poration by royal charter; and many undertakings of the utmost benefit to the country have been carried out in this manner. If, again, as was often the case in later times, the projected schemes required to possess special and aggressive powers in addition to the privileges of incorporation, they were formed under a special Act of Parliament.

But the great expense and ruinous delay which attended the obtaining of royal charter or special Act came to be severely felt, as the advancing prosperity of the country multiplied the number of undertakings requiring their aid, and led to the abandonment of many that would have been highly beneficial to the public and their projectors. These considerations, and the undeniable benefits which the joint-stock principle, cramped and fettered as it was by the existing state of the law, had conferred on the country, seem gradually to have liberated the Legislature from the ancient prejudices against its free operation, even though they still lingered in the tribunals.

Acts.

This change of sentiment was evinced by certain enactments Letters Patent known as the 'Letters Patent Acts,' which may be characterized as a compromise between the old notions and the new, seeking to derive as much benefit as possible from the joint-stock principle, at the least possible concession of the privileges peculiar to corporations.

The first of these enactments, 6 Geo. IV. c. 91, which virtually 6 Geo. Iv. c. 91. repealed the Bubble Act, empowered the Crown, when it should see fit, to incorporate companies by charter, without at the same time conferring on them the privilege of limited liability.

As was foreseen by all practical men, this enactment failed to meet the exigencies of the case. The difficulty and expense of obtaining charters of incorporation placed them beyond the reach of ordinary companies; and as to such larger associations as could afford to surmount these obstacles, the privilege of limited liability was precisely that of which they were most desirous, and without which mere incorporation was of little importance.

C. 94.

In 1834, the evils of the existing system again forced themselves 4 & 5 Will. iv. on the attention of the Legislature, and the Act of 4 and 5 Will. IV. c. 94 was passed. This enactment rendered it competent for the Crown to confer on any joint-stock company, by letters patent, any privilege or privileges which, according to the rules of the common law, it would be competent to his Majesty to grant to such

1837, 1 Vict. c. 73.

company by charter of incorporation.' The chief of these privileges was declared to be that of suing and being sued in the names of officials; but from sec. 3, it would appear that limited liability was not among their number. The Act contained special provisions for making it applicable to Scotland, where, from the absence of the English technical difficulties as to suing and being sued, the privileges it offered were of little moment. It may be noticed, that in its fourth section we find the first traces of that system of registration which has since been so successfully elaborated.

This Act, like its predecessor, entirely, failed to mitigate the evils complained of; and these still continuing to make themselves felt with increasing force, the Legislature once more attempted to find a remedy, and passed in 1837 the 1 Vict. c. 73, which repealed the former Acts, on the significant recital, that they had not been found effectual for the purposes for which they were intended.'

This, commonly known as the Letters Patent Act, extends over the United Kingdom, and is still in force. It purports to confer powers and privileges almost equal to those since made available under the Registration Acts, and for the first time contains a provision for limiting the liability of shareholders. The machinery by which its provisions are to be worked out is very similar to that of the Registration Acts, though, of course, in a cruder and less perfect form.

Notwithstanding the expectations formed of this Act, and the much more liberal spirit displayed in its provisions, it, like all its predecessors, proved a failure. The main reason of this was, that limited liability, in the proper sense of the word, could not be attained under its provisions. The shareholders still continued ultimately liable; and the only advantage secured was, that they were liable only subsidiarie after manifest failure of the company. The Act was accordingly little used in England, and has remained a dead letter in Scotland (a).

At length the old prejudices against free combination of capital gave way, and the advantages and safety of according limited liability forced themselves on the attention of the Legislature, not Bank to take advantage of the Act. It proved abortive.

(a) The only example appears to have been an attempt of the Western

only by the beneficial working of the foreign sociétés en commandite, but also by the example of such associations in Great Britain as had attained limited liability by the expensive avenues of royal charter or special Act.

c. 133.

These more enlarged views found expression in the statute of 18 18 & 19 Viet. and 19 Vict. c. 133, well known as the first Limited Liability Act. By this Act, companies were enabled to obtain all the benefits of incorporation, and (if desired) of limited liability in the full and proper sense of the phrase. It was intended, however, more as a trial than a permanent enactment, and its provisions were declared not to extend to Scotland.

This Act was no sooner in operation, than it gave great and general satisfaction, and the prognostications made by the opponents of limited liability were found to have been purely imaginary. This was so much the case, that in the following year 'The Jointstock Companies Act, 1856' (19 and 20 Vict. c. 47), was passed, 19 & 20 Vict. which, repealing many former Acts, and amongst others that of the previous year, re-enacted its provisions in a more perfect and consolidated form; and while rendering the benefits of incorporation and limited liability still more easily available, extended them over the whole United Kingdom.

c. 47.

c. 14.

