Form 116. SUBDIVISION OF SHