1. To adopt and carry into effect an agreement, dated, &c., and made, &c., for the purchase of the business now carried on by Messrs., with the manufactory, lands, buildings, plant, stock-in-trade, chattels, and effects, used in the said business, and the contracts subsisting in relation thereto, and the goodwill thereof. To carry on the said business as heretofore carried on, and generally to carry on the business of a in all its branches. There does not appear to be any particular advantage in mentioning the preliminary agreement in the memorandum, though it is not uncommonly done. Where the company is registered without articles it may be useful, in order that every member may be fixed with notice of the agreement. But in most cases it seems better to state in general terms the purchase of the property to be one of the objects, and then, if desired, the agreement can be approved by the articles. The mention of the agreement as one object in the memorandum does not bind the company to adopt it any more than its mention in the articles. See infra, Articles of Association, Miscellaneous Clauses, Notes to Form 1. Common Common TO ADOPT AGREEMENT. Another Form. 2. To adopt and carry into effect, either with or without modification, as may be arranged, an agreement, dated, &c., and made between A., of the one part, and B., on behalf of this company, of the other part, a copy whereof is set forth in the schedule to the articles of association of the company, [or, a copy whereof has for the purpose of identification been indorsed with the signatures of the subscribers to this memorandum.] TO ADOPT AGREEMENT. Another Form. 3. To enter into and carry into effect an agreement which has been already prepared, and is expressed to be made between A. B., of the one part, and the above-named company of the other part, and a copy whereof has, for the purpose of identification, been indorsed with the signatures of the subscribers to this memorandum. TO ACQUIRE BUSINESS, ETC. 4. To purchase or otherwise acquire certain mineral properties, ironworks, and collieries, known as the, together with the veins of coal, ironstone, fire-clay, and other minerals, under the same, and the wharves, tramways, and railways, hereditaments, stock-in-trade, chattels, effects, and property, held or used in connection therewith. TO ACQUIRE BUSINESS, ETC. Another Form. 5. To purchase or otherwise acquire the business heretofore carried on by A. and B. in partnership, at the Works, &c., and the goodwill thereof, and all or any part of the real and personal property of, or belonging to, or used in or about or in connection with the said business, and to undertake all or any part of the liabilities of the said A. and B. in relation thereto. TO ACQUIRE BUSINESS. Reconstruction. 6. To purchase, or otherwise acquire, and undertake, all or any part of the business, property, and liabilities, of The Company, Limited. This will be one of the objects of a company formed for reconstruction purposes. See infra," Reconstruction." TO ACQUIRE BUSINESS, ETC. Amalgamation. 7. To purchase, or otherwise acquire, all or any part of the property, assets, and liabilities of the following companies, namely, the A. Company, Limited, the B. Company, Limited, and the C. Company, Limited. This is suitable for a company formed to effect an amalgamation of several existing companies. See infra, " Amalgamation." TO PURCHASE PROPERTY, ETC. 8. To purchase, take or lease or in exchange, hire, or otherwise acquire, any real and personal property, and any rights, or privileges, necessary or convenient for the purposes of the company [and in particular any land, buildings, easements, machinery, plant, and stock-in-trade.] A form to this effect is generally inserted. Sometimes the words in brackets are omitted, but it is usual to enumerate a number of items which the company will be likely to require. TO BORROW AND MORTGAGE, ETC. 9. To borrow or raise money by the issue of, or upon, bonds, debentures, bills of exchange, promissory notes, or other obligations, or securities, of the company, or by mortgage or charge of all or any part of the property of the company, or of its uncalled capital, or in such other manner as the company shall think fit. The above is now very commonly inserted. In most cases it is unnecessary, for a power to borrow is readily implied. Bryon v. Metropolitan, &c., Omnibus Co., 3 D. G. & J. 123 ; 6 W. R. 817; in re Marine Common Common Mansions Co., 4 Eq. 601 ; ex parte City Bank, 3 Ch. 758. Where a company has power to borrow it has an implied power to secure the repayment of borrowed money by mortgage. Australian, &c., Co., v. Mounsey, 4 K. & J. 733; Bryon v. Metropolitan, &c., Co., ubi supra. Indeed it was said in the case of the Patent File Co. (6 Ch. 85), by Mellish, L. J., that a company can mortgage unless expressly prohibited from doing so. See also Gibbs' and West's Case, 10 Eq. 212. As however the