenture stock [supra, pp. 273, 279]. In such case this clause will declare that the assets are brought in subject to a lien in favour of the founders for the sum specified, and clause 10 will provide that the company shall satisfy such lien. After registration the lien can be satisfied by the issue of debentures or otherwise. 9. The sd A., B., and C. shall convey to the co the assets mentd in Conveyance. the sd schedule hto, subject to the liabilities affecting the same respively, but free from all claims by him, and in the meantime shall hold the same assets in trust for the co. 10. The co shall undertake, pay, observe, satisfy, perform, and fulfil Obligations А А Form 280. all the liabilities of the sd A., B., and C. in relation to the sd business, and shall indemnify the sd A., B., and C. and their respive heirs, exs, ads, estates, and effects from and against all actions, proceedings, damages, claims, and demands in respect thereof. imposed on company. From what to have effect. Sometimes this clause is less general, e.g., "all such of the liabilities of the said A., B., and C., in relation to the said business as are specified in the book marked A referred to in the schedule hereto and shall, &c." 11. The sd business shall be deemed to have been carried on as from time agreement the 31st day of December, 1883, on the co's behalf, and accordingly the sd A., B., and C. shall be allowed all paymts made and expenses incurred, and shall account for all moneys and other benefits received by them respively in relation to such business as from that day. Numbering shares and register. Limitation of liability. Shareholders, no power to act. This, of course, is a matter of arrangement. 12. Each share in the capital shall be distinguished by its appropriate number, and the co shall cause to be kept in one or more books a register of its members, and there shall be entered therein the parlars mentioned in section 25 of the Companies Act, 1862. 13 & 14. [See Clauses 8 and 10 of Form 117.] 15. As between the members for the time being of the co, no member shall be liable to pay calls or to contribute to an extent exceeding the amount for the time being unpaid, or not credited as pd up on the shares held by him. This limit of liability is, of course, valid as between the members, but until the company registers as a limited company it remains inoperative as against outsiders. Greenwood's case, 3 D. G. M. & G. 459. 16. The conduct of the co's business is to be exclusively vested in the directors, as hereinafter provided, and accordingly no member of the co as such shall have any power to use the name of the co, or make any contract, or otherwise act on the co's behalf. It is not uncommon to insert a clause as above. And although in the case of an ordinary partnership such a stipulation is inoperative as regards outsiders, without notice a different rule prevails in the case of a joint stock company. Thus in Burnes v. Pennell, 2 H. L. Cas. 497, Lord Campbell, L. C., said that "No one will contend that a joint stock company would be liable on a bill of exchange drawn, accepted, or indorsed by any one shareholder. Why? Because it is known that the power of carrying on the business of the company and of drawing, accepting, and indorsing bills of exchange is vested exclusively in the directors. This shows that, although a joint stock company is a partnership, it is a partnership of a different description, and attended with different incidents and liabilities from a partnership constituted between a few individuals who carry on business jointly with equal powers and without transferable shares. All who have dealings with a joint stock company know that the authority to manage the business is conferred upon the directors, and that a shareholder as such has no power to contract for the company. For this purpose it is wholly immaterial whether the company is incorporated or unincorporated." And in Hallett v. Dowdall, 21 L. J. N. S. Q. B. and 18 Q. B. 2, Platt, B., said, "There is every difference between a joint stock company and an ordi |