Bye-laws.

Common seal transfers.

Patent Act does not in the least degree interfere with the internal arrangements of the company. These are left entirely to the provisions of the deed of copartnery, or to that in conjunction with the letters patent conferring the desired privileges. It would rather seem, however, though that is not expressly stated, that after obtaining the letters patent no alterations of importance can be made on the provisions of the original deed of association, since these must be taken as forming the conditions in respect of which the letters patent were conferred. It is remarkable that the Act contains no provisions for keeping of books by the company, nor for any system of internal registration. The system adopted is that of external registration, by means of returns made to and registered by Government officials.

The Act contains no provisions as to the making of bye-laws. But the company would seem to have the power of making these as required from time to time, provided they do not interfere with the provisions of its deed of association or letters patent, and provided they do not contravene the regulations of the Act. Without this power, the internal management of the association would often be greatly impeded.

Yet

The possession of a common seal is apparently taken for granted in the Act (sec. 27). contracts to bind the company are not required to be under seal. There is no form specified for transfers

of shares; transfer by deed or in writing is mentioned, but other inodes are nowhere excluded (secs. 8 and 9).

CHAPTER IV.

CONSTITUTION AND MANAGEMENT OF COMPANIES FORMED
UNDER THE COMPANY CLAUSES ACT, 1845.

ALL companies formed under the provisions of this Act are proper corporations in the fullest sense of the term. In other respects their constitutions are to be found in the provisions of the Act itself, except in so far as these may be varied or excepted by their special acts of incorporation, or may be amplified by the 'Lands Clauses Act,' or by the 'Railway Clauses Act,' as the case may be. We shall afterwards have occasion to advert to the provisions of these last two consolidation Acts; but will in this place proceed to examine the provisions of the Company Clauses Act, in so far as they relate to management.

The first general meeting of shareholders must be held at the Ordinary meetings. time appointed in the special act, and in the absence of such appointment, within one month after the passing of the Act. If no time is prescribed for future general meetings, they must be held in February and August half-yearly, or at such other times as a general meeting may appoint. These general meetings are the ordinary meetings of the company. Both they and the extraordinary meetings must be held in the prescribed place; and if none is prescribed, then in such place as may be appointed by the directors (sec. 69).

No business other than that appointed by the general or special acts can be transacted at ordinary meetings, unless special notice have been given by advertisement (sec. 70).

meetings.

Every general meeting other than the ordinary half-yearly Extraordinary meetings is extraordinary, and it lies with the directors to call extraordinary meetings. Nothing can be done at these meetings

Notice.

Quorum.

Chairman.

Business.

beyond what is set forth in the notice convening them (secs. 71 and 72).

The directors may be required to call extraordinary meetings by a certain number of shareholders possessing a certain aggregate number of shares, as provided by the special act; and in the absence of such provision, by twenty or more shareholders holding in the aggregate not less than one-tenth of the company capital. The requisition must be in writing under their hands, and must fully express the object of the meeting; it may be left at the company office, or given to three directors, or left at their residences. If the directors fail for twenty-one days to call the meeting, the prescribed number of shareholders may call it themselves on fourteen days' notice (sec. 73).

Ten days' notice at least of every meeting must be given by advertisement, specifying the place, day, and hour of meeting; and every notice of an extraordinary meeting, or of an ordinary one, at which unusual business is to be done, must specify the business (a) (sec. 74).

At any meeting, whether ordinary or extraordinary, the prescribed quorum must be present either personally or by proxy. And if no quorum be prescribed, then the quorum will be by shareholders holding in the aggregate not less than one-twentieth of the capital, and being in number at least one for every £500 of such proportion, unless this would give a greater number than twenty, in which case twenty shareholders holding one-twentieth of the capital will be sufficient. If no quorum be present for half an hour after the time of meeting, nothing can be done beyond declaring a dividend, if that be one of the purposes of the meeting; and the meeting is held adjourned sine die, unless it has been called for election of directors (sec. 75).