objects are now usually stated in detail, it is only consistent expressly to invest the company with power to borrow and to mortgage. As to mortgaging uncalled capital, see infra, Debentures, Introductory Notes. TO ACCEPT BILLS, ETC. 10. To make, accept, indorse, and execute, promissory notes, bills of exchange, and other negotiable instruments. A company cannot issue negotiable instruments unless it has an express or implied power given to it by the memorandum. An implied power arises where the business of the company is one which cannot, in its ordinary course, be carried on without the issue of such instruments, or where upon a fair construction of the memorandum the power appears incidental or conducive to the objects. In re Peruvian Railways Co., 2 Ch. 623. In this case Malins, V.-C., expressed an opinion that "having regard especially to the 47th section of the Act of 1862, all companies constituted under that Act might issue bills of exchange." See Section 47, infra. However, when the matter came before the Appeal Court, Lord Cairns said: "In my opinion the Act does not give that power [of accepting bills of exchange and issuing negotiable instruments] to companies as an incident of their incorporation under it, but leaves the power of a company so incorporated, with regard to negotiable instruments, to be determined upon the proper construction of the memorandum and articles of association." The power to accept and issue bills and other negotiable instruments is one with which it is generally desired to endow a company, and where the desire exists it is expedient to provide accordingly in the memorandum, at any rate where the company is not formed for purposes which necessarily imply the power. The following are cases in which it has been held that companies had no such power. Bramah v. Roberts, 3 Bing. N. C. 963, which was a case of a Gas company; Dickenson v. Valpy, 10 B. & C. 128, in the case of a Mining company; Steele v Harmer, 14 M. & W. 831, in the case of a Cemetery company; Bull v. Morrell, 12 Ad. & E. 745, in the case of a Salt and Alkali company; Thompson v. Universal Salvage Co., 1 Ex. 694, in the case of a Salvage company; Bateman v. Mid-Wales Railway Co., L. R. 1 C. P. 499, in the case of a Railway company. TO PURCHASE OTHER BUSINESSES. 11. To purchase, or otherwise acquire, and undertake, all or any part of the business, property, and liabilities, of any other company [or, of any partnership or person carrying on any business which the company is authorised to carry.] Or omit the words in brackets, and substitute these: the objects of which shall be altogether or in part similar to those of this company. The above ought to be expressly specified among the objects if the company is intended to have the power. Ernest v. Nicholls, 6 H. L. 401; Lindley, 480. It may, however, possibly be implied from general words. The Era Assurance Society, Williams' Case, 32 L. J. Ch. 207; 9 W. R. 67. Express mention should be made of the liabilities. But see Overend & Gurney Co. v. Gibb, L. R. 5 H. L. 480, as to what is sufficient. TO TAKE SHARES IN OTHER COMPANIES. 12. To take, or otherwise acquire, and hold shares in any other company having objects altogether or in part similar to those of this company, or carrying on any business capable of being conducted so as directly or indirectly to benefit this company. Where a company is intended to have such a power as above, it ought to be expressly specified in the memorandum, unless the objects stated necessarily imply the power. See the Royal Bank of India's Case, 4 Ch. 252. It was at one time contended that it was illegal for one company to take shares in another, but the contrary is now well settled. See in re Barned's Banking Co., 3 Ch. 105, and the case last cited. The only question is whether the memorandum expressly or impliedly gives the power. Accordingly, where one of the objects of the company was, "To purchase or accept any obligations, bonds, debentures, notes, and shares, in any foreign or English company, and to negotiate the sale of any such securities," it was held that the company had power to acquire shares in another company. In re Barned's Banking Co., ubi supra. See also International Contract Company's Case, W. N., 1869, 24. But where the objects of a discount company was, among other things, stated to be "the making advances and procuring loans on, and the investing in, securities," it was held that the company had no power to acquire shares in another company for the purpose of increasing its connections. Joint Stock Discount Co. v. Brown, 8 Eq. 381. TO PROMOTE OTHER COMPANIES, ETC. 13. To promote any other company for the purpose of acquiring all or any part of the property and liabilities of this company, and to take, or otherwise acquire, and hold shares in any such company, and to guarantee the payment of any debentures or other securities issued by any such company. Common Forms. |