Form 299. It is convenient to state the proposed minute in the petition, especially where it is a long one. Counsel can thus, in indorsing his brief, refer to the minute in the petition instead of setting it out, or referring to a separate document. Your petr the co therefore humbly prays: (1.) That the sd special resolution passed and confirmed as afsd may be confirmed. (2.) That to this end all inquiries and directions necessary and proper may be made and given, and that a day may be fixed on and after which the co shall be at libty to discontinue the addition to its name of the words "and reduced." (3.) Or that such other order may be made in the premes as to the Ct shall seem meet. And your petr will ever pray, &c. NOTE. It is not intended to serve this peton upon any person. 8. By special resolution, &c., it was resolved: "That the capital of the co which now consists of 10,0007. divided into 1,000 shares of 107. each fully pd up be reduced to 5,0007. divided into 1,000 shares of 51. each, and that such reduction be effected by cancelling pd up capital [which has been lost or is unrepresented by available assets] to the extent of 51. per share." 9. Previously to the passing of such special resolution, pd up capital of the co to the extent of 5,000l. and upwards had been lost. 10. The reduction of capital afsd does not involve either the diminution of any liability in respect of unpaid capital or the paymt to any shareholder of any pd up capital. 11. The form of the minute proposed to be registered is as follows: [set it out]. Your petr the co therefore humbly prays : (1.) That the sd special resolution passed and confirmed as afsd may be confirmed by the Ct. (2.) That the addition of the words "and reduced" to the co's name may be dispensed with altogether. (3.) Or that [as in Form 299]. And your petrs will ever pray, &c. NOTE. [As in Form 299]. Reduction of Capital. Except so far as the capital may be reduced by forfeiture or surrender of shares (supra, pp. 121, 153), or by cancellation, under section 5 of the Act of 1877, of shares which "have not been taken or agreed to be taken," no reduction of capital can be legally effected without a special resolution, confirmed by the Court in accordance with the Acts of 1867 and 1877. There are five kinds of reduction, commonly carried out in this way: 1. Reducing the liabilities of shareholders, as in the resolution in Form 299. 2. Paying off capital not wanted, e. g., where the shares are 101. fully paid, reduce them to 51. and pay back 51. per share. See the Act of 1877. 3. Paying off capital upon the footing that it may be called up again. See Form 162, Act of 1877. 4. Cancelling shares unissued or surrendered. Shares which have not been taken or agreed to be taken, can be cancelled by special resolution under section 5 of the Act of 1877, but the sanction of the Court is requisite to the cancellation of surrendered shares. See Forms 166, 166a. 5. Cancelling capital which has been lost or is unrepresented by available assets. This is effected under the Act of 1877, and the object of such a reduction is to enable the company to pay dividends, for where capital has been lost, no dividend can be paid until the loss has been made good or cancelled. Supra, p. 170. For resolutions reducing capital see supra, p. 199 et seq. Sometimes a scheme of reduction involves several of the above operations. Where the articles of association of the company contain a power for the company to reduce its capital, the first step with a view to reduction is to pass a special resolution to reduce. But if the articles do not contain the necessary power, a special resolution must first be passed altering them, by introducing a clause that 66 the company may from time to time reduce its capital;" and subsequently a second special resolution will be passed to effect the reduction. See section 9 of the Act of 1867 and West India Co., 9 Ch. 11 n. The subsequent procedure differs according to the nature of the reduction: 1. S. 4 of the Act of 1877 provides "that where the reduction does not involve either the diminution of any liability in respect of unpaid capital or the payment to any shareholder of any paid up capital (e. g., where it merely provides for the cancellation of lost capital, or of surrendered shares), (i.) The creditors of the company shall not, unless the Court otherwise directs, be entitled to object, or required to consent to the reduction; and (ii.) It shall not be necessary before the presentation of the petition to add, and the Court may dispense altogether with the addition of the words and reduced,' as required by section 10 of the Act of 1877." 6 Accordingly, in such cases a petition should be prepared as in Form 300, supra, and immediately before or after presentation an application should be made by motion ex parte to the Judge to whom the petition is going to be or has been assigned, for an order dispensing with the words "and reduced " until the hearing of the petition. An order on such an application is generally obtained without difficulty, and the following are instances: In re Langdale Chemical Manure Co., 26 W. R. 434; Llynvi Co., 26 W. R. 55; In re New Civil Service Co-operation, Limited, Hall, V.-C., 5 Nov. 1879, B. 2222; In re Positive Government Security Life Assurance Co., Limited, Hall, V.