An amalgamation is always a delicate operation, demanding great care and skill in adjusting and preserving the rights of respective parties. It presents, however, no insuperable difficulties.

If the articles of a company as originally framed do not provide for an amalgamation, it is not competent for the company to alter the articles by special resolution in order expressly to avoid the operation of sect. 161 of the Act of 1862. [Fox's Case, 6 Ch. 176.]

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The Companies Act, 1862, s. 161, has provided a method of amalgamation which, though objectionable as having to be carried through by means of a liquidation, affords an easy modus operandi in the case of companies which have no powers for that purpose in their memorandum or articles.

Indeed, in all cases where an amalgamation by means of a formal winding-up is not likely to injure the credit of the company, it is much safer to proceed under the Act of 1862 than to rely upon possibly dubious powers conferred on the company by its memorandum or articles.

By sect. 161, any company which is being or is to be wound up either voluntarily or under supervision, may transfer the whole or part of its business or property to a second company in exchange for shares or other securities in such second company, or under any other arrangement by which the members. of the first company may receive something, either shares or other securities, in the second company, in lieu of cash or in addition thereto.

Any such arrangement must be carried out by the liquidator with the sanction of a special resolution of the company.

Any member who dissents must, within seven days after the confirmation of the special resolution, leave a written notice at the registered office of the company requiring the liquidator to do either one of two things, to abstain from carrying out the proposed transfer, or to purchase his interest at a valuation. The liquidator may thereupon exercise his option as to the

course he will adopt. [Union Bank of Kingston-upon-Hull, 13 Ch. D. 808.]

If the liquidator elects to purchase the dissentient's interest at a valuation, he may either agree to a price or refer it to arbitration under the "Companies Clauses Consolidation Act, 1845." [C. A. 1862, s. 162.]

Any dissentient shareholder who does not avail himself of the provisions of sect. 161 can only dissent and abandon his interest in the company. [Higgs' Case, 2 H. & M. 657.]

No interest is payable on the amount of an award settling the price to be paid for the purchase of the interest of a dissentient member under sect. 162, except from the date when payment of the amount awarded is demanded. Such interest is calculated at 4 per cent. [United States Direct Cable Co., 48 L. J. Ch. 665.]

COMPOSITION.

The Joint Stock Companies Arrangement Act, 1870, allows a company in difficulties to pay a composition to its creditors, resembling somewhat the provisions of the Bankruptcy Act, 1869, as applied to individuals.

Where any company is in course of being wound up, either voluntarily, or under supervision, or compulsorily, and any compromise or arrangement with its creditors as a body or as a class is proposed, the Court may, on the application of any creditor, or of the liquidator, order a meeting to be summoned of the creditors or of a particular class of them.

If at such meeting a majority in number representing threefourths in value of such creditors or class of creditors, being present either in person or by proxy, shall agree to any scheme of arrangement or compromise, such scheme shall, if sanctioned by an order of the Court, be binding on all such creditors or class of creditors.

A majority in number representing three-fourths in value of the creditors present, either in person or by proxy, is sufficient;

it need not be three-fourths of the total amount of the debts. [Bessemer Steel Co., 1 Ch. D. 251.]

Any such scheme so passed and sanctioned is binding both on the liquidator and the shareholders without any formal consent on their part.

The provisions of this Act can be readily applied whenever the debts of the company can be easily ascertained.

If from any cause it becomes a matter of extreme difficulty to estimate the liabilities of the company, as in the case of an insurance company, the Court will not proceed under the Arrangement Act. [Albert Assurance Co., 6 Ch. 381.]

In Slater v. Darlaston Steel Co. (1877, W. N. 165), a scheme was approved by the Court by which unsecured creditors were to be allotted fully paid-up shares in the new company.

In another case the Court sanctioned a scheme by which one creditor took over the assets, paying the costs of the winding-up and a composition of 5s. 3d. in the pound to the other creditors. [Bessemer Steel Co., 1 Ch. D. 251.]

Although a scheme for arrangement or composition can be carried in a voluntary winding-up, it is usually safer for a friendly creditor to present a petition for a compulsory order so as to prevent the intervention of a hostile creditor and to have the control of the proceedings.

At the hearing of the petition the Court will either direct the petition to stand over or make a winding-up order, and will on summons call the necessary meeting, and on petition confirm the resolutions duly passed. The petition can then be dismissed or the order rescinded, and the company may resume business. [Western of Canada Oil Co., 1874, W. N. p. 148.]

The Court will always facilitate any arrangement likely to be beneficial to all parties, and will not be astute to find technical defects in the proceedings. [Dynevor Colliery, 11 Ch. D. 605.]

In any arrangement under this Act the rights of preferential creditors will be respected by the Court and no scheme

sanctioned to their prejudice. [Richards & Co., 11 Ch. D. 676.]

SALE.

The memorandum of the company generally contains a power to sell the undertaking, as well as all or any part of the property of the company.

A power of sale, without more, means only a power to sell for cash; it is usual for the articles to contain a power to sell for shares or other interests in any other company.

The sale of the undertaking can hardly be considered one of the objects for which the company was formed, and it is therefore more than doubtful whether any power to that effect is of any real value except as connected with a voluntary winding-up.

The power to sell any portion of the assets is of course quite valid. A general power to sell includes a power to part with all the assets, provided that by so doing the company does not disable and preclude itself from carrying on its business. [Wilson v. Miers, 3 L. T. 780.]

CHAPTER XIII.

WINDING-UP.

THE only methods by which a company which has once legally existed can legally cease to have such existence are:

(1) By being struck off the register and declared dissolved by the Registrar of Joint Stock Companies.

(2) By being wound up.

STRIKING OFF THE REGISTER.

By the Companies Act, 1880, sect. 7, where the Registrar of Joint Stock Companies has reasonable cause to believe that a company registered under the Companies Acts is not carrying on its business or otherwise in operation, he shall send to the company by post a letter inquiring whether the company is carrying on business or in operation.

If the Registrar does not within one month after sending the letter, receive any answer thereto, he must within fourteen days after the expiration of the month, send to the company by post a registered letter referring to the first letter and stating that no answer thereto had been received by him, and also stating that if an answer to the second letter is not received by him within one month from the date thereof, a notice will be published in the London Gazette with the view to striking the name of the company off the register of Joint Stock Companies.

If the Registrar either receives an answer from the company to the effect that it is not carrying on business or in operation, or does not within one month after sending the second letter receive any answer thereto, the Registrar may publish in the