APPENDIX. STATUTES. 101. penalties. or of any interest therein, and that every contract for or sale or disposal of such share or interest shall be void (b), and that every person entering into such contract shall forfeit à sum not exceeding ten pounds; and that for better protecting purchasers it shall be the duty of the directors of the company by whom certificates of shares are issued to state on every such certificate the date of the first comPenalty as to false plete registration of the company, as before provided; and that if any such director or officer knowingly make a false statement in that respect, then he shall be liable to the pains and penalties of a misde Contents of certificates of shares. certificates. Directors: Powers of direc tors. Restriction as to meanour. XXVII. And be it enacted, That with regard to the powers and duties of directors, it shall be lawful for the directors of any jointstock company registered under this act (c), 1. To conduct and manage the affairs of the company according to the provisions and subject to the restrictions of this act, and of the deed of settlement, and of any bye-law, and for that purpose to enter into all such contracts, and do and execute all such acts and deeds as the circumstances may require; and also, 2. To appoint the secretary, if any; and also, 3. To appoint the clerks and servants; and also from time to time, as they see fit, 4. To remove such secretary, clerks and servants, and to appoint others, as occasion shall require; and also, 5. To appoint other persons for special services as the concerns of the company may from time to time require; and also, 6. To hold meetings periodically and from time to time as the concerns of the company shall require; and also, 7. To appoint a chairman to preside at all such meetings, and in his absence to appoint a chairman at each such meeting: subject nevertheless to the provisions and restrictions of this act, and to the provisions of the deed of settlement of the company or other special authority, but not so as to enable the shareholders to act in their own behalf in the ordinary management of the concerns of the company otherwise than by means of directors: provided always, (b) This portion of the section is very important in its consequences, and its operation will prevent the present system of selling shares or scrip, in all cases to which it is applicable. But its applicability to shares or scrip of a railway company completely registered, is open to doubt. It may be assumed that railway companies are included in the first branch of the above section, wherein shareholders" of any joint-stock company completely registered under this act " are referred to. But in the second branch of the section the language is altered, and it proceeds thus: "And further, with regard to subscribers, and every person enti. tled, or claiming to be entitled, to any share in any joint-stock company the formation," &c. Now, this must be construed with reference to the proviso in sect. 2, ante, p. 38, which declares that the act shall not extend to railway companies, "except as thereinafter specially provided." Railway companies do not, therefore, seem to be specially provided for in the last portion of the 25th section. The question is pertinent in all cases, where railway companies, after complete registration, are waiting for their acts of incorporation. (c) A railway company seems to be within the definition of a “joint stock company registered under this act," and sect. 25 requires the appointment of directors. See p. 14 in the text. APPENDIX. STATUTES. lending money. cation of directors, patrons, &c. that it shall not be lawful for the directors to purchase any shares of the company, nor to sell any such shares, except shares forfeited on the nonpayment of calls or instalments, nor to lend to any one of their number, or to any officer of the company, any money belonging to the company without the authority and sanction of a general meeting of shareholders duly convened. XXVIII. And be it enacted, That henceforth, notwithstanding Pecuniary qualifianything to the contrary in any deed of settlement or other instrument by which a joint-stock company shall be constituted or regulated, it shall not be lawful to appoint any person to be or to act as a director, whether honorary or otherwise, or to hold the office of patron or president, or any other office of the like description, nor shall it be lawful for any person to act in any such capacity unless at the time of such his appointment or of such his acting he hold in his own right at least one share in the capital of such company; and that if, without having such share, any person be or become or act as director, patron, or president of such company, or in any office of such or the like nature, then he shall forfeit for every such offence a sum not exceeding twenty pounds; and that if any person be announced or held out by or on behalf of the company as a director, patron, or president, or as holding any office of such or the like description, without having so consented or acted, then each director of such company knowingly concurring in such representation shall forfeit a sum not exceeding twenty pounds. directors. XXIX. And be it enacted, That if any director of a joint-stock Disqualification of company registered under this act (d) be either directly or indirectly concerned or interested in any contract proposed to be made by or on behalf of the company, whether for land, materials, work to be done, or for any purpose whatsoever, during the time he shall be a director, he shall, on the subject of any such contract in which he may be so concerned or interested, be precluded from voting or otherwise acting as a director; and that if any contract or dealing As to contracts. (except a policy of assurance, grant of annuity, or contract for the purchase of an article or of service, which is respectively the subject of the proper business of the company, such contract being made upon the same or the like terms as any like contract with other customers or purchasers), shall be entered into, in which any director shall be interested, then the terms of such contract or dealing shall be submitted to the next general or special meeting of the shareholders to be summoned for that purpose; and that no such contract shall have force until approved and confirmed by the majority of votes of the shareholders present at such meeting; and that if at any time any director cease to be a holder of the prescribed number of shares in the company, or shall become a bankrupt or insolvent, or shall have suspended payment, or compromised with his creditors, or be declared a lunatic, then it shall be unlawful for any such director to continue as a director, or to act as such, and the office of such director shall be and is hereby declared to be vacant. XXX. And be it enacted, That notwithstanding it may be after- Validity of acts of wards discovered that there was some defect or error in the appointment of any person acting, or who may have acted, as a director of a joint-stock company registered under this act (e), or that such person was disqualified, yet all acts done by him as such director before (d) See note to sect. 27, ante. (e) See note to sect. 27, ante. Approval of ge neral meeting of shareholders. As to shares, &c. directors. APPENDIX. STATUTES. Acts of fraud or directors or officers a misdemeanour. the discovery of such defect or error, either solely or with other directors, shall be as binding on him, and on the company, and the directors and officers thereof, as if such person had been duly appointed or qualified, and, if such acts were done bonâ fide, shall be as binding on all persons whomsoever as if such person had been duly appointed or qualified. XXXI. And be it enacted, That if any such director or other wilful omission by officer of any joint-stock company registered under this act wrongfully do or omit any act, with intent to defraud the company or any shareholder therein, or falsify or fraudulently mutilate or fraudulently make an erasure in the books of account or books of register, or any document belonging to the company, then such director or officer shall be deemed to be guilty of a misdemeanour. Authentication and legal effect of books of record. Inspection of XXXII. And be it enacted, That if the entry of the proceedings of any meeting of the shareholders or of the directors of any jointstock company registered under this act (ƒ) purport to be signed by the chairman duly presiding at such meeting, and sealed with the seal of the company, then it shall be the duty of all courts of justice, justices, and others, and they are hereby required, to receive the book in which such entry shall be made as primâ facie evidence, not only of the proceedings of the meeting of which entry shall be so made, but of such meetings having been duly convened, and of the persons making or entering such orders or proceedings being shareholders or directors, and of the signature of the chairman. XXXIII. And be it enacted, That the books of any such company books of registry. wherein the proceedings of the company are recorded shall be kept at the principal or only place of business of the company, and at all reasonable times such books shall be open to the inspection of any shareholder of the company; subject nevertheless to the provisions of the deed of settlement or of any bye-law. Account books. Balancing of books. Examination of balance sheet. Production of the balance sheet. Inspection of aceounts by shareholders. Occasional inspection. XXXIV. And be it enacted, That the directors shall cause the accounts of such company to be duly entered in books to be provided for the purpose. XXXV. And be it enacted, That fourteen days at the least before the period at which the accounts are required to be delivered to the auditors as hereinafter provided, the directors of such company shall cause the books of the company to be balanced, and a full and fair balance sheet to be made up; and that previously to such balance sheet being delivered to the auditors as hereinafter provided, the directors, or any three of their number, shall examine such balance sheet, and sign it as so examined; and that when the balance sheet shall have been so examined, the chairman of the directors shall sign such balance sheet, and that thereupon the directors shall cause the same to be recorded in the books of the company. XXXVI. And be it enacted, That at each ordinary meeting of the shareholders the directors shall produce such balance sheet to the shareholders assembled thereat. XXXVII. And be it enacted, That during the space of fourteen days previously to such ordinary meeting, and also during one month thereafter, every shareholder of the company may, subject to the provisions of the deed of settlement, or of any bye-law, inspect the books of account and the balance sheet of the company, and take copies thereof and extracts therefrom; and that if at any other time (f) See as to this and the five following sections, note to sect. 27, ante. three directors authorize in writing any shareholder to make such inspection, then at such other time the shareholder so authorized may make such inspection. APPENDIX. STATUTES. Auditors: Appointment of auditors by company. Trade. XXXVIII. And be it enacted, That every joint-stock company completely registered under this act (g) shall annually at a general meeting appoint one or more auditors of the accounts of the company (one of whom at least shall be appointed by the shareholders present at the meeting in person or by proxy), and shall return the names of such auditors to the registrar of joint-stock companies; and By Board of that if an auditor be not appointed on behalf of the shareholders, or if he shall die, or become incapable of acting, or shall decline to act at the prescribed period, or if such return be not made, then on the application of any shareholder of the company it shall be the duty of the committee of Privy Council for trade and they are hereby authorized to appoint an auditor on behalf of the shareholders; and that such auditor shall continue to act till the next general meeting; and the due appointment of such auditor shall be returned to