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Mode of forming unlimited companies.
the reasons for adopting that form of company have been stated above, and the remarks on the articles of association will apply as well to a joint stock company limited by guarantee, as to one limited by shares.
The above observations with respect to the amount of guarantee do not apply to mutual insurance companies, mutual land companies, and other mutual companies that possess no capital, and deal only with their members. In such associations the members practically are the sole creditors, and any amount of guarantee that is not illusory, and would probably suffice for the expense of winding up the company, for example, a guarantee of from 58. to 17., would seem to be sufficient.
Articles of association must be filed in the case of a company limited by guarantee, and formed on the mutual principle. Instead of the amount of capital, the articles must state the number of members with which the company proposes to be registered.
Unlimited companies may readily be formed by attention to section 10 of the Act, and to form D in schedule 2.
No special directions are required with respect to the articles of association of companies limited by guarantee and unlimited companies, as the observations made above apply to the articles of such companies, no less than to the articles of companies limited by shares.
The next step, after completing the memorandum
and articles of association, is to register the company. To this end the memorandum of association, and articles of association, if any, must be stamped with the same stamp as if they were deeds, and be presented to the registrar of joint stock companies, who will retain the originals, and grant a certificate of incorporation, which is the regular evidence of the company having attained a corporate existence.
Two sections in part I. of the Act remain to be noticed.
of identity of
Section 20 enacts that no company shall be regis- Prohibition tered under a name identical with that by which a name. subsisting company is already registered, or so nearly resembling the same as to be calculated to deceive, except in a case where such subsisting company is in the course of being dissolved, and testifies its consent in such manner as the registrar requires.
The appropriation of the name of another company is an offence of the same character as piracy of a trade-mark, and is justly prohibited.
The exception is useful in the not unfrequent case of two or more companies amalgamating. The process consists in a new company registering itself for the purpose of absorbing the old companies, which wind up voluntarily. The new company usually assumes a name made up of the names of the companies to be absorbed, or otherwise resembling them, in a greater or less degree. This assumption of name is not illegal, if the dissolving companies testify their assent to such a use of their names.
of the hold
by religious and charitable socie
ties. S. 21.
It will be recollected, that the Act enables coming of land panies formed for purposes of charity, or any lawful purpose whatever, though gain be not the object, to incorporate themselves under the Act, and to hold land it was feared that this power of holding land might be abused in the case of religious societies; section 21 therefore enacts, that no company formed for the purpose of promoting art, science, religion, charity, or any other like object, shall be entitled, without the license of the Board of Trade, to hold more than two acres of land (a).
(a) For form of license see Form F in Schedule II.
DISTRIBUTION OF CAPITAL AND LIABILITY OF MEMBERS
in a com
A MEMBER of a company is virtually a person who Membership has agreed to become a member; for although his pany. legal title is not complete until he is registered, ample powers are given by the Act to place his name on the register, whether he is willing or not to adhere to his engagement.
No question can arise as to the nature of the in- S. 22. terest of a member, as the 22nd section declares that such interest shall be personal estate, capable of being transferred in manner provided by the regulations of the company, and shall not be of the nature of real
of register of
The register of members has a twofold importance: Importance first, it ascertains the rights and liabilities between the members. themselves, of the persons claiming interest in the company; secondly, it provides the creditor with the best data he can obtain of the solvency or insolvency of the body with which he proposes to deal.
Both these objects have been kept in view by the Act.
The 25th section provides that every company shall S. 25.
keep in one or more books a register of its members, and there shall be entered therein the following particulars :
1. The names and addresses, and the occupations, if any, of the members of the company, with the addition, in the case of a company having a capital divided into shares, of a statement of the shares held by each member, distinguishing each share by its number; and of the amount paid or agreed to be considered as paid on the shares of each member.
2. The date at which the name of any person was entered in the register as a member.
3. The date at which any person ceased to be a
In a large company the above list would extend over many books, and from its very size would tend to confuse rather than afford useful information to an inexperienced person. The next section therefore requires that in the case of a company having a capital divided into shares, an annual list shall be made of all persons holding shares in the company on the 14th day succeeding the day on which the ordinary general meeting of the company, or if there be more than one ordinary general meeting, the first of such meetings is held and that such list shall contain a summary specifying the following particulars :
1. The amount of the capital of the company, and the number of shares into which it is divided.
2. The number of shares taken from the com