-C., 23 July, 1880. See infra, Form 303. The petition should then be presented, and the secretary should be requested to have it answered for the next petition day. No difficulty is now made about so answering a petition, where it appears that the case falls within section 4 of the Act of 1877. In an early case under this section, the course adopted was first to present the petition, and then upon an ex parte motion an order was made dispensing with the words “and reduced,” and directing the petition to be on the paper without the chief clerk's certificate. But this is not the course now usually adopted. The petition then comes on for hearing without any notice or advertisement. Form 300. Form 300. The order is generally prefaced by a statement that "the Court not requiring any notice to creditors, or advertisement of any notice, that the petition was appointed to be heard this day;" and it usually dispenses with the use of the words "and reduced" altogether. Under section 4 of the Act of 1877, the Court may require the company to publish the reasons for reduction, but this power is not exercised, the company being merely required to give notice of the registration of the order in certain newspapers. (See Llynvi Co., 26 W. R. 55). As to advertising the order, see Form 304, infra. See Re Plaskynaston Tube Co., 23 C. D., where shares having been issued at a discount of eighty per cent., Chitty, J., required the consent of creditors, not being satisfied that a proposed cancellation of capital would not diminish the liabilities of members. Upon evidence that all the creditors had been paid off except one who consented, the order was made. 2. In all other cases, immediately after the passing of the special resolution, the words "and reduced" must be added to the company's name. See s. 10 of the Act of 1867. A petition should then be presented as in Form 299, and the subsequent procedure will be found set out in great detail in the Order of Court of 21 March, 1868, Buckley, 482. In these cases it generally takes from six months to a year to complete the reduction. When the order is made confirming the reduction, it generally provides that the company shall continue the words "and reduced " for a fortnight or a month. Every creditor must consent or be secured. In Re Credit Foncier, 11 Eq. 356, it was held that creditors who did not dissent must be deemed to assent; but in Re Patent Ventilating Co., 12 C. D. 254, Fry, J., declined to follow that case, and Kay, J., has repeatedly declined to follow it. Section 11 makes evidence of the consent, security, or discharge of every creditor a condition precedent. In either case the petition should be supported by an affidavit (usually made by the chairman of the directors), deposing to the facts stated. A copy of the memorandum and articles, and the minute book of the proceedings of general meetings, should be made exhibits. Under s. 15 of the Act of 1867, a minute has to be approved by the Court, and filed with the Registrar of Joint Stock Companies. The minute must show, with respect to the capital as altered, the amount, the number of shares, the amount of each share, and (under s. 4 of the Act of 1877) the amount per share deemed to be paid up. The following are examples of minutes which have been approved : "The capital of The Hydraulic Engineering Co., Limited, is 80,0001., divided into 20,000 shares of 41. each. At the time of the registration of this minute, 2,500 of the said shares are deemed fully paid up, and 9,493 of the said shares are deemed to have 31. per share paid up thereon, and the remaining 8,007 shares have never been issued. By order of M. R., 6 July, 1878, A. 1332." "The capital of the General Mining Association, Limited, is 219,7521., divided into 27,469 shares of 81. each, fully paid up. Malins, V.-C., 17 Jan. 1880.” "The capital of the company is 1,000,2001. sterling, in 50,000 A. or ordinary shares of 101. each, on which the sum of 101. per share has been, and is to be deemed to have been paid up, and 25,000 B. or preference shares of 201. each, on 22,864 of which the sum of 201. per share has been and is to be deemed to have been paid up, and on the remaining 2,136 (which have not yet been issued) no sum per share has been, or is to be deemed to have been paid up, and 200 shares of 11. each, on which the sum of 11. per share has been, and is to be deemed to have been paid up. Railway Share Trust Co., M. R., 4 Aug., 1879.” "The capital of the Higginshaw, &c., Co., Limited, is 90,000l., divided into 18,000 shares of 51. each. At the time of the registration of this minute 14,257 shares only have been issued and allotted, upon each of which the sum of 41. 10s. has been and is to be deemed to be paid up, but in respect of each of the said shares the company is empowered to pay off or return 20 per cent. of the amount so paid up, upon this footing, that the amount paid off or returned, or any part thereof, may be called up again.”—Lanc. Pal. Ct. Order, 6th Feb., Form 300. 