Prec. I. Healey, 278.

Differences to be referred.

Costs of arbitration.

Submission may be made order of Court.

Provision for sale under Section 161 of the Act.

of service and the day upon which such notice will expire, shall not be included in such number of days or other period.

ARBITRATION.

(See further as to arbitration, supra, p. 33).

145. Whenever any difference arises between the company, on the one hand, and any of the members, their executors, administrators, or assigns, on the other hand, touching the true intent or construction, or the incidents or consequences of these presents, or of the statutes, or touching anything then or thereafter done, executed, omitted, or suffered in pursuance of these presents, or of the statutes, or touching any breach, or alleged breach of these presents, or any claim on account of any such breach or alleged breach, or otherwise relating to the premises, or to these presents, or to the statutes, or to any of the affairs of the company, every such difference shall be referred to the decision of an arbitrator, to be appointed by the parties in difference, or if they cannot agree upon a single arbitrator, to the decision of two arbitrators, of whom one shall be appointed by each of the parties in difference, or an umpire to be appointed by the two arbitrators.

146. The costs of, and incident to, any such reference and award, shall be in the discretion of the arbitrator, arbitrators, or umpire respectively, who may determine the amount thereof, or direct the same to be taxed as between solicitor and client, or otherwise, and may award by whom, and to whom, and in what manner the same shall be borne and paid.

147. The submission to arbitration shall be subject to the provisions of the Common Law Procedure Act, 1854, or any then subsisting statutory modification thereof, and shall be made a rule or order of Her Majesty's High Court of Justice upon the application of either party, and such party may instruct counsel to consent thereto for the other parties.

As to arbitration, see further, supra, p. 33. Daniel, Ch. Pr. 1902, et seq. Seton on Decrees, 399, et seq.

SALE IN WINDING UP.

148. If at any time the liquidators of the company shall, pursuant to Section 161 of the Companies Act, 1862, and with the sanction of such special resolution as therein mentioned, sell

all or any part of the property of this company to some other company in consideration of shares or of stock in that company to be issued to the said liquidators for distribution among the members, or to be issued directly to the members, or shall enter into any other such arrangement as is contemplated by the same Section, such sale or arrangement shall be binding upon all the members of this company, and the said liquidators may carry the same into effect accordingly : Provided always that if any member of this company, who has not voted in favour of such special resolution at either of the 'meetings held for passing the same, expresses his dissent therefrom in writing, addressed to the said liquidators, and left at the office not later than seven days after the date of the meeting at which such special resolution was passed, the said liquidators shall, at the request of such dissentient member, sell the shares, stock, or other like interest to which he would otherwise have become entitled, and shall pay to him the proceeds of such sale. Such last mentioned sale may be made in such manner as the liquidators shall think fit.

The above clause, or one of a similar character, is not uncommonly used now, and enables a company much more effectually to take advantage of Section 161 of the Act, for the purpose of effecting a reconstruction or amalgamation. According to the Act, dissenting members are entitled to be paid the value of their interests in the selling company as ascertained, in case of dispute, by arbitration. Under the above clause they are only entitled to the selling value of the shares in the purchasing company which would otherwise have been allotted to them. There is no injustice in this, for it may reasonably be assumed that a sale which is sanctioned by special resolution is fair, and at the same time it facilitates matters considerably. In some cases the clause is framed with a view to binding every member to take the shares in the puchasing company agreed to be allotted to him; but that form is objectionable, for the sale may be in consideration of shares only partly paid up, and it is unreasonable that a dissenting member should be obliged to undertake further liabilities. See further as to Reconstruction and Amalgamation, infra.

Names, addresses, and descriptions of subscribers:

See supra, pp. 139, 97. The number of shares taken is not to be given here.

It is not necessary that all the subscribers should execute in the presence of the same witness. See supra, p. 97.

Prec. I.

PRECEDENT II.

Prec. II. ARTICLES of ASSOCIATION of a COMPANY LIMITED by SHARES.

Adoption of preliminary agreement.

Allotment of shares.

When direc

tors may decline to register transfer.

Fee on transfer.

Lien of com

pany on

The Companies Acts, 1862 and 1867.

Company Limited by Shares.

Articles of Association of The

Company, Limited.

In a good many cases, articles of association are framed as in this precedent, viz., by the adoption of Table A., subject to modifications. See supra, p. 140.

1. The company shall forthwith adopt an agreement dated, &c., and made between of the one part, and

behalf of the company, of the other part.

See supra, p. 143.

on

2. The directors may allot the shares of the company on such terms and conditions as they think fit, subject, nevertheless, to the said agreement.

