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FORM XXIX.

ONE DIRECTOR NOT TO BE LIABLE FOR ANOTHER.

of directors.

2. No director or other officer of the company shall be liable Individual for the acts, receipts, neglects, or defaults of any other director responsibility or officer, or for joining in any receipt or other act for conformity, or for any loss or expense happening to the company through the insufficiency or deficiency of title to any property acquired by order of the directors for or on behalf of the company, or for the insufficiency or deficiency of any security in or upon which any of the monies of the company shall be invested, or for any loss or damage arising from the bankruptcy, insolvency, or tortious act of any person with whom any monies, securities, or effects shall be deposited, or for any other loss, damage, or misfortune whatever which shall happen in the execution of the duties of his respective office or in relation thereto, unless the same happen through his own wilful act or default.

The above clause is sometimes inserted. See Lindley, 616, as to liability of directors for acts of each other As to the right to contribution, see Lindley, 788, et seq.; and Ashurst v. Mason, 20 Eq. 225.

In the case last mentioned, shares of a company had (pursuant to an ultra vires resolution of the board) been purchased and transferred into the name of A., a director, in trust for the company. It was held that A. was entitled to contribution from the directors who concurred in the transaction for calls he had paid. See also Power v. Hoey, 19 W. R. 916; and Power v. O'Connor, ibid., 923.

FORM XXX.

REDEMPTION OF SHARES.

shares to be subject to

1. Every member entitled to guaranteed preference shares Guaranteed shall hold the same subject to redemption at par out of the profits of the company applicable for that purpose as herein- redemption. after provided.

2. The redemption of the said guaranteed preference shares How to be shall be effected by the operation of a redemption fund which effected. shall, &c., &c.

Ut supra, p. 260, Clause 3.

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Ut supra, p. 260, et seq., Clauses 4, 5, 6, 7, 8, 9, 10, mutatis mutandis.

7.

Redeemed share to be

come an ordinary share.

Directors may establish loan fund.

Holders of A.

tribute.

8.

9.

10. Every guaranteed preference share redeemed in manner aforesaid shall thenceforth be deemed to be an ordinary share, and may be disposed of by the directors as they think fit.

If desired, provision can be made for payment of a premium on redemption.

If the above clauses are inserted, due provision should be made in the dividend clause for carrying a share of the profits to the redemption fund. See supra, p. 256.

Redemption of paid-up shares out of profits is not open to objection as a reduction of capital.

FORM XXXI.

MEMBERS' LOAN FUND.

Power to raise a forced loan from the members is occasionally inserted in articles. It is valid and effectual. Peninsular Co. v. Fleming, 27 L. T. N. S. 93. It indirectly enables a company to increase and then to reduce its working capital without proceeding under the Act of 1867. Thus, suppose the shares to be 17., and that the holders are to be liable to contribute 107. per share to the loan fund. The directors will have power to call up the 107., or any part of it, as they think fit; and if subsequently it is deemed expedient to return the amount, the directors can do so, and when necessary call it up again. The liability of the members in the winding up will be limited to so much of the 17. as remains unpaid on the shares. They cannot be called on, in order to pay outside creditors and the expenses of the winding up, to contribute any part of the 107. Maxwell's Case, 20 Eq. 591.

1. The directors may, if they think fit, establish a loan fund, to be formed by contributions from the holders of A shares, not exceedingl. per share.

Of course these clauses can be made applicable to all members, or to the holders of a specified class of shares.

2. The holders of the A shares shall be liable to pay the said shares to cou- contributions rateably in proportion to the number of A shares held by them respectively, and the directors may make calls in respect of such contributions at such time as they think fit, provided that twenty-one days' notice at least be given of each

Calls.

call. Each holder of A shares shall pay the amount of every call so made in respect of the A shares held by him to the persons and at the times and places appointed by the directors.

Forms.

7. per share, No call to

exceed -l.

3. No such call as aforesaid shall exceed or be made within one month of a previous call. 4. Every such call shall be deemed to have been made at the When call to time when the resolution of the directors making the same was passed.

5. If any such call is not paid on or before the day appointed for payment thereof, the holder for the time being of the share in respect whereof the same was made, shall pay interest thereon at the rate of 10 per cent. per annum from the day appointed for the payment thereof to the time of actual payment.

6. The amount contributed to the loan fund in respect of each A share, shall be deemed to be a debt due from the company to the holder for the time being of the share, and repayable at such time, and carrying interest at such rate, as the directors shall think fit.

ex

be deemed made.

