anonymous

actions of the company. The members of the board are not personally bound for the debts of the firm. An anonymous Dissolution of company is dissolved by the expiration of the time fixed by the companies. deed; by a resolution of the shareholders duly recorded, by a decision of the board of directors, when the capital has been reduced by half, and by bankruptcy. The dissolution of the company for any reason other than bankruptcy, must be entered in the register of trade. The winding up of the company is to be entrusted to the board of directors, unless other persons are nominated by the shareholders. The property is divided among the shareholders according to their shares, after all the debts have been paid. The books of the company must be kept for ten years. The merging of one company into another can only take place by authority of the State. A general regulation provides that the Government may, in special cases, consent that the advance necessary for the formation of the company may be reduced to twenty-five instead of forty per cent. (a). Holland.-The Royal authority is required for the formation Royal authoof anonymous companies. Such authority is granted where the rity necessary. company is not against good morals and public order, and provided the conditions of the deed are duly fulfilled. The company may also be dissolved by Royal ordinance, if the conditions of the deed are not observed. The Royal authority must be published in full in the official journal, and duly registered. The capital of the company is divided into shares, either personal or in blank. No share in blank can be issued till the whole amount of it has been paid in cash. The deed must provide for the transfer of shares, and for the registration of the transfer. If the company sustains a loss of fifty per cent., the same must be recorded in the register. If the loss amounts to seventy-five to one hundred per cent., the company must be dissolved, and the directors will become personally responsible for all obligations contracted after the discovery of such a deficit. dissolved. The Royal authority will only be granted when the original partners represent at least one-fifth of the capital. The company cannot commence till ten per cent. at least of the capital has been paid up. The deed must provide for the mode of voting. Once a year the directors must present to the shareholders a balance sheet of the affairs of the company (b). (b) Dutch Code, §§ 36 to 56,

(a) German Code, §§ 207 to 249.

When the loss amounts to 75

to 100 per

cent. the com

pany must be

Anonymous companies re

quire the au thority of the State.

A patent is required where exclusive privileges are sought.

Portugal. An anonymous company is an association designated by the name of the object it undertakes, and managed by directors, shareholders, or not, salaried or not. Such companies can only be formed by public deed, and such deed must be entered in the Register of Commerce. Till the company has been registered each shareholder is personally responsible for the contracts of the company (a).

Russia. Anonymous companies may be formed with a capital divided in shares. Such companies may be instituted for carrying out any useful invention not exclusively the property of a third person, any enterprise for science, art, trade, navigation, or any industrial operation. No anonymous company can be formed without the special authority of the State. Such authority may be granted either pure and simple or with temporary exemptions, as with freedom of taxes or with concession of monopolies or privileges. The authority of the Government does not in any case imply any guarantee for the success of the company. Anonymous companies are either for railways, aqueducts, or other objects implying scientific or technical knowledge or for general business, such as insurance. The authority with concession of privileges or monopoly can only be granted to companies for the first of these objects. A company desiring to obtain a privilege for the exclusive use of an invention made in Russia, must first receive a patent for the purpose. The privilege of the patent must be transferred by the patentee to the company, in which case the patentee would reserve to himself no other right than as the head or founder of the company. The duration of the company may be limited or unlimited, but the privilege or concession can only be granted for a limited time, having regard to the nature of the undertaking, the extent of the risk, the amount of the capital, and other considerations. It is understood that the exclusive use of the privilege cannot exceed the duration of the privilege itself, whatever be the duration of the company; that the expiration of the privilege does not imply the dissolution of the company, and that at the expiration of the time the shareholders may agree to renew the company, whilst in no case can the exclusive privilege be either renewed or extended.

(a) Portuguese Code, §§ 538 to 516.

Such companies are designated by the nature of the under-
taking. A company for commercial or manufacturing purposes
must have a licence proportioned to its capital. Companies
first established in Russia do not need such a licence. The
authority will not be granted to companies for objects contrary
to law or good morals, or injurious to the interests of the State.
No change can be made in the constitution of the company
without special authority. If the shares are not taken up, and
the founders wish to abandon the undertaking, the authority
would be revoked. Any exemption or privileges will cease by the
dissolution of the company or when any forfeiture is incurred.
The dissolution must be published and advertised. The shares
must be nominal and not to bearer. The terms and conditions
are all set forth in the deed. When the shares are to be paid
up in several instalments, the scrip may be delivered on the
first payment, setting forth the further payments to be made;
and, when the last payment has been made, the scrip will be
changed for the share. In no case can the share be issued
before the amount has been paid up. The founders of the
company have the right to reserve to themselves a limited
number of shares, not exceeding a fifth of the total number, and
the other shares may be allotted to other parties applying for
the same.
The shares are transferable, but the transfer must
be registered. All trade in shares or scrips is prohibited and
void. The liability of the shareholders extends only to the
amount invested. The management of the company is entrusted
to directors appointed by the shareholders. The directors are
the agents of the company, and are responsible for the execution
of their duties. The directors must give an account of their
business, setting forth the state of the funds, the receipts and
expenditure, the amount of profit or loss, and the reserve, if
any. Every dispute between the company and shareholders
must be settled by arbitration. The mode of obtaining the
authority from the State is as follows: A petition must be made
to the minister setting forth the character of the undertaking,
the patent possessed, the amount of capital, the number of shares,
the nature of the privileges sought, &c. The petition, with
all the documents, is remitted, with the opinion of the minister,
to the Council of Ministers, if it refers to a simple company,
and to the Council of the Empire if it concerns privileged

Shares must

be in favour

of persons

named.

Trade in scrips pro

hibited.

the State.

Authority of companies. Immediately on the authority being granted the deed must be executed, and the company is advertised in the public journals (a).

Spain.-Anonymous companies are formed with a capital divided into shares, the company being designated by the object of the undertaking, and the administration being entrusted to a board of directors. Anonymous companies must be formed by the authority of the State. The law relating to partnership applies also to anonymous companies (b).

(a) Russian Code, Regulation of Dec. 6, 1856, §§ 1 to 56.

(b) Spanish Code, §§ 265, 283, &c.

CHAPTER V.

JOINT STOCK COMPANIES.

TORY OBSER

OUR present Joint Stock Companies differ materially from INTRODUCthose Regulated Companies which, from very early times, carried VATIONS. on the commerce in Britain in distant parts of the world. Such companies consisted of a number of persons alike engaged in certain trades and possessing in common certain monopolies, but they had no joint stock. It is only in late years that the idea of trading upon a joint stock has been introduced with such manifest advantage for the purpose of carrying on operations of a permanent character, and requiring a permanent supply of funds. And it was with a view to enable the parties investing to withdraw such funds, without causing a complete abandonment of the undertaking, that such joint stock was divided into transferable shares.

Act.

The first legislative enactments with reference to joint-stock The Bubble companies, commonly called the Bubble Act (a), was one tending to repress the abuses arising out of such transfer of shares. That statute rendered illegal and void the acting or presuming to act as a corporate body, the raising or pretending to raise transferable stock, and the transferring or pretending to transfer or assign any share in such stock without legal authority. In progress of time, however, it became necessary to facilitate the formation of incorporated companies with power to issue and transfer transferable stock, as well as to sue and be sued in the name of its officers, without the limitation of liability usually arising from a charter of incorporation, and power was granted to the Crown (b) to grant certain corporate privileges to trading associations without limiting the liability of their member. Later on it was found expedient to give additional facilities for the for(b) 6 Geo. IV. c. 91.

(a) 6 Geo. I. c. 13.