Forms.

21. To accept property on trust and to act as trustee and

executor.

22. To do all the matters hereinbefore mentioned, in any part of the world, and either upon the sole account of the company, or as agent or factor of, or partner with, any other company, society, or person.

ARTICLES OF ASSOCIATION.

INTRODUCTORY NOTES.

THE Act provides that the memorandum of association may, Articles. in the case of a company limited by shares, and shall in the case of a company limited by guarantee, or unlimited, be accompanied, when registered, by articles of association signed by the subscribers to the memorandum of association, and prescribing such regulations for the company as the subscribers to the memorandum of association deem expedient. Section 14 of the Act.

The articles are to be expressed in separate paragraphs, numbered arithmetically. Ibid.

They may adopt all or any of the provisions contained in May adopt the Table marked A. in the first schedule to the Act. Ibid., Table A. see infra, Precedent II.

In the case of a company, whether limited by guarantee or unlimited, that has a capital divided into shares, they must state the amount of capital with which the company proposes to be registered. Ibid., Section 14 of the Act.

And in the case of a company, whether limited by guarantee or unlimited, that has not a capital divided into shares, they must state the number of members with which the company proposes to be registered, for the purpose of enabling the registrar to determine the fees payable on registration. Ibid., see infra, Precedents III., IV., and V.

In a company limited by guarantee or unlimited, and having a capital divided into shares, each subscriber is to take one share at the least, and is to write opposite his name in the memorandum [?] of association [see supra, p. 89,] the number of shares he takes. Section 14 of the Act.

Section 15 of the Act provides, that in the case of a company limited by shares, if the memorandum of association is not accompanied by articles of association, or in so far as the articles do not exclude or modify the regulations contained in the Table marked A. in the first schedule to the Act, the last mentioned

When Table

A. to apply.

regulations are, so far as the same are applicable, to be deemed to be the regulations of the company in the same manner and to the same extent as if they had been inserted in articles of association and the articles had been duly registered.

The great majority of companies, formed under the Act, are registered as companies limited by shares, and it appears from Sections 14 and 15 above mentioned, that as regards such companies articles of association may be registered with the memorandum, but if not that Table A. will apply.

In a considerable number of cases no articles are registered, and Table A. accordingly applies.

It is also by no means uncommon to exercise the power contained in Section 15 by registering articles which adopt Table A. with some modifications. See infra, Precedent II., for an example.

However it is generally admitted that the additional expense, and it is but small, of preparing and registering a full set of articles is amply recompensed by the possession of a complete code of regulations.

The Act also provides that the articles of association shall be printed; they are to bear the same stamp as if they were contained in a deed, i.e., a 10s. stamp, and are to be signed by each subscriber in the presence of, and to be attested by, one witness at the least. Section 16 of the Act.

When registered, they are to bind the company and the members thereof to the same extent as if each member had subscribed his name and affixed his seal thereto, and there were in such articles contained a covenant on the part of himself, his heirs, executors, and administrators, to conform to all the regulations contained in such articles, subject to the provisions of the Act. Ibid.

And all monies payable by any member to the company, in pursuance of the conditions or regulations of the company, or any of such conditions and regulations of the company, shall be deemed to be a debt due from such member to the company, and in England and Ireland to be in the nature of a specialty debt. Ibid., see further, infra, p. 145.

As to the effect of registering the memorandum and articles, and of the issue by the registrar of the certificate of incorporation, see supra, p. 74.

tories.

As to the liability of present and past members to contri- Contribubute in the winding up, see Lindley, 1360, et seq.; Buckley, 168, et seq., and Collier on Contributories.

As to the alteration of the articles by special resolution, see Alteration of infra, "Resolutions."

articles.

As to the clauses usually inserted in articles, see infra, p. 142, Usual clauses. et seq.

It is well settled that if the articles as originally framed, or as altered by special resolution, purport to authorise an act prohibited by law or otherwise ultra vires the company, or inconsistent with the memorandum, they are pro tanto void. Ashbury, &c., Co. v. Riche, L. R. 7 H. L. 671; Hope v. International Financial Soc., W. N. 1876, 257; Dent's Case, 8 Ch. 768.

Articles cananything ultra vires.

not authorise

ment of offi

cers by

articles.

Articles of association very commonly contain clauses pur- As to appointporting to appoint or authorising the appointment of officers, e.g., managers, secretaries, solicitors, engineers, and others, upon certain terms as to remuneration. See as to such clauses, supra, p. 69.

As to each member being entitled to a copy of the memo- Members randum and articles, see supra, p. 92.

Where articles of association have been registered, a copy of every special resolution for the time being in force shall be annexed to or embodied in every copy of the articles of association that may be issued after the passing of such special resolution. Section 54 of the Act.

Where no articles of association have been registered, a copy of any special resolution shall be forwarded, in print, to any member requesting the same on payment of one shilling, or such less sum as the company may direct. Ibid.

entitled to copy of articles. Copies of special resolu tions.

If any company makes default in complying with the pro- Penalty. visions of the above section, it shall incur a penalty not exceeding 17. for each copy in respect of which such default is made; and every director and manager of the company who shall knowingly and wilfully authorise or permit such default shall incur a like penalty. Ibid.

Before registration the articles must be stamped with a 10s. Stamps. deed stamp and with a 5s. companies' registration stamp. See supra, p. 93.

Table A. not to apply.

Interpretation.

The company.

The capital.

Shares.
Stock.

Share warrants.

Registered shares or stock.

Members.

Directors.

In nine cases out of ten it will be found that the articles of association of an intended company can conveniently be based on this Precedent.

PRELIMINARY.

1. The regulations contained in the table marked A. in the first schedule to the Companies Act, 1862, shall not apply to the company.

See supra, p. 139. Section 15 of the Act.

2. In these presents, unless there be something in the subject or context inconsistent therewith,—

"The compairy" and "this company" both mean The Company, Limited.

"The capital" means the capital for the time being of the company.

"Shares" means shares in the capital.

"Stock" means stock into which any paid-up shares may have been converted.

"Share warrants" means warrants issued in respect of fully paid-up shares, or of stock, in pursuance of the Companies Act, 1867, and these presents.

"Registered shares and "registered stock" mean respectively shares and stock not for the time being represented by share warrants.

"Member" means a member of the company.

"Directors" means the directors for the time being of the company.