THE SHAREHOLDERS' AND DIRECTORS' COMPANION: A Manual of EVERY DAY LAW AND PRACTICE FOR PROMOTERS, SHAREHOLDERS, DIRECTORS, SECRETARIES, UNDER THE COMPANIES ACTS, 1862, 1867, AND 1877. BY FRANCIS B. PALMER, OF THE INNER TEMPLE, ESQ., BARRISTER-AT-LAW, AUTHOR OF COMPANY PRECEDENTS," AND "PRIVATE COMPANIES." STEVENS & SONS, 119, CHANCERY LANE, Law Publishers and Booksellers. 1880. PREFACE TO FIRST EDITION. THE object of this work, as may be gathered from the title page, is to supply promoters, shareholders, directors, secretaries, creditors, and others with information upon the many legal and practical questions which commonly arise in connection with companies. In England alone there are many thousand companies, formed under the Act of 1862, now carrying on business. The capital invested in these companies amounts to several hundred millions sterling,* and the number of such companies increases at the rate of more than a thousand per annum. Moreover, Acts in terms almost identical with those of the Companies Act, 1862, are in force in India, Australia, New Zealand, and Canada, and large numbers of limited companies have been and are from time to time being formed under those Acts. In these circumstances, it is obvious that the number of persons connected with, and the interests involved in, such companies must be very large. No apology, therefore, seems necessary for the publication of a work which seeks to convey to such persons practical information in a concise and intelligible form. The following abbreviations are used : The Companies Act, 1862 (25 & 26 Vict. c. 89), is referred to as "the Act of 1862." The Companies Act, 1867 (30 & 31 Vict. c. 131) is referred to as 1867." 66 the Act of The Author's work on Company Forms and Precedents is referred to as "Company Precedents." FRANCIS B. PALMER. 5, NEW SQUARE, LINCOLN'S INN, April, 1878. * See Appendix to the Report of the Select Committee on the Companies Acts, 1862 and 1867. Session 1877. THE SHAREHOLDERS' AND DIRECTORS' COMPANION. PRELIMINARY. THE Companies Act, 1862, permits of the formation of companies of three kinds: (1) limited by shares, (2) limited by guarantee, (3) unlimited.* In this work it is intended to deal exclusively with companies limited by shares, and accordingly in the following pages the expression "a company" means a company limited by shares. A company is a body corporate, i.e., an artificial person. created by law. It comes into existence,† upon the issue by the Registrar of Joint Stock Companies of a certificate, stating its name, and that it is incorporated, and it continues to exist until it has been dissolved in accordance with the provisions of the Act of 1862. * Unlimited companies are rarely formed. Companies limited by guarantee seldom average more than two or three per cent. of those formed each year. Those that are formed are generally law societies, chambers of commerce, trade protection societies, and other similar associations intended to be supported by the annual subscription of members. Such societies can, and usually do, procure a licence from the Board of Trade (sec. 23 of the Act of 1867) to register without using the word Limited. Thus, a law society will register as "The Incorporated Law Society of Middlemarch.' For memoranda and articles of association of such societies, and information as to the formation thereof and the mode of securing the Board of Trade's licence, see Company Precedents." Since the decision in Ex parte Hargrove, 10 Ch. 542, that mutual insurance associations consisting of more than twenty persons are illegal unless registered, a considerable number of such associations have been registered as companies limited by guarantee, and a few as unlimited companies. 66 + For full particulars as to the mode of forming a company, see infra, p. 69, et seq. |