1884. In all cases, the order having been obtained, an office copy should be filed with the Registrar of Joint Stock Companies, who will thereupon give his certificate in accordance with s. 15 of the Act of 1867. day of Upon the peton, &c. : Let the special resolution passed at an extra- Form 301. ordinary meeting of the sd co, held the -and confirmed Order to at an extraordinary meeting of the sd co, held the day of, and reduce capital. which resolution was in the words and figures following: "That, &c."be, and the same is hby confirmed: And let an office copy of this order be delivered to the Registrar of J. S. Cos, together with a minute in the words or to the effect set forth in the schedule hto: And notice of the registration of this order and of the sd minute be advertised as follows, that is to say, once in the Times newspaper, &c.: And let the sd co be at libty forthwith [or after the day of -] to discontinue the addition to its name of the words "and reduced." [Schedule containing minute.] Upon the peton of the Co, Limtd, on 20th July, 1880, preferred Form 302. unto this Ct, and upon hearing counsel for the petrs, and upon read- Order to ing the sd peton, an order dated the 19th July, 1880, on affidavit of B., reduce by cancelling lost filed 22nd July, 1880, and the exhibits A. and B. therein referred to capital. This Ct, not requiring any notice to creditors or advertisemt of any notice that the peton was appointed to be heard this day, doth order that the special resolution passed at the extraordinary general meeting of the co, held on the 12th June, 1880, and confirmed at an extraordinary general meeting of the co., held on the 5th July, 1880, which resolution was in the words and figures following, that is to say, "That the capital, &c." [see the resolution, supra, Form 163] be confirmed: And let this order be produced to the Registrar of J. S. Cos: And let an office copy of this order be delivered to him, together with a minute in the words or to the effect set forth in the schedule hto: And it is ordered that notice of the registration of the sd order and of the sd minute be published once in each of the following newspapers, that is to say, the Times, the Standard, the Daily Telegraph, and the Daily News: And let the addition of the words " and reduced" to the name of the co be dispensed with altogether. The Positive Government Security Life Assurance Co., Limited, Hall, V.-C., 23rd July, 1880, B. 1527. Re Portland Cement Co., Kay, J., 15th Dec., 1882. See further, supra, note to Form 300, and Seton, 1462. For order confirming reduction where the company's capital consisted in part of stock, see North British Australian Co., M. R., 8 May, 1879, B. 570. Upon motion this day made unto this Court by connsel for the above- Form 303. named co: Let the addition to the co's name, of the words "and re- Interim order duced," be dispensed with until the hearing of the peton for reducing dispensing capital on the 5th day of Nov., 1879, preferred by the said co. New Civil Service Co., Hall, V.-C., 5th Nov., 1879, B. 2222. with use of words" and reduced." In the matter of the Co, Limtd, [and Reduced], and in the Form 304. matter of the Companies Acts, 1867 and 1877. Notice is hby given Advertisement ing capital. Form 304. that the order of the High Ct of Justice (Chancery Division) dated, &c., of order reduc- confirming the reduction of the capital of the above-named co from -7. to 7., and the minute (approved by the Ct) showing with respect to the capital of the co as altered the several parlars required by the above statutes, were registered by the Registrar of Joint Stock Cos, on the And further take notice that the sd minute is in the words and figures following: "The capital, &c." Dated the day of day of of Form 305. Solors for the Co. Section 15 of the Act of 1867 provides for the registration of the order and minute with the Registrar of Joint Stock Companies, and requires notice of such registration to be published in such manner as the Court may direct. The Court cannot dispense with this publication: so held by Chitty, J., in Thames and Channel Steamship Co., 31 W. R. 781; W. N. 1883, 123. Transfer of Business of Life Assurance Co. The Life Assurance Companies Act, 1870, 33 & 34 Vict. c. 61, provides that no company [i. e., life assurance company], shall amalgamate with another, or transfer its business to another, unless such amalgamation or transfer is confirmed by the Court as therein mentioned. In the first edition of this work a copy was given [p. 566] of the petition used upon a transfer which was carried out under the Act; but proceedings under the Act are so rare, that it does not seem worth while to repeat the form in this edition. However, an outline of the form referred to is subjoined : The petition was intituled, In the matter of the Act of 1862 [the company being in liquidation], and of the Act of 1870, and of the company, and was presented by the directors and liquidators of the company. It stated : 1. Formation of co, registered office, objects. 2. Capital. 3. Change of name. 4. As to the policies and annuities issued or granted. 5. Net liability on 31st January, 1874. 6. Certain further policies issued. 7 and 8. Formation of the purchasing association under Friendly Societies Acts, rules, objects, &c. 9 and 10. Trustees of association. 11. Actuarial investigation of affairs of co had been made which showed that some arrangemt was necessary. 12. Condititional agreemt for transfer of liabilities of co to association set out in full. 13. Resolution of co passed approving of the agreemt and for voluntary winding up. 14. Supervision order made. 15. Approval of the agreemt by the association in general meeting. 16. Statemts showing that the statutory requisitions have been complied with. See s. 14 of the Act of 1870. 17. Position of association. 18. Statemt that the arrangemt was equitable and would be beneficial, &c. Prayer: That the conditional agreemt and the arrangemt intended to be effected thereby might be sanctioned and confirmed by the Ct, and carried into effect. Respondents: The association and its trustees. There have been very few proceedings for amalgamation or transfer since the Act of 1870. The writer only knows of the following:-Citizen Assurance to Provident Clubs, 1874; London and Southwark to London and Lancashire |