The following persons preside as chairman, one in default of the others respectively: 1. The chairman of the directors; 2. Their deputy-chairman; 3. One of the directors chosen by the meeting; 4. Any shareholder so chosen (sec. 76).

Nothing can be done at the meeting except the business for which it was convened. It may be adjourned from time to time, and from place to place; but nothing can be done at an adjourned (a) See Swansea Dock Co. v. Levien, 20 L. J. Ex. 447.

meeting but what was left unfinished at the original meeting (sec. 77).

Mode of

voting.

Shareholders vote according to the scale prescribed in the special act; and in the absence of such a provision, each shareholder has a vote for every share he holds up to ten, and an additional vote for every five shares beyond this up to one hundred, and another vote for every ten shares above one hundred. No shareholder can vote unless all his calls have been paid (sec. 78). Votes by proxy are competent. The proxy must be in writing, in Proxy. the same or similar terms with those given in Schedule F, signed by the shareholder if an individual, and under the common seal if a corporation. The voting is by majorities, the chairman having a casting vote (sec. 79). The instrument appointing a proxy must be transmitted to the secretary within the prescribed period; or if no time prescribed, not less than forty-eight hours before the hour of meeting (sec. 80). When several persons are joint holders of Guardians. shares, he whose name stands first on the register is deemed sole proprietor for purposes of voting (sec. 81). Shareholders incapacitated by lunacy or minority vote by their legal guardians, either

in person or by proxy (sec. 82). Unless a poll be demanded, a Poll. declaration by the chairman that the resolution has been carried, is, when entered on the company books, sufficient evidence of the fact (sec. 83).

APPOINTMENT OF DIRECTORS.

The number of directors must be that prescribed in the special Number. act (sec. 84); but when power is given to increase or reduce the number prescribed, this power can only be exercised in general meeting after due notice. The order of rotation in which such increased or reduced number go out of office, and what shall form a quorum, may also be fixed in this manner (sec. 85).

The directors appointed by the special act continue in office, Election. unless it is otherwise provided, until the first ordinary meeting held in the following year. The shareholders may then elect a new body of directors, or may continue all or some of the original directors in office, supplying the places of those not re-elected by the election of others (sec. 86). If, at a meeting for the election

Qualification.

Order of retiring.

of directors, no election takes place by reason of no quorum being present within one hour of the appointed time of meeting, the meeting stands adjourned till the following day at the same time and place; and if then, for the same reason, no election can be made, the existing directors continue in office until new directors are appointed at the first ordinary meeting in the following year (sec. 87).

No one can be a director who is not a shareholder possessed of the prescribed number of shares (a), or who holds an office or place of trust under the company, or is interested in any contract with the company (b); and no director can, during the term of his office, accept any other office or place of trust or profit under the company, or become interested in any contract with the company (sec. 88). If any such disqualification supervene after election of a director, his office as director becomes vacant ipso facto (sec. 89) (c). A shareholder is not, however, disqualified from being a director of the company because he happens to be a member of another incorporated joint-stock company, between which and the company of which he is or is sought to be made director, a contract exists (sec. 90).

The directors retire from office at the time and in the proportions following the individuals to retire being determined by ballot among their fellows, unless they agree otherwise. At the end of the first year after the first election, and at the end of the second and third following years, the number prescribed by the special act go out of office; but if the special act is silent on this matter, one-third of those in office after the first election go out the first year, one-half of the remaining number the second year, and the remainder the third year. At the first ordinary meeting in any subsequent year, the prescribed number, if any, and otherwise onethird of the directors, being those longest in office, retire. If, how

(a) See Hill v. Edin. and Glasgow Rail. Co., 1849, 21 Jur. 455. This requirement cannot be satisfied by nominally paid up shares. Llanharry Hæmatite Co., 1864, 10 E. Jur. N. S. 812.

(b) Such contracts, to amount to a disqualification, must be made with

the company in the prosecution of its undertaking. A company's banker may be one of its directors. See Sheffield and Man. Ra. Co. v. Woodcock, 7 M. and W. 574.

(c) Blaikies v. Aberdeen Ra. Co., 1851, 14 D. 66, House of Lords, June 1852.