transfer or be registered as the holder of them, but the regulations generally limit and define his rights (see clauses 12 to 16 of Table A), and he is bound by them. Where the company receives notice of the marriage, the description of the shareholder in the register should be altered to, e.g., "A., the wife of B.," and A. should not afterwards be permitted to transfer without her husband's concurrence. In such a case, if A. dies, her executor or administrator will be entitled, and if B. dies, A. will become solely entitled. Where the husband applies to the company to register him as the holder of the shares, or executes a transfer of them to some other person, the company should require evidence of the marriage and of the identity of the parties, and should see that the regulations, if any, applying to such a case are complied with, and may then register the husband or the transferree as the holder.

Sometimes the husband transfers the shares to himself and his wife as joint holders. This is allowable unless the regulations contain something to the contrary, and in case of the death of one, the survivor will be solely entitled; but the company may decline to register a transfer of shares not fully paid up to a married woman, either alone or jointly with another.

Sometimes the shares of a female who contemplates marriage are transferred to trustees before the marriage, and, of course, in such case the company has no concern with the marriage.

Under section 4 of the Married Women's Property Act, 1870, any married woman, or any woman about to be married, may apply in writing to the directors of a company that any fully paid up shares to which she is entitled (ie., as registered holder or transferree) may be registered in the company's books in the name, or intended name, of the woman as a married woman entitled to her separate use. The directors are bound to register the shares accordingly, and they are to be deemed her separate property, and are to be transferable, and the dividends paid as if the holder were unmarried.

66

Where any such application is made before the marriage, the company will have no difficulty in complying with it. But where the application is made after the marriage, the company must ascertain that the shares

If they

belong to the applicant for her separate use. already stand in her name, the requisite evidence may consist of some settlement or other document under the husband's hand, otherwise a proper transfer from the registered holder expressed to be to her, "for her separate use," should be produced, or a transfer, accompanied by evidence that the shares are her separate property.

Where the application is made after marriage in respect of shares in the applicant's name, the company should, as a general rule, require the concurrence of the husband; but is not entitled to insist thereon. In any case, it would be prudent to give the husband notice; for if the company acts on forged documents, it would be responsible. The company can be compelled in a proper case to register under the Act above mentioned; and it is not entitled to charge for investigating the circumstances, unless its regulations otherwise provide. Sometimes the regulations provide that all shares in the name of a married woman shall be considered her separate property; in such case she can deal with them as if she were unmarried.

CALLS.

Part of the nominal amount of a share is generally made payable on application, and further part on allotment. So much of the nominal amount as is not by the terms of issue made payable at fixed times will have to be paid when called for by the directors.

But calls cannot be made on shares issued as fully paid up (supra, p. 6); nor upon shares issued as partly paid up, beyond the amount not credited as paid up.

The directors are generally given power to make calls at such times as they think fit. Sometimes it is provided that no call shall exceed a given sum, e.g., £1 per share, or be made at an interval of say three months after the last preceding call.

And in all cases a reasonable notice is required, usually fourteen or twenty-one days.

A call is made by the directors passing a resolution “That a call of £- per share, payable at the company's bankers, on the day of be, and the same is,

hereby made."

Thereupon, by virtue of the Act of 1862, each of the shareholders becomes indebted to the company in a sum equal to the amount of the call multiplied by the number of shares held by him, and the company can bring an action against him for the same.

The payment of a call may also be enforced by forfeiture, as to which see infra.

If a shareholder cannot conveniently pay a call he should sell or mortgage his shares. However, very commonly he endeavours to impeach the authority of the directors who made it, and thus delay the company's action till he is able to pay up. Perhaps, too, he has set off, and uses this as a defence in the action. It is no defence to an action that the amount called for was not bona fide required for the business of the company.

Nor can a member of a company obtain the assistance of the Court to restrain the directors from making a call which the applicant considers unnecessary.

A call made by persons not duly appointed directors is void and it is a valid defence to an action for calls that the directors who purported to make the call were not duly qualified, or that a quorum was not present at the meeting which made the call, or that the number of directors is below the minimum. Almost any irregularity will invalidate the call. A minute of the resolution making a call ought to be carefully made, for there is some question whether the call can be otherwise proved. The resolution ought to fix the time for payment, and it is desirable that it should also state where the call is to be paid, and to whom.

FORFEITURE.

The regulations usually provide that if a call is not paid in due course, the directors may serve the defaulting shareholder with a peremptory notice to pay, and in default may declare his shares forfeited. The rules as to forfeiture are generally in much the same terms as those in Table A, clauses 17-22.

This power to forfeit is a most valuable one to a company, and saves it from much litigation. The receipt of a notice of intention to forfeit generally secures prompt

payment of a call, if the shareholder can find the means. If the shares are worth anything considerable, such a notice is much more effectual than bringing an action for the amount.

If, however, the shares are worth little, e.g., by reason of depreciation, it may be more for the company's interest not to forfeit, but from time to time to sue for the calls and compel payment.

The effect of forfeiture is to put an end to all the rights of the forfeiting shareholder in the shares. But it is generally provided that he shall remain liable for the amount due at the time of forfeiture. He will not, however, be liable for future calls. The directors are generally given power to annul a forfeiture within a certain period upon payment of the arrears and costs.

The power to forfeit shares is strictly construed. Any slip or error in the proceedings invalidates the forfeiture. Thus, if a proper notice is not given, or if the directors making the call or resolving on the forfeiture were not duly appointed or properly qualified, the forfeiting shareholder will be able to undo the forfeiture. And there are many other circumstances sufficient to render the forfeiture invalid.

In order to undo a forfeiture the forfeited shareholder may bring an action, or cause a motion to be made under section 35 of the Act of 1862 to rectify the register. See infra, p. 72.

A member whose share has been improperly forfeited should appeal to the Court for redress. He will obtain it without difficulty, and the company will have to pay the costs.

So, too, if the directors threaten improperly to forfeit a member's shares, e.g., unless he pays a call which has not been duly made, he should appeal to the Court for an injunction (infra, p. 108) to prevent such forfeiture.

When directors intend to forfeit shares, they very commonly take legal advice as to the proper course; this precaution saves them from errors which might cause litigation and loss.

See, further, Company Precedents, p. 310, et seq.

LIEN.

The regulations of many companies provide that the company shall have a lien on the shares of each member for all monies due from him to the company, whether for calls or otherwise, and gives the company power in default of payment to sell and apply the proceeds in discharge thereof, the surplus to be handed over to such member. This right of lien must be borne in mind when a person proposes to transfer a share.

If the shares are sold by the company without giving proper notice (if any is required), or otherwise in breach of the regulations, the shareholder can get damages for the loss, and perhaps recover the shares; and if the company does not pay over the balance, he or his representatives can bring an action for an account of the sale, and payment of the balance.

The regulations sometimes provide that the directors may refuse to register a transfer of shares on which the company has a lien.

INCREASE OF CAPITAL.

The regulations generally provide that "the company may by special resolution [or the directors with the sanction of a special resolution may '] increase the capital."

Sometimes it is provided that "the company in general meeting" may do so, and sometimes simply that "the company may increase its capital." In the first case, a special resolution is necessary, as to which see infra, p. 56; in the second, a simple resolution passed at an extraordinary general meeting; and in the third (provided the articles contain a clause conferring general powers on the directors, as at p. 27, infra), a resolution of the directors acting in the name of the company, infra, p. 29.

The following is an example of a resolution:

"That the capital of the company be increased to £30,000 by the creation of 10,000 new shares of £1 each [such shares to be called preference shares, and to carry a fixed cumulative preferential dividend at the rate of 5 per cent. per annum.]"