Quorum.

regulations of the company to vote, as may be present in person or by proxy (in cases where by the regulations of the company proxies are allowed), at any general meeting of which notice specifying the intention to propose such resolution has been duly given, and such resolution has been confirmed by a majority of such members for the time being entitled according to the regulations of the company to vote, as may be present in person or by proxy at a subsequent general meeting, of which notice has been duly given, and held at an interval of not less than fourteen days, nor more than one month from the date of the meeting at which such resolution was first passed: at any meeting mentioned in this section, unless a poll is demanded by at least five members, a declaration of the chairman that the resolution has been carried shall be deemed conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favour of or against the same: notice of any meeting shall, for the purposes of this section, be deemed to be duly given and the meeting duly held, whenever such notice is given and meeting held in manner prescribed by the regulations of the company in computing the majority under this section, when a poll is demanded, reference shall be had to the number of votes to which each member is entitled by the regulations of the company."

It seems that where the articles require a specific quorum to be present at a general meeting a special resolution cannot be passed unless at both the meetings such a quorum be present. See Cambrian, &c., Co., 23 W. R. 405; 31 L. T. N. S. 773. It is to be observed that the section provides that a meeting shall for the purposes of the section be deemed to be "duly held," if held in manner prescribed by the regulations of the company, and it would certainly seem that these words. render it necessary to comply with any provisions as to quorum in the articles.

If this be the true construction of the section considerable difficulty may arise where the existing members of the company if all assembled would not constitute a quorum for an extraordinary general meeting. This is not an uncommon occurrence, and in such case it follows that no special or extraordinary resolution, even to wind up, can be passed until the provisions of the articles can be complied with.

members.

Of course a resolution which is passed by the votes of mem- Disqualified bers disqualified by the regulations from voting, e.g., by reason of calls unpaid, is invalid. Cambrian, &c., Co., ubi supra. As to notices convening meetings to pass resolutions, Notices of meetings. whether special, extraordinary, or otherwise, see infra, p. 305,

et seq.

As to notices to be given to registrar of joint stock com- Notices to panies upon passing of special resolutions, see infra, p. 314, registrar. et seq.

2. As to an extraordinary resolution: Section 129 of the

Act of 1862 provides that:

resolution.

"For the purposes of this Act any resolution shall be What is an deemed to be extraordinary which is passed in such manner as extraordinary would, if it had been confirmed by a subsequent meeting, have constituted a special resolution as hereinbefore defined." See supra, p. 289.

U

Section 50 of the Act provides that :

"Subject to the provisions of this Act, and to the conditions contained in the memorandum of association, any company formed under this Act may, in general meeting from time to time, by passing a special resolution in manner hereinafter provided, [see supra, p. 289], alter all or any of the regulations of the company contained in the articles of association or in the table marked A. in the first Schedule, where such table is applicable to the company, or make new regulations to the exclusion of or in addition to all or any of the regulations of the company, and any regulations so made by special resolution shall be deemed to be regulations of the company of the same validity as if they had been originally contained in the articles of association, and shall be subject in like manner to be altered or modified by any subsequent special resolution."

A company cannot by special resolution authorise or ratify an act ultra vires the company. Ashbury, &c., Co. v. Riche, L. R. 7 H. L. 653; Hutton v. Scarborough Cliff Hotel Co., 13 W. R. 1059; Hope v. International Financial Society, W. N. 1876, 257. See further, supra, p. 141, et seq.

FORM I.

That the articles of association be altered in manner following:

(a.) Article 5 shall be cancelled.

(b.) In article 7 the word "four" shall be substituted for

the word "seven."

(c.) The following article shall be substituted for Article 20, namely "The company may," &c.

(d.) The following article shall be inserted after article 24, namely, 24a, "The directors may," &c.

If a very large number of clauses are cancelled and new ones inserted, it is sometimes provided that: "The articles shall, subject to the preceding alterations, be renumbered throughout and the subsections relettered so far as necessary and all references duly corrected."

FORM II.

That the regulations contained in the table marked A. in the schedule to the Companies Act, 1862, shall no longer apply to the company, and that the following shall henceforth be the regulations of the company.

1. In the interpretation, &c.

[Here will follow the new articles.]

FORM III.

That the existing articles of association be rescinded, and that the following regulations be substituted therefor:

1. In the interpretation, &c.

[Here will follow the new articles.]

It is by no means uncommon to substitute entirely new articles of association, especially when a company limited by shares, having been registered without articles, is governed by Table A. Care, however, must be taken not to insert any clause not warranted by the memorandum and original regulations, e.g., if there was originally no power to create preference shares, the power cannot be taken by special resolution; supra, p. 266.

RESOLUTIONS TO INCREASE CAPITAL.

The power to increase the capital is generally made exerciseable by the company in general meeting, i.c., by a simple resolution, or by special or extraordinary resolution, or by the company simply. In the last case the directors can generally exercise the power. See supra,

p. 265.

See further as to increase of capital and creation of preference shares, supra, pp. 161 and 265, et seq.

Whether the capital be increased by resolution of the company, or by resolution of the directors, notice to the registrar must be given within fifteen days from the date of the passing of the resolution, or in default the company and every director and manager will be liable to a penalty of 51. per day. See further, infra, p. 314, Section 34 of the Act.

Forms.

That the capital of the company be increased to 50,0097. by the creation of 2,000 new shares of 107. each.

FORM V.

That the capital of the company be increased to 25,000l. by the creation of 2,000 new shares of 57. each, to be called preference shares, and to confer on the holders thereof the right to a cumulative preferential dividend at the rate of 6 per cent. per annum on the amount for the time being paid up on such shares [which dividend shall be payable half-yearly on the day of —— and day of].

FORM VI.

1. That the capital be increased to 30,000l. by the creation of 10,000 new shares of 17. each.

2. That the new shares be called preference shares, and that the holders thereof be entitled to a preferential dividend, at the rate of 57. per cent. per annum, payable out of the profits of each year, without any right in case of deficiency to resort to the profits of subsequent years.

The following may be used instead of the above :

"That the new shares shall be called preference shares, and that the holders thereof shall be entitled to be paid out of the profit of each year a preferential dividend for such year at the rate of 51. per cent." It is sometimes preferred because it does not expressly call attention to the contingency of the profits being deficient. In either case the dividend will be non-cumulative. See supra, p. 252, and p. 253.

3. That in the event of the company being wound up, the holders of the said preference shares shall be entitled to have the surplus assets of the company applied in the first place in repaying to them the amount paid up on the preference shares held by them respectively, but that the residue of such surplus assets shall belong to and be divided among the other members of the company.

FORM VII.

1. That the capital of the company be increased to 100,000l. by the creation of 3,000 new shares of 101. each.