In the following year, on the preamble 'that it is expedient that 20 & 21 Vict. further provision be made for the incorporation and registration of joint-stock companies,' the Act 20 and 21 Vict. c. 14 was passed, by which the principles of the Act 1856 were more fully carried out; and in 1858 they were still further extended by the 21 and 22 Vict. c. 60, and by the 21 and 22 Vict. c. 91, which last enactment 21 & 22 Vict. enabled banking companies which had hitherto been excluded from the operation of the Registration Acts, to receive the benefits of limited liability.

At length, in the year 1862, the Act 25 and 26 Vict. c. 89 was passed, known as 'The Companies Act, 1862. By this important statute most of the previous statutes relative to joint-stock companies are repealed, and their scattered provisions are consolidated into a uniform code. The advantages of registration are brought within the reach of associations whose membership amounts only to seven persons; and numerous improvements are introduced which the experience of the working of the former Acts had suggested in

21 & 22 Vict. c. 60.

c. 91.

25 & 26 Vict.

c. 89.

the provisions applicable to the formation, management, and winding up of companies.

7 & 8 Viet. c. 111.

11 & 12 Vict. c. 45.

12 & 13 Vict. c. 108.

20 & 21 Vict. c. 78.

25 & 26 Vict. c. 89.

WINDING-UP ACTS.

As early as the year 1844, the attention of the Legislature appears to have been called to the importance of affording greater facilities for winding up the estates of insolvent companies, and distributing their assets among their creditors, than could be obtained either by suit in Chancery or an action of count and reckoning. This led to the Act 7 and 8 Vict. c. 111.

At a subsequent period, the Winding-up Acts of 11 and 12 Vict. c. 45, and 12 and 13 Vict. c. 108, were passed, with the view of affording still further facilities for winding up insolvent companies. But experience showed that these enactments failed to produce the beneficial effects expected from their operation.

After the lapse of many years, they were amended to a certain extent by the Act 20 and 21 Vict. c. 78.

The whole of the Winding-up Acts, with the exception of the Railway Abandonment Act,' 13 and 14 Vict. c. 83, were, however, practically repealed by the present Companies Act of 1862, which in this as in other respects has introduced many simplifications and improvements that the experience of the working of the former Acts had suggested.

CONSOLIDATION ACTS.

Consolidation

Acts.

When, for the purpose of carrying out great public undertakings, such as water-works, canals, or railways, aggressive or compulsatory powers have been required, application is in use to be made to the Legislature to incorporate the proposed company, with the necessary privileges and powers, as in this way only can they, at least in modern times, be acquired.

These applications became ultimately so numerous, that it was found desirable to pass certain general statutes which should contain all the provisions usually required by associations seeking special powers, and which, unless it were otherwise provided, should be held as forming part of the company's special Act, thus both secur

ing greater uniformity, and obviating the necessity of continual repetition in any particular case. These statutes, known as the Consolidation Acts, were passed in the year 1845. They are in duplicate-one set applying to England, and the other to Scotland. Though differing slightly in phraseology and in practical machinery, they are identical in principle and in substance.

They consist of the following Acts :

1. 'The Companies Clauses Consolidation Act' (8 and 9 Vict. c. 16), applicable to England; and The Companies Clauses Consolidation (Scotland) Act' (8 and 9 Vict. c. 17), applicable to Scotland. 2. The Lands Clauses Consolidation Act' (8 and 9 Vict. c. 18), applicable to England; and 'The Lands Clauses Consolidation (Scotland) Act' (8 and 9 Vict. c. 19), applicable to Scotland. 3. The Railway Clauses Consolidation Act' (8 and 9 Vict. c. 20), applicable to England; and 'The Railway Clauses Consolidation (Scotland) Act' (8 and 9 Vict. c. 33), applicable to Scotland.

8&9 Vict. c.

16, 17, 18, 19,

20, and 33.

of companies.

From the sketch which has been given of the history of General view the law of partnership and joint-stock companies, it will be seen that as the law now stands in Scotland, such associations extend from the simple partnership or private firm up to the joint-stock company fully incorporated and invested with aggressive powers.

First, there is the mere private firm, consisting of a few members, and realizing the idea of the Roman Societas. Next above this appears the joint-stock company unincorporated. This is still essentially an ordinary partnership; for it differs from the private firm in so far only as its more numerous membership requires some modification or adaptation of the common rules. Next in the scale appear companies formed under the Letters Patent Act, companies whose special Act does not invest them with the full privileges of corporations, and companies formed under the Registration Acts, but without attaining limited liability. Such associations may said to stand intermediate between the unincorporated company and the proper corporation, and to approach the one or the other extreme as they possess less or more of the privileges which distinguish corporations. We then come to proper corporate bodies, including all such companies as have taken the full benefit of the Registration.

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