3. Article 10 of Table A. shall not apply.

4. The directors may decline to register any transfer of shares upon which the company has a lien, and in case of shares not fully paid up may refuse to register a transfer to a transferee without assigning any reason therefor.

See supra, p. 152.

5. A fee not exceeding 2s. 6d. may be charged for each transfer.

6. The company shall have a first and paramount lien upon shares or stock. all the registered shares or registered stock of each member for his debts, &c. [Ut supra, p. 159, Clause 40.]

How lien to be enforced.

How proceeds to be applied. Evidence.

Title of purchaser.

Power to

7. For the purpose of enforcing such lien the directors may sell, &c. [Ut supra, p. 159, Clause 41.]

8. The net proceeds of any such sale, &c. [Ut supra, p. 159, Clause 42.]

9. A certificate in writing under the hands, &c. [Ut supra, p. 159, Clause 43.]

10. Upon any such sale the directors or any two, &c. [Ut supra, p. 160, Clause 44.]

11. The company in general meeting may from time to

time increase its capital by the creation of new shares of such Prec. II. amount as may be deemed expedient.

increase the

12. The new shares shall be issued upon such terms and capital. conditions, &c. [Ut supra, p. 161, Clause 49.]

13. The company may from time to time reduce its capital, &c. [Ut supra, p. 162, Clause 52.]

14. The directors may from time to time borrow at their discretion, from the directors, members, or other persons, any sum or sums of money for the purpose of the company, and may raise or secure the repayment, &c. [Ut supra, p. 163, Clause 55.]

Power to create preference shares,

&c.

Power to reduce capital, &c.

Power to

borrow.

general meet

15. The first general meeting shall be held within four When first months after the incorporation of the company, and Article 29 ing to be held. of Table A. shall be modified accordingly.

See supra, p. 164.

16. The quorum for a general meeting shall be five Quorum. members.

17. The number of the directors shall not be less than nor more than

18. The following shall be the first directors, namely,

A. B., of
&c. &c.

and they shall hold office until the ordinary meeting in the

year

Number of directors.

First directors.

19. The directors for the time being shall have power, &c. Additional [Ut supra, p. 173, Clause 88.]

directors may be appointed.

of directors.

and not

Rotation of directors.

20. Clauses 52, 53, and 54 of Table A. shall not apply. 21. There shall be paid to the directors by way of remune- Remuneration ration -7. per annum, which sum shall be divided among them in such proportions and manner as they may determine. 22. At the ordinary meeting in the year before, the whole of the directors shall retire from office. 23. Any resolution passed by the directors, notice whereof Effect of reshall be given to the members in the manner in which notices are required to be given by the regulations of the company, directors. &c. [Ut supra, p. 172, Clause 85.]

24. Mr.

solution in writing of

shall be the first secretary of the company. Secretary. 25. The directors may from time to time pay to the members Interim on account, &c. [Ut supra, p. 191, Clause 117.]

divide

Prec. II.

Accounts.

Account books.

Inspection.

Annual state

ment and balance-sheet.

Report.

As to vacancy in office of auditor.

Address for service. Table A. to apply.

26. The directors shall cause true accounts, &c. [Ut supra, p. 192, Clause 123.]

The provisions in Table A. as to accounts are very often modified.

27. The books of account shall be kept, &c. [Ut supra, p. 192, Clause 124.]

28. The directors, &c. [Ut supra, p. 192, Clause 125.] 29. At the ordinary meeting in every year the directors shall lay before, &c. [Ut supra, p. 193, Clause 126.]

30. Every such statement, &c. [Ut supra, p. 193, Clause 127.]

31. Articles 78, 80, and 81 of Table A. shall not apply. 32. If any casual vacancy occurs in the office of auditor the directors may fill it up.

33. Articles 90, 91, and 94 of Table A. shall not apply.

34. Every member whose registered place of address is not in the United Kingdom, &c. [Ut supra, p. 195, Clause 137.] 35. Subject to the provisions hereof the regulations contained in the table marked A. in the first schedule to the Companies Act, 1862 (herein before referred to as Table A.) shall apply to the company.

This clause is commonly inserted by way of reminder, but it is not necessary. See Section 15 of the Act, supra, p. 139.

In addition to the above clause it may be deemed desirable to insert clauses as to arbitration, supra, p. 198; sale in winding up, supra, p. 198; surrender of shares, supra, p. 162; division of original capital into preference and deferred shares, supra, p. 146, and infra, p. 253 ; enabling directors to contract with the company, supra, p. 177, note to Clause 92, subsection (e); issue of share warrants, supra, p. 155, &c., &c.

NAMES, ADDRESSES AND DESCRIPTIONS OF SUBSCRIBERS. [Supra, p. 139].