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panies, but in the same year a special Act was passed the regulation of banking companies in England (7 & 8 Vict. c. 113), which in 1846 was extended Scotland and Ireland by the Act 9 & 10 Vict.

c. 75.

The above Acts dealt only with a portion of the existing evils. They enabled companies to compel yment of calls by their shareholders and payment f debts by their debtors, but they retained the partDership relation between the shareholders, and proided no means for the dissolution of a company or for the satisfactory adjustment of disputes between the shareholders.

Acts of

A further step was gained in the years 1848-49, by Winding-up he passing of the Winding-up Acts. Still, the old 1848-49. lacy of the partnership liability towards third parties was left untouched, and a winding-up under the Acts f 1848-49 amounted merely to a proceeding on behalf of shareholders to equalise their contributions for payment of debts, and not to a suit on behalf of erlitors for compelling payment of their debts from an insolvent company.

It is true that this defect was to some extent re

Hed by the Act of 20 & 21 Vict. c. 78. Still, a winding-up under the Acts of 1848 and 1849 could not be instituted by a creditor, and wore the aspect of a proceeding on behalf of the shareholders, rather than that of a distribution, on behalf of creditors, of the assets of an insolvent company (a).

(a) In addition to the above Acts, it may be well to mention


Joint Stock
Act 1856.

The above-mentioned Acts made no provisions authorising companies to acquire limited liability, and shareholders still remained liable to the full extent of their means for the debts of the company.

At length, limited liability was made attainable by joint stock companies by the passing of the Limited Liability Act of 1855.

That Act was brought forward late in the session, not as an independent measure, but as a graft on the Joint Stock Companies Act 1844.

Every company desirous of obtaining limited liability was compelled to comply, not only with the provisions of the Act of 1855, but also with those of the Joint Stock Companies Act of 1844, so that limited liability, though certainly made attainable, was attainable only at great expense, and subject to great technical difficulties.

This brings down the history to 1856, in which year Mr. Lowe, as Vice-President of the Board of Trade, brought into the House of Commons the Joint Stock Companies Act 1856, for the purpose of reducing into a practical system the disjointed provisions of the preceding Acts, and of giving due prominence to the indications afforded by the legislature of an inclination to free companies from the impediments

the Act of 7 & 8 Vict. c. 111, a scheme for creating and dealing with corporate bankruptcy, but which failed from a want of provisions for apportioning contributions among the co-partners and was supplanted by the Winding-up Acts of 1848 and 1849; also 9 & 10 Vict. c. 28, commonly called Lord Dalhousie's Act, to facilitate the dissolution of certain railway companies.

that had been placed in their way, and to confer on apitalists the benefit of unrestricted powers of combnation.

This Act has since been repealed by the Companies At 1862; but as all the subsequent legislation on the subject is merely an extension of its principles, it will be expedient to consider them somewhat in detail.

provided by

The first object of the Act was to incorporate all Remedies companies formed under its provisions, or, in other Act of 1856, words, to consider the company as an individual Laving a distinctive name, and capable of suing and eing sued, and of contracting in such name. As soon as a company is endowed with these capacities, all the evils that have been pointed out disappear. The contracts being entered into by the company in its corporate character, the individual members of the company are not bound by them; the members of the company have a distinct existence from the company itself, and actions may be brought by the company against individual members, and by individual members against the company. Moreover, contracts between the company and third parties can be enforced with the same facility and by the same methods as contracts between individuals.

Secondly, the Act relieved companies from the oppressive procedure of courts of equity, by providing a complete system for the dissolution of companies, the payment of their debts, and the adjustment of the rights of the shareholders among themselves, either through the medium of a court, or by the voluntary


Remarks on compulsory

action of the company itself, thus sweeping away at once all technical obstacles to the adminstration of justice in the case of companies that may be unable or unwilling to carry on their business.

The same principles were applied to unlimited as well as limited companies. The only difference is in the extent of liability. In limited companies the creditor can only look to the shareholders for unpaid calls, and beyond this can require nothing at their hands; while in an unlimited company he may treat the aggregate capital of the individuals composing the company as a reserved fund, in the nature of a guarantee for the solvency of the company, and may, by means of a winding-up suit, indemnify himself out of that fund in the event of the corporate assets being insufficient.

Whether the company is wound up by the Court or voluntarily, officers called liquidators are appointed, whose duty it is to collect the property of the company, make calls upon the shareholders to the extent of their liability, and do all other acts necessary for a due realization and distribution of the assets.

If the winding up is voluntary, the liquidators are nominees of the company, and act on their own discretion; if compulsory, the liquidators are appointed by the Court, are officers of the Court, and are subject to its control throughout the whole of the winding up.

The systems of compulsory winding up and volunand voluntary winding up cannot possibly clash with one another, as it is provided that the voluntary winding

tary ing up.

up of a company is not to prejudice the right of any creditor to institute a suit for a winding up by the Ceart.

The two systems of winding up above mentioned were, in a sense, sufficient to provide for the winding up and dissolution of all companies registered under the Act.

The Court was invested with ample jurisdiction to wind up insolvent companies, while it was open to Companies which were able to pay their debts, or to make arrangements with their creditors, to avail themselves of the provisions relating to voluntary winding up.

The objection to a winding up by the Court is, of course, expense.

The liquidators have to refer to the Court on every occasion; the moneys received from the contributories must be paid into the Bank of England; and no transaction is completed without an expenditure of considerable fees.

tem of wind

partly com

partly vo

Such being the case, it occurred to the framers of Third sys the Act of 1856 that it might be possible to make a ing up, hybrid system of winding up, partly compulsory and pulsory, partly voluntary, which would avoid the expense of luntary. the constant interference of the Court, without deprivag either the creditor or contributory of a ready access to the Court in cases where its interference was really required.

In other words, it occurred to them to separate the ententious from the non-contentious business, by vesting, in the first instance, the liquidators in a

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