company, or any of them, shall be open to the inspection of the members; and no member shall have any right of inspecting any account or book or document of the company, except as conferred by statute or authorised by the directors, or by a resolution of the company in general meeting. The above clause is not uncommonly used. Few companies allow members free access to the books. Where a right of inspection is given as regards "the books, wherein the proceedings of the company are recorded," a member has no right to inspect the minute book of proceedings of directors. Reg. v. Mariquita, &c., Co., 1 E. & E. 289. See also Metropolitan, &c., Bank, Ex parte Davis, 16 W. R. 668. A right of inspection given by the articles ceases when the voluntary winding up begins. Yorkshire, &c., Co., 9 Eq. 650; 18 W. R. 541. Where a winding-up order has been made, Section 156 of the Act applies, under which the Court has express power to permit inspection by creditors or contributories. See Buckley, 292. Table A. provides as follows: "The books of the company shall be kept at the registered office of the company, and, subject to any reasonable restrictions as to time and manner of inspecting the same, that may be imposed by the company in general meeting, shall be open to the inspection of the members during the hours of business." See another form, infra, Miscellaneous Clauses, Form 39; and see also Table A., Clause 78, infra, p. 247. Prec. I. balance-sheet. 126. At the ordinary meeting in every year the directors Annual stateshall lay before the company a statement of the income and ment and expenditure, and a balance-sheet, containing a summary of the property and liabilities of the company made up to a date not more than four months before the meeting, from the time when the last preceding statement and balance-sheet were made, or, in the case of the first statement and balance sheet, from the incorporation of the company. of directors. 127. Every such statement shall be accompanied by a report Annual report of the directors as to the state and condition of the company, and as to the amount which they recommend to be paid out of the profits by way of dividend or bonus to the members, and the amount (if any) which they propose to carry to the reserve fund, according to the provisions in that behalf hereinbefore contained; and the statement, report, and balance-sheet shall be signed by two directors, and countersigned by the secretary. By 24 & 25 Vict. c. 96, s. 84, directors keeping fraudulent accounts, or publishing fraudulent statements, are guilty of a misdemeanour. Prec. I. Copy to be sent to mem bers. Accounts to be audited annually. Appointment and remunera tion of auditors. Provision for 128. A printed copy of such balance-sheet and report shall, seven days previously to the meeting, be served on the holders of registered shares and registered stock in the manner in which notices are hereinafter directed to be served. AUDIT. 129. Once at least in every year, the accounts of the company shall be examined, and the correctness of the statement and balance-sheet ascertained by one or more auditor or auditors. See infra, Miscellaneous Clauses, Form 45, for clauses providing for audit committee in lieu of these clauses. 130. The first auditor or auditors shall be appointed by the directors; subsequent auditors shall be appointed by the company at the ordinary meeting in each year. The remuneration of the auditors shall be fixed by the company in general meeting. Any auditor quitting office shall be eligible for re-election. Sometimes the first auditors are appointed by the articles. 131. If one auditor only is appointed, all the provisions case of single herein contained relating to auditors shall apply to him. auditor. Who ineligible as auditors. Casual vacancy. Auditors to report on annual statement and balance-sheet. 132. The auditors may be members of the company, but no person shall be eligible as an auditor who is interested, otherwise than as a member of the company, in any transaction thereof, and no director or other officer shall be eligible during his continuance in office. 133. If any casual vacancy occurs in the office of auditor, the directors shall forthwith fill up the same. This is the usual clause. Compare with Table A. Clauses 90 and 91. 134. The auditors shall be supplied with copies of the statement of accounts and balance-sheet intended to be laid before the company in general meeting seven days at least before the meeting to which the same are to be submitted, and it shall be their duty to examine the same with the accounts and vouchers relating thereto, and to report to the company in general meeting thereon. 135. The auditors shall at all reasonable times have access to the books and accounts of the company, and they may in relation thereto examine the directors or other officers of the company. [135a. Every account of the directors, when audited and approved by a general meeting, shall be conclusive, except as regards any error discovered therein within three months next after the approval thereof. Whenever any such error is discovered within that period, the account shall forthwith be corrected and thenceforth shall be conclusive.] This clause is sometimes inserted. NOTICES. Prec. I. Inspection of books by auditors. When accounts to be deemed finally settled.. to be served on members. 136. A notice may be served by the company upon any How notices member whose registered place of address is in the United Kingdom, either personally or by sending it through the post in a pre-paid letter, addressed to such member at his registered place of address. Notices have to be given to members in the following cases: call, Clause 18; before forfeiture, Clause 33; after forfeiture, Clause 35 a; general meetings, Clause 64; dividends, Clause 121; accounts, Clause 128. The register of members, to be kept pursuant to Section 25 of the Act, is to contain (inter alia) the addresses of the members. How notices company. As to notices to the company, the Act provides : Section 62.