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sections of the Companies Acts, clear notice of such intention must be contained in the notice convening the meeting, and a reference should be made to the section under which it is proposed to act.

A copy of every special resolution passed by any company must be printed and forwarded within fifteen days to the Registrar of Joint Stock Companies and be recorded by him. Penalty for omission, £2 per day.

A copy of every special resolution must be annexed to or embodied in every copy of the articles of association that may be issued after the passing of such resolution.

At general meetings where proxies are allowed to be used, each proxy must bear a penny stamp properly cancelled if adhesive, and may be available for one meeting or any adjournment thereof.

If the proxy authorises the nominee to vote at more than one meeting or any adjournment thereof, as, e.g., " at any meeting that may be held in the year 18," the document must be stamped with a ten-shilling stamp as a power of attorney.

If the articles of the company prescribe any formalities with respect to the use or attestation of proxies they must be strictly followed. [Harben v. Phillips, 1882, W. N. p. 170.]

Proxies do not count as shareholders present and qualified to vote. Thus where by the articles a poll had to be demanded by shareholders qualified to vote and holding in the aggregate 2000 shares, it was held that a member holding twenty shares only and proxies for more than 2000 was not a person holding shares within the meaning of the articles, and could not demand a poll. [The Queen v. Government Stock Co., 3 Q. B. D. 442.]


By sect. 44 of the Act, 1862, it is enacted that every limited banking company and every insurance company and deposit, provident, or benefit society under the Art shall before it commences business, and also on the first Monday in February and

the first Monday in August in every year during which it carries on business make a statement of its assets and liabilities in a form provided by the Act. A copy of this statement must be put up in a conspicuous place in the Registered Office, and in every branch office or place where the business of the company is carried on, under a penalty for omission of £5 per day.

Every member and every creditor of the company is entitled to have a copy of this statement on payment of a sum not exceeding sixpence.

No partnership consisting of more than ten persons can now be formed for the purpose of carrying on the business of banking, unless it is registered as a limited or unlimited company under the Companies Acts. [C. A. 1862, s. 4.]

Banking companies have from time to time been the subject of special legislative care, anxious at one time to protect banks from an unscrupulous public and at another to guard the public from unscrupulous banks.

To protect banking companies from the effect of panics caused by speculative transactions in their shares the Bank Shares Act, 1867-better known as Lehman's Act was passed to prevent stock-jobbing dealings in bank shares.

By the provisions of Lehman's Act all contracts for the sale of shares of any joint stock banking company in the United Kingdom and Ireland, are null and void unless the numbers by which such shares are distinguished are set forth in the contract. If there be no numbers, as in the case of stock, the name of the registered proprietor must be set forth.

No custom of any Stock Exchange, if contrary to the statute, is valid. [Neilson v. James, 1882, W. N. p. 70.]

Any person, principal, broker or agent, wilfully inserting in any such contract false numbers or names is guilty of a misdemeanour.

Joint stock banking companies are bound to shew their list of shareholders to any registered shareholder during business hours.

The Companies Act, 1879, was passed consequent on the great bank failures of the previous year, to facilitate existing unlimited banks in registering themselves with limited liability. A further object was to provide safeguards for the protection of the public against frauds, by the institution of a system of compulsory audit.

By this Act any company already registered as an unlimited company may register anew as a limited company.

Any unlimited company so re-registering may by resolution increase the nominal amount of its capital by increasing the nominal amount of each of its shares. But no part of such increased capital is capable of being called up except in the event of and for the purposes of the company being wound up. Where no such increase takes place, an unlimited company may provide that a portion of its uncalled capital shall only be capable of being called up for the like purposes.

A limited company may by special resolution declare that any portion of its capital which has not been already called up shall not be capable of being called up, except in the event of and for the purpose of the company being wound up.

It will be observed that this clause, though directed primarily to banking companies, is applicable equally to all limited and unlimited companies.

The provisions as to reserved liability may now be fairly considered to be a dead letter. To fetter uncalled capital can never operate for the benefit of shareholders; and no new company cares to adopt the principle of reserved liability in its inception.

Any limited bank having a note issue is not entitled to limited liability in respect of those notes; the liability of its members in respect of the notes is unlimited. In the case of a winding-up, if the general assets of the bank are insufficient to pay the note-holders and the general creditors, then the members, after satisfying the remaining demands of the note-holders, must contribute to the assets a sum equal to any dividend paid to the note-holders out of the estate.

Any limited bank having a note issue may make a statement on its notes that the liability of its members in respect of its notes is unlimited.

The Companies Act, 1879, also provides for the more effective audit of the accounts of all banks registered after the passing of the Act, with limited liability. Once at least in every year the accounts must be examined by an auditor or auditors elected annually by the company in general meeting.

No director or officer of the bank is capable of being elected such auditor.

Every auditor must have the fullest information afforded him and free access to the books of the bank. He must make a report to the members on the accounts, and must in his report state whether he considers the balance sheet a full and fair one. The report must be read to the company in general meeting.

Every balance sheet of a limited bank must be signed by the auditor, the secretary, or manager, and by at least three of the directors of the company.

By 7 & 8 Vict. c. 32 all banking companies are bound to furnish annually to the Commissioners of Inland Revenue certain returns for publication in the London Gazette. But by 45 & 46 Vict. c. 72, s. 11, it is provided that all banking companies registered under the Companies Acts 1862 to 1880 which have duly forwarded to the Registrar of Joint Stock Companies the list of shareholders and summary required by the Companies Act 1862, and have added thereto a statement of the names of the several places where their business is carried on, shall not be bound to furnish any of the returns abovementioned to the Commissioners of Inland Revenue.

By 43 & 44 Vict. c. 20, s. 57, it is not now obligatory on the Commissioners to publish in any newspaper any return made to them by any banking company duly registered under the Companies Acts 1862 to 1880.


Life assurance companies, in addition to the provisions of the Companies Acts, are regulated by three Acts known as the Life Assurance Companies Acts, 1870, 1871, and 1872.

These Acts provide that every assurance company established in this country, and every company established out of the United Kingdom, which shall commence to carry on the business of life assurance within the United Kingdom, must first deposit in the Chancery Division of the High Court a sum of £20,000, which sum will be returned to the company so soon as its life assurance funds accumulated out of premiums shall amount to £40,000. A colonial assurance company which prior to commencing business in England had accumulated more than this sum, was held entitled to an immediate return of the deposit. [Colonial Mutual Life, 1882, W. N. p. 29.]

Provision is made for the publication of accounts, and each company must annually deposit with the Board of Trade a signed statement and abstract of accounts in forms provided by the Act, which the Board must annually lay before Parliament.

Any assurance company under these Acts may be wound up on the application of policy-holders or shareholders on its insolvency being proved to the Court.

Provisions as to the amalgamation of life assurance companies and as to the valuation of policies and novation by policy-holders, together with other clauses specially framed for the protection of the policy-holders, are contained in the Life Assurance Companies Acts, 1870, 1871, and 1872, into which it is not intended in this work to enter.

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