In a company unlimited, and having a capital divided into shares, each subscriber must take one share at least, and write opposite to his name in the memorandum the number of shares he takes, § 14. requires to be scribed, and pany limited alter memor ciation under Acts, 1862, 1867, and 1877. The memorandum of association requires the same Memorandum stamp as if it were a deed (i.e., a 10s. stamp), and must be stamped, subsigned by each subscriber in the presence of at least one attested. witness, who attests it, § 11. Any company limited by Power of comshares, if authorised to do so by its regulations as originally by shares to framed, or as altered by special resolution, may so far andum of assomodify the conditions in its memorandum of association, as Companies —(1) to increase its capital by the issue of new shares of such amount as it thinks expedient; (2) to consolidate and divide its capital into shares of larger amount than its existing shares; (3) to convert its paid-up shares into stock, Companies Act, 1862, § 12; (4) to reduce its capital, whether paid-up or not, Companies Act, 1867, § 9, and Companies Act, 1877, § 3; or (5) to divide its capital, or any part thereof, into shares of smaller amount, Companies Act, 1867, § 21. Any company under the Companies Act, 1862, by special Power of comresolution of the company and with the written approval change name. of the Board of Trade, may change its name without affecting any rights or obligations of the company, § 13. The memorandum of association fixes the objects of the company; and any contract made by the directors about Any act outa matter outside the memorandum is ultra vires both of memorandum the directors and the company, and is not binding on the of the directors company, nor can it be ratified by the shareholders so as and company. to making it binding on the company, Ashbury Carriage Company, L.R., 9 Ex. 224; 7 L.R., H.L. 653. But if Ambiguous the memorandum is ambiguous, it can be construed by can be conaid of the articles of association, Anderson, 7 L.R., C.D. articles. 99. Any part of the articles of association inconsistent Articles, so far with the memorandum is invalid, Guinness, 22 L.R., with memoranC.D. 349. panies to side of the is ultra rires memorandum strued by as inconsistent Articles of association. The articles of association prescribe such regulations for the company as the subscribers to the memorandum deem expedient. They generally deal with shares and calls on shares; the transfer and forfeiture of shares; the general meetings of the company; the votes of members; the election, the powers, the qualification, the rotation, and the proceedings of directors; dividends, accounts, audits, and notices. In the case of a company, whether limited by guarantee or unlimited, which has a capital divided into shares, the articles must state the amount of capital with which the company proposes to be registered; and in the case of a company, whether limited by guarantee or unlimited, which has not a capital divided into shares, they must state the number of members with which the company proposes to be registered, Companies Act, 1862, § 14. A company limited by shares does not require, in addition addition to the memorandum, to have articles of association. If the memorandum of association of a company, limited by shares, is not accompanied by articles of association, the regulations contained in the table marked A in the first schedule to the Act are deemed to be the regulations of the company. Articles for a company limited by shares are, however, required when its regulations are different from those contained in the table; but even when there are articles for such a company, the regulations contained in the table, in so far as the articles do not exclude or modify them, are deemed to be the regulations of the company, § 15. All articles of association must-(1) be expressed in separate paragraphs, numbered arithmetically; (2) be signed, in the presence of at least one attesting witness, by the subscribers to the members of association; (3) bear the same stamp as if they were contained in a deed (i.e., a 10s. stamp); and (4) they may adopt all or any of the provisions contained in the table marked A in the first schedule to the Act, SS 14, 16. articles of asso At a general meeting, and by special resolution, any Alterations on company may, from time to time, alter all or any of the ciation. regulations of the company contained in the articles of association, or in the table marked A in the first schedule of the Act, 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, §§ 50, 51. memorandum association. incorporation. tified registra For the incorporation of the company, it is necessary to Registration of register the memorandum of association. In the case of a and articles of company limited by guarantee, or unlimited, articles of association must be registered, along with the memorandum; but in the case of a company limited by shares the registration of the memorandum is sufficient, if the regulations of the company are to be those contained in the table marked A of the Act, in which case no separate articles are necessary. On registration of the