the registrar of joint-stock companies, and that thereupon it shall be his duty to register the same; and that it shall be lawful for the Commission- Salary of such ers of the Treasury and they are hereby empowered to appoint that auditor. the company shall pay to such auditor such salary or remuneration as to the said commissioners shall appear suitable, having regard to the duties of his office, and that thereupon such auditor shall be entitled to recover such salary from the company, as and when it shall become due, according to the terms of the appointment thereof. XXXIX. And be it enacted, That twenty-eight days at least before the ensuing ordinary meeting at which such balance sheet is required to be produced to the shareholders, the directors shall deliver to the auditors the half-yearly or other periodical accounts and the balance sheet required to be presented to the shareholders; and that the auditors shall receive from the directors such accounts and balance sheet, and examine the same. Delivery of ac counts to auditors. Auditors to receive and examino accounts. Powers of audit ors. XL. And be it enacted, That throughout the year and at all reasonable times of the day it shall be lawful for the auditors and they are hereby authorized, to inspect the books of account and books of registry of such company; and that the auditors may demand and Assistance to auhave the assistance of such officers and servants of the company and ditors. such documents as they shall require for the full performance of their duty in auditing the accounts. XLI. And be it enacted, That within fourteen days after the re- Report by auditceipt of such balance sheet and accounts the auditors shall either ors. confirm such accounts, and report generally thereon, or shall, if they do not see proper to confirm such accounts, report specially thereon, and deliver such accounts and balance sheet to the directors of the company. XLII. And be it enacted, That ten days before the ordinary meet- Publication of reing of such company the directors shall, subject to the provisions of ports. any deed of settlement or bye-law in that behalf, send or cause to be sent a printed copy of the balance sheet and auditors' report to every (g) Sect. 25 seems to require a railway company, after complete registration, and before it obtains an act of incorporation, to appoint audit ors. See p. 14 in the text. The note to sect. 27, ante, p. 52, is applicable to the above and five following sections. APPENDIX. STATUTES. Balance sheet and shareholder, according to his registered address, and shall, at such meeting of the company, cause such report to be read, together with the report of the directors. XLIII. And be it enacted, That within fourteen days after such auditors' report to meeting it shall be the duty of such directors and they are hereby be registered. required to return to the said registry office a copy of the balance sheet, and of the report of the auditors thereon; and that thereupon it shall be the duty of the registrar of joint-stock companies and he is hereby required to register or file the same with the other documents relating to such company. Contracts: Requisites of contracts. Report to secretary. Liability. Requisites of bills pany: XLIV. And for the purpose of regulating contracts entered into on behalf of any joint-stock company completely registered under this act (h), (except contracts for the purchase of any article the payment or consideration for which doth not exceed the sum of fifty pounds, or for any service the period of which doth not exceed six months, and the consideration for which doth not exceed fifty pounds, and except bills of exchange and promissory notes), be it enacted, That every such contract shall be in writing, and signed by two at least of the directors of the company on whose behalf the same shall be entered into, and shall be sealed with the common seal thereof, or signed by some officer of the company on its behalf, to be thereunto expressly authorized by some minute or resolution of the board of directors applying to the particular case; and that in the absence of such requisites or of any of them any such contract shall be void and ineffectual, (except as against the company on whose behalf the same shall have been made); and that every such contract for the purchase of any article the consideration of which doth not exceed the sum of fifty pounds, or for any services the period of which doth not exceed six months, and the consideration for which doth not exceed fifty pounds, entered into on behalf of any joint-stock company completely registered under this act, may be entered into by any officer authorized by a general bye-law in that behalf; and that every such contract, whether under seal or not, shall immediately after the same shall have been entered into be reported to the secretary or other appointed officer of the company on whose behalf the same shall have been entered into, who shall enter the same in proper books to be kept for that purpose; and that if any such contract be not so reported and entered, then the officer by whose default such contract shall not be so reported or entered shall be liable to repay to the company on whose behalf such contract may be made, the amount of the consideration agreed to be paid by or on behalf of such company in respect of such contract. XLV. And be it enacted, with regard to bills of exchange and proand notes by com- missory notes made, accepted, or indorsed on the behalf or account of any such company, so far as relates to the mode of making, accepting, or indorsing the same, and to the liability of any such company thereon, That if the directors of the company be authorized by deed of settlement or bye-law to issue or accept bills of exchange or promissory Signatures of two notes, then every such bill of exchange or promissory note shall be made or accepted (as the case may be) by and in the names of two of the directors of the company on whose behalf or account the same may be so made or accepted, and shall be by such directors expressed directors. (h) See note to sect. 27, ante, p. 52. |