-Any summons, notice, order, or other document, required to be given to to be served upon the company, may be served by leaving the same, or sending it through the post in a pre-paid letter, addressed to the company, at their registered office. Section 63.-Any document to be served by post on the company, shall be posted in such time as to admit of its being delivered in the due course of delivery, within the period (if any) prescribed for the service thereof; and in proving service of such document, it shall be sufficient to prove that such document was properly directed, and that it was put as a pre-paid letter into the Post-office. Section 64.-Any summons, notice, order, or proceeding, requiring authentication by the company, may be signed by any director, secretary, or other authorised officer of the company, and need not be under the common seal of the company, and the same may be in writing or in print, or partly in writing and partly in print. See also Section 41 of the Act. The above Sections 62-64, so far as they relate to notices, are sometimes inserted as clauses in the articles. Authentication of notices by company. 137. Each holder of registered shares or registered stock, Address for whose registered place of address is not in the United Kingdom, members Prec. I. resident abroad. Holder of share warrant not entitled to notice. When notice may be given by advertisement. How to be advertised. Notice to joint holders. shall, from time to time, notify in writing to the company some place in England to be called his address for service, and any notice may be served by the company upon such member by sending it through the post in a pre-paid letter addressed to him at his address for service. Until such notification shall have been given, the office shall be deemed to be the address for service of such member. It is generally deemed expedient to make special provision as to the service of notices on members resident abroad. According, however, to the opinion of Malins, V.-C., such members are not entitled to notice. "It seems to me that the Act has reference only to shareholders who can be reached by the ordinary English post." Union Hill Silver Co., 22 L. T. 400. See also Grant on Corporations, 156. 138. The holder of a share warrant shall not be entitled in respect thereof to notice of any general meeting of the company. The holder of a share warrant is generally deprived of the right to notice of general meetings. Sometimes he is permitted to appoint an address for service, but the objection is, that the company will have no means of ascertaining when the share warrant has been parted with, and may, unknowingly, continue to send notices to a person who has ceased to be a member. If the holder of a share warrant is to be entitled to notice, the usual plan is to provide that it shall be given by advertisement. In such case, the following clause will be inserted instead of the above : "Any notice required to be given by the company to the holder of share warrants, shall be given by advertising the same once in a London daily newspaper." The objection which prevents the general adoption of the plan is the publicity; companies do not like to publish notice of their private affairs. 139. Any notice required to be given by the company to the members, or any of them, and not expressly provided for by these presents, shall be sufficiently given if given by advertisement. 140. Any notice required to be, or which may be given by advertisement, shall be advertised once in two London daily newspapers. 141. All notices shall, with respect to any registered shares or registered stock, to which persons are jointly entitled, be given to whichever of such persons is named first in the register, and notice so given shall be sufficient notice to all the holders of such shares or stock. 142. Any notice sent by post shall be deemed to have been served at the time when the letter containing the same would be delivered in the ordinary course of post, and in proving such service it shall be sufficient to prove that the letter containing the notice was properly addressed and put into the postoffice. It is not necessary to follow literally the address on the register, provided that a substantially accurate designation of the place of abode is given. Liverpool, &c., Co. v. Houghton, 23 W. R. 93. [142a. Every person who, by operation of law, transfer, or other means whatsoever, shall become entitled to any share or stock, shall be bound by every notice in respect of such share or stock which, previously to his name and address being entered on the register, shall be duly given to the person from whom he derives his title to such share or stock.] The above clause is not uncommon, but it is not by any means essential, and may be omitted if brevity is desired. It does not appear in Table A., nor in the Companies Clauses Consolidation Act, 1845. [1426. Any notice or document delivered, or sent by post to or left at the registered address of any member, in pursuance of these presents, shall, notwithstanding such member be then deceased, and whether or not the company have notice of his decease, be deemed to have been duly served in respect of any registered shares or stock, whether held solely or jointly with other persons by such member, until some other person be registered in his stead as the holder or joint holder thereof, and such service shall for all purposes of these presents be deemed a sufficient service of such notice or document on his or her heirs, executors, or administrators, and all persons, if any, jointly interested with him or her in any such share or stock.] This clause is sometimes inserted, and is found useful. Prec. I. When notice by post deemed to be served. Transferees, &c., bound by prior notices. Notice valid though mem ber deceased. [143. The signature to any notice to be given by the com- How notice to pany may be written or printed.] The above is occasionally inserted. A person may sign by stamping a fac-simile of his autograph. Bennett v. Brumfit, L. R. 3 C. P. 28. be signed. 144. Where a given number of days' notice, or notice ex- How time to tending over any other period, is required to be given, the day be counted. |