OFFICIAL INSPECTORS.

7842. By Board of Traae.-A body of members, holding not less than one-fifth part of the shares already issued by any company, are empowered to require the Board of Trade to appoint inspectors to investigate the affairs of the company, subject to the discretion of the Board (7845); and

7843. Banking Companies.—In any banking company, a body of its members, holding not less than one-third part of the shares already issued, are empowered to require the Board of Trade to order an investigation (7845); but,

7844. Guaranteed Companies.—When the capital of a company is - not divided into shares, one-fifth of the whole body of members are empowered to require the Board of Trade to order an investigation (7845).

7845. Necessary Evidence.-A requisition by a body of members duly authorized to require the Board of Trade to order an investigation into the affairs of a company, must be sustained by evidence of the necessity for such investigation; for,

7846. Lack of Evidence.-The Board of Trade, upon receipt of a requisition to order an investigation of the affairs of a company, is empowered to refuse interference if the requisition is not sustained by clear evidence that it is necessary, and that the requisitionists are not actuated by malicious or mischievous motives; and

7847. Security.-Every body of members of a company, acting as requisitionists for an investigation by the Board of Trade, must be prepared with security for payment of the costs of the investigation, which security the Board is empowered to require.

7848. Obligation of Officers.-When an investigation into the affairs of a company has been ordered by special resolution (7841), or by the Board of Trade (7842), every officer, agent, or servant of such company, is forthwith bound to afford facilities to the appointed inspectors;

7849. Upon Oath.-To submit to be examined upon oath with reference to the affairs of the company; and

7850. Production of Documents.-To produce for inspection all documents or books of the company which may be in their possession or control respectively; for,

7851. Penalties.-If any officer or agent of a company duly under inspection refuses to produce any book or document required by an authorized inspector, or to answer him any question relating to the affairs of the company, such officer or agent incurs a penalty of £5 for every separate refusal,

REPORTS OF INSPECTORS.

7852. Desirable Instructions.-The duly appointed inspectors of a company's affairs are invariably required to make a report of the results and conclusions of their investigation, for which their original instructions should specifically provide.

7853. To Subsequent Meetings.-When the inspection of a com. pany's affairs is made at the motion of the company by special resolution, the report of the inspectors must be presented to the company at a subsequent general meeting, which should be anticipated in the resolution.

7854. To the Board of Trade.—When an investigation of a company's affairs is made by order of the Board of Trade, the report of the inspectors, arising out of such investigation, must be made to the Board; and

7855. Option of Printing.-The Board of Trade, upon receipt of a report of inspectors of a company appointed by them, may order such report to be printed or not as they think fit; but,

7856. Official Copy.—In every case of a report of investigation of a company made under the Board of Trade, a copy of such report must be delivered by the Board at the registered office of the company; and

7857. Second Copy.-Any one or more of the members of such company is or are entitled, on application to the Board, to a second copy, but no more.

EXPENSES.

7858. Against Corporate Funds.-When an investigation into the affairs of a company is ordered by special resolution (7841), the expense invariably falls upon the company; but,

7859. Option of Board of Trade.-If the Board of Trade orders the inspection of a company, they may charge the expense as they think fit; either,

7860. Against Company.-The company may have to bear the expense; or,

7861. Against Requisitionists.—The requisitionists may have to pay; for,

7862. According to Report.-The charging of requisitionists with the expense of an inspection by the Board of Trade depends upon whether the report (7852) appears to justify them in the course they have taken.

WINDING UP.

PRELIMINARY CONSIDERATIONS.

STATE OF AFFAIRS.

7863. Present Members.-When, under inspection or otherwise, the affairs of a company appear to be in a hopeless state, it becomes the interest of the collective body of present members to proceed to winding up without a day's delay; on the other hand,

CONFLICTING INTERESTS.

7864. Past Members.-Should the affairs of a company be in a languishing state, it is the interest of every past member that proceedings for winding up should be deferred until all possibility of his liability has ceased (7861); and

7865. Directors Against Members.-In case of the affairs of a company being in an unsatisfactory state, the interests of the directors and the shareholders are frequently antagonistic; for,

7866. Interests of Members.—A prompt course with regard to winding up may sometimes save the shareholders of a languishing company a very considerable proportion of their possible loss; but,

7867. Interests of Salaried Officials. It too frequently happens that, though the affairs of a company may be beyond all hope of profit or recovery, the directors and other salaried officials are interested in prolonging the existence of the concern, for the sake of their current emoluments; hence,

7868. Weight of Evidence.-In weighing the evidence as to the advisability of winding up a company, the conflicting interests of directors, members, and past members (especially the more conspicuous individuals of either class) must be carefully taken into account.