memorandum Certificate of of association and of the articles of association, in cases where the latter are required, the registrar certifies that the company is incorporated, and, in the case of a limited company, that the company is limited. Thereupon the sub- Effect of cerscribers of the memorandum of association, along with tion. such other persons as may from time to time become members of the company, are a body corporate by the name contained in the memorandum of association, capable forthwith of exercising all the functions of an incorporated company, and having perpetual succession and a common seal, with power to hold lands, but with liability on the part of the members to contribute to the assets of the company in the event of it being wound up, § 18. No Prohibition company, however, formed for the purpose of promoting companies art, science, religion, charity, or any other like object, not involving the acquisition of gain by the company or by the individual members of it, can, without the sanction of the Board of Trade, hold more than two acres of land, § 21. against certain holding land. Prospectus, &c., to specify dates and names of contract made &c. Before proceeding further it may be well to notice the subject of a prospectus of a company, and notice inviting parties to any persons to subscribe for shares in a joint-stock company. prior to issue Every prospectus and every such notice must specify―(1) of prospectus, the dates, and (2) the names of the parties to any contract entered into by the company, or by the promoters, directors, or trustees thereof, before the issue of the prospectus or notice, whether subject to adoption by the directors or the company, or otherwise. Every prospectus or notice not giving this information is deemed fraudulent on the part of the promoters, directors, and officers of the company knowingly using the same as regards any person taking shares in the company on the faith of such prospectus, unless he has notice of such contract, Companies Act, 1867, § 38. See Twycross, 2 L.R., C.P. Div. 469. Register of members. II. THE REGISTER OF MEMBERS; THE TRANSFER OF SHARES In the After registration, the Act requires every company to keep, under a penalty, a register of its members. register the following particulars are entered: (1.) The names and addresses, and the occupations, if any, of the members of the company, with the addition, in the case of a company having a capital divided into shares, of a statement of the shares held by each member, distinguishing each share by its number: And of the amount paid or agreed to be considered as paid on the shares of each member: (2.) The date at which the name of any person was entered in the register as a member : (3.) The date at which any person ceased to be a member, § 25. Who are mem- The names of the subscribers of the memorandum of assobers of the company? ciation are entered as members on the register, and every other person who has agreed to become a member, and whose name is entered on the register, is deemed to be a Rectification member of the company, § 23. The register is only of register. prima facie, not conclusive, evidence of membership; and if a name is omitted from it, or is wrongly added to it, the aggrieved person may apply to the Court for rectification, whether the company is in liquidation or not, §§ 35, 37. See Macdonald, 6 R. 621; Myles, 6 R. 718; Howe, 6 R. 1194; Stenhouse, 7 R. 102. When a shareholder has been induced by fraud on the part of the directors or officers of a company to take shares, and has been registered as the holder thereof, he can get his name removed from the register; but he must take legal steps to rescind the contract before the declared insolvency or the commencement of the liquidation of the company, Tennent, 6 R. (H.L.) 69. The common mode in which Application persons agree to become members of a company is by of shares. signing an application for shares, making, it may be, a deposit, and transmitting the application to the secretary The offer to take shares, or the allot and allotment of the company. ment of them, may contain a condition, the implement of which is necessary to make one a member of the company. Thus, a letter of allotment by the directors contained a provision that, in the event of certain mines not being bought, the money paid by applicants for shares would be returned. The mines were not purchased, and the money was accordingly returned. Thereafter the official liquidator of the company tried to make those to whom the money was returned liable as contributories; but the Court held that the letter of allotment contained a suspensive condition, which did not render the allottees shareholders until it was purified, Liquidator of the Consolidated Copper Co. of Canada, 5 R. 393. In connection Manner in with letters of allotment, the provision of section 25 of the are to be issued Companies Act, 1867, is important. The section provides that "Every share in any company shall be deemed and taken to have been issued and to be held subject to the payment of the whole amount thereof in cash, unless the same shall have been otherwise determined by a contract which shares and held. |