Interest on call not duly paid.

Contribution

to loan fund

to be debt duc

to member.

7. The directors may deal with the funds for the time being How funds to constituting the loan fund in such manner as they think pedient for the purposes of the company.

8. The directors may at their discretion repay to the holders of A shares pari passu all or any part of the principal monies owing to them in respect of such contributions as aforesaid, but such repayment shall not prejudice the right to make subsequent calls under Clause [2], so that the amount at any one time due for contributions shall not exceed A share.

FORM XXXII.

RESTRICTION ON VOTING.

-1. per

credit of loan fund to be dealt with.

Directors may repay contri

butions.

bers not entitled to

No member shall be entitled to vote at any general meeting When memunless all calls due from him shall have been paid; and no member shall be entitled to vote, in respect of any share that vote. he has acquired by transfer, at any meeting held after the expiration of four months from the incorporation of the company, unless he shall have been possessed of the share in respect of which he claims to vote for at least three months previously to the time of holding the meeting at which he proposes to vote; but this regulation shall not affect shares

Forms.

Directors may appoint general

manager.

Appointment

of first manager.

His salary.

acquired by marriage, or under a testamentary disposition, or by succession to an intestate estate.

See supra, p. 169, as to object of such a clause.

FORM XXXIII.

GENERAL MANAGER.

The directors may, from time to time, appoint a general manager of the business of the company, and may remove and discharge any such person and appoint a substitute, and the directors shall take such security (if any) for the good conduct and satisfactory discharge of the duties of such general manager as they shall in their discretion think sufficient.

See Evans v. Coventry, 8 De G. M. & G. 835; 25 L. J. N. S. Ch. 491., as to taking security.

FORM XXXIV.

MANAGER.

1. The said shall be the first manager of the company, and shall not be removable from office otherwise than by his own resignation or by special resolution, and shall, while holding that office, devote the whole of his time and attention to the business of the company, and shall exercise and perform the functions and duties prescribed by the directors. 2. The salary of the said as such manager shall be at the rate ofl. per annum, payable monthly, on the first day of every month; he shall also, while holding such office, be entitled to a commission equal to 5 per cent. on the net profits of the company in each year in which the same shall be more than sufficient to pay a dividend at the rate of cent. on the paid-up capital of the company.

per

3. The declaration of the directors, as to the amount of the net profits of the company in each year, shall be conclusive as against the said

FORM XXXV.

MANAGING DIRECTOR.

1. The first managing director of the company shall be A., of, who shall hold that office until the ordinary meeting at a salary of —l. per annum, payable at

First

managing director.

in the year

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such times as may be agreed upon between him and the directors.

Forms.

2. The said A., during his term of such office, shall devote the His duties. whole of his time and attention to the business of the company, and shall not directly or indirectly engage or be concerned in any other trade or business without the consent of the directors.

3. Upon any vacancy occurring in the said office, the Vacancy. directors may either fill up the office by the appointment of some one of their body thereto, or may at their discretion discontinue the same.

4. Subject to the provision in Clause 1 hereof contained as to the remuneration of the said A., the remuneration of the managing director (if any), for the time being, shall be fixed by the directors, and may be, by way of salary or commission, or participation in the profits, or by any or all of those modes.

Remunera

tion of future managing director."

5. The directors may, from time to time, entrust (see supra, Further prop. 180).

visions.

FORM XXXVI.
TRUSTEES.

The following clauses are occasionally inserted, but Subsection 7, supra, p. 186, is generally deemed sufficient.

1. The company may, from time to time, in general meeting, Power to appoint appoint any person or persons, whether members of the company trustees. or not, to be trustee or trustees of all or any part of the property of the company, and may, from time to time, in general meeting, remove any such trustee or trustees from office, and appoint a successor or successors.

executed.

2. On the appointment of any trustee, the directors shall Declaration of cause a deed or instrument to be executed by him, declaring trust to be the trusts upon which he holds, or will hold, any property of the company vested in him; and the directors shall not permit any of the property of the company to be vested in any such trustee until he shall have executed such declaration of trust as aforesaid.

trustee.

3. On the appointment of any trustee or trustees, and upon As to vesting the execution by him of the declaration of trust aforesaid, the property in directors shall cause such of the property of the company as shall be directed or intended by the general meeting appoint

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