CHAPTER VIII.

MANAGEMENT AND ADMINISTRATION.

EVERY company registered under the Companies Acts must have a registered office, of the situation of which written notice. must be given to the Registrar of Joint Stock Companies before the company commences business. [C. A. 1862, ss. 39, 40.]

Any subsequent changes in the address of the company must also be duly notified to the Registrar.

At the registered office of the company must be kept the register of members, and all communications and notices may be addressed there.

The company is not allowed to benefit by its own default. Therefore, if the company has neglected to register its office, a legal demand may be made at its unregistered office. [British, &c., Gas Co., 13 W. R. 649.]

The name of every limited company must be painted or otherwise affixed on the outside of every office or place in which the business is carried on, in a conspicuous position and in letters easily legible.

The name of the company must also appear on all notices, advertisements, and other publications of the company, and all bills of exchange, promissory notes, indorsements, cheques, and orders for money or goods purporting to be signed by or on behalf of such company, and in all bills of parcels, invoices, receipts, and letters of credit, and generally all documents of the company.

It must be noticed that the name of the company includes the word "Limited," which is an inseparable portion of that name. The omission of this affix renders the signatory per

sonally liable if any default is made by the company. [Penrose v. Martyr, E. B. & E. 499.]

The company must also have a common seal, the use of which is usually regulated by the articles of the company. The name of the company must be engraved in legible characters upon its seal.

There are certain things which a company can by law only do under its common seal; such as the granting of a power of attorney empowering a person to execute deeds for the company abroad. [Sect. 55, 1862.] The various instances in which the seal of the company is legally essential are mentioned throughout this work as they arise.

CONTRACTS.

Any contract which, if made between private individuals is required by law to be by deed, must be made under the common seal of the company, and may be in the same manner varied or discharged.

Any contract which, if made between private individuals, is required by law to be in writing and signed by the parties to be charged therewith, may be made on behalf of the company (without the use of its common seal) in writing, signed by any person acting under the express or implied authority of the company, and may be, in the same manner, varied or discharged.

Any contract which if made between private individuals is valid though made by parol only, and not reduced into writing, may be made in like manner on behalf of the company by any person acting under the express or implied authority of the company and may be in the same manner varied or discharged.

By sect. 47 Act 1862, special provision is made for the making, accepting, and indorsing of bills of exchange and promissory notes by the company.

Persons duly empowered to act for the company, who acting within the scope of their authority, enter into engagements for

and on behalf of the company do not thereby incur personal responsibility. [Okell v. Charles, 34 L. T. 822.]

A company is liable only on such contracts as are within the scope of its memorandum and articles, with the provisions of which all persons dealing with the company are presumed to be acquainted. [County Life Assurance, 5 Ch. 288; 39 L. J. Ch. 471.]

It not unfrequently happens that a company receives money ultra vires, as by an excessive exercise of its borrowing powers [Chapleo v. Brunswick Building Society, 6 Q. B. D. 696; Weeks v. Propert, 8 C. P. 427.] Any such transaction creates no legal or equitable debt against the company. [Ex parte Williamson, 5 Ch. 309.]

But where the money so received by the company has been simply employed by it in paying the legitimate debts and liabilities of the company, and the transaction has not really added to its liabilities, the lender will be allowed to stand in the shoes of the creditors so paid off.

It is consistent with the general principles of equity that those who pay legitimate demands which they are bound in some way or other to meet, and have had the benefit of other persons money advanced to them for that purpose, shall not retain that benefit, so as, in substance, to make those other. persons pay their debts.

But the burden of proving that the money lent has been applied strictly for the benefit of the company in paying its legal debts lies upon the lender. [Blackburn, &c., Society v. Cunliffe, 22 Ch. D. 61.]

Without a special authority, express or implied, a corporation has no power to make, indorse, or accept bills of exchange; yet in the case of trading companies where, in the ordinary course of business, the accepting of bills would be usual in carrying on the business of the company such authority will be implied. [Bateman v. Mid Wales Ry., 1 C. P. 499; Ex parte City Bank, 3 Ch. 758.]

If the number of members of a company is at any time reduced to less than seven, and if, after such reduction, the company carries on its business for a period of six months, then every person who is a member of the company at the time and is aware that it is carrying on business with less than seven members, is severally liable for the whole of the debts of the company contracted during such time, and may be sued alone for the same. [C. A. 1862, s. 48.]

GENERAL MEETINGS.

A general meeting of every company formed under the Companies Acts shall be held once at least in every year. In default of any regulations in the articles as to the summoning of general meetings, seven days' notice in writing sent to the shareholders is sufficient.

Members residing abroad are not entitled to any notice of meeting. [Union Hill Co., 22 L. T. 400.]

The Companies Act, 1862, recognises only one description of general meeting.

Table A however distinguishes between the ordinary general meetings of the company and those summoned out of the usual course. As these clauses are usually adopted by all companies it is proposed to treat here of general meetings under the distinctive names by which those regulations describe them.

General meetings are of two kinds, ordinary and extraordinary.

Ordinary meetings are those convened at regular intervals, not exceeding one year, in accordance with the articles.

All other meetings of the company are extraordinary meetings. The first general meeting of the company must be held within four months of the registration of the company, and may be either an ordinary or extraordinary meeting.

Subject to the articles of association any business of which proper notice has been given may be transacted at any meeting.

Extraordinary meetings may be convened at any time, subject to proper notice, at the option of the directors, or on a requisition in writing signed by a specified number of shareholders.

The resolutions passed by the company in general meeting, whether ordinary or extraordinary, are of three kinds: ordinary, extraordinary, or special.

An ordinary resolution may be passed by a simple majority in such a manner and may refer to such business (not required by the Acts to be effected by either extraordinary or special resolutions) as the articles permit.

An extraordinary resolution must be passed by a majority of not less than three-fourths of the votes of the members present at the meeting personally, or by proxy if the articles so allow. Notice of such resolution must have been duly given.

A special resolution must be passed by a majority of not less than three-fourths of the votes of the members present at the meeting personally, or by proxy if the articles so allow. Notice specifying the intention to propose such resolution must have been duly given. This resolution must be confirmed by a simple majority at a subsequent general meeting, of which notice must be duly given, held at an interval of not less than fourteen clear days nor more than one month from the date of the former meeting.

A quorum of members as fixed by the articles, or in default of articles by Table A, must be present to make any resolution valid. [De la Mott's Case, 31 L. T. 773.]

At the passing of any extraordinary or special resolution, unless a poll is demanded by at least five members, the declaration of the chairman that the resolution has been carried is deemed conclusive evidence of the fact.

In computing the majority when a poll is demanded reference is to be had to the number of votes to which each member is entitled by the regulations of the company. [C. A. 1862, s. 51.]

If it is intended to proceed by resolution under any of the