VOLUNTARY WINDING UP.

INTEREST OF ALL PARTIES.

7869. By the Company.-When the affairs of a company are in such a state as to leave no hope of any good being derived from continuance, it is to the advantage of all parties that the winding up should be voluntary by the company itself.

BY LAPSE OF TIME.

7870. Objects Accomplished.-When a company has been formed for a specific object, which has been accomplished, or when, in an ticipation of any other contingency, provision has been made in the articles of association for winding up, the company may proceed, according to such accomplishment or provision, to a formal winding up at any time.

BY SPECIAL RESOLUTION.

7871. With or Without Reason.-Every registered company is empowered, at any time, with reason or without reason assigned, to proceed to a formal voluntary winding up, so soon as a special resolution (7838) has been passed to that effect; but,

BY EXTRAORDINARY RESOLUTION.

7872. As it is usually very difficult and tiresome to procure the passing of a special resolution (7838) by any company, the Act provides for sudden emergency or misfortune, by giving the power of voluntary winding up to any company which chooses to pass an "extraordinary" resolution to that effect.

7873. Statutory Definition.-An "extraordinary" resolution is limited in definition by the Act to one passed at any general meeting of a company by a majority of three-fourths of the members present (including proxies, if any), that it has been proved that the company, by reason of its liabilities, cannot continue its business, and that it is therefore advisable to wind up.

7874. Instant Effect.-An "extraordinary" resolution of a company takes effect from the moment of its passing, as there is no internal appeal against it, and, unlike a "special" resolution (7838), it requires no confirmation.

OPPOSITION.

7875. No Legal Obstacle.-When a resolution has been passed by a company, sufficient to authorize winding up, and the proceedings have been conducted with careful regard to giving all requisite notice, to all parties entitled thereto, of an intention to pass such resolution, and all the business is carried out in a straightforward way, there is no legal power to interrupt the subsequent winding up, by the company alone, independently of external interference (7881); and

7876. Retractation.-If a resolution has been duly passed for the voluntary winding up of a company, there is no legal power that can stay or prevent a winding up, unless the company, as such, by a majority at least equal to that which passed the winding-up resolution, thinks proper to retrace its steps; but

7877. Appeal to Chancery.-In every case of a resolution being passed for the voluntary winding up of a company, any dissentient or dissentients may appeal to the Court of Chancery, to take either the supervision or the entire management of the winding up; and

7878. Former Alacrity.—Some years since, there was a very ready alacrity manifested by the Court to enforce a compulsory winding up wherever application was made to it; and

7879. Inequitable Decisions.—Sometimes, it has been authoritatively said, such compulsion was enforced on very inequitable grounds; yet,

7880. Consequent Deterioration. - Experience has proved that winding up a company under compulsion of the Court, in the majority of cases, leads to great deterioration of assets, and the consequent sacrifice of all parties; so that, now,

7881. Present Disinclination.—The Court will not interfere in any way with the voluntary winding up of a company (already resolved upon), unless thoroughly sufficient and strong reasons be adduced to justify such interference; thus,

7882. Informal Proceedings Sustained.—A case arose where the voluntary winding up of a company was resolved upon by a very large majority of the members, with the unanimous concurrence of the creditors; but there were some considerable informalities in the proceedings, sufficient, under some circumstances, to make them void, and a minority of dissentients, relying upon the informalities, petitioned the Court to quash the voluntary winding up in favour of a compulsory one. The Court waived its right of objection to the formalities, sustained the resolution for a winding up entirely voluntary, and dismissed the petitioners with costs; notwithstanding,

7883. Evidence Sufficient.-It frequently happens that the dissentients to a resolution for the voluntary winding up of a company are able to adduce reasons and evidence sufficiently strong to prevail upon the Court to take the supervision of the business; and

7884. Power of Minorities.-Though the voluntary winding up of a company may have been resolved upon by an overwhelming majority, there may sometimes be reasons why such majority should not be suffered to proceed unchecked; thus,

7885. Check upon Majorities.—In a case where the voluntary winding up of a company was determined upon by a very large majority, it was proved by the dissentients that the directors, whose conduct was alleged to have been incorrect in several respects, had so managed matters as to be able to command a majority of the votes of the members, and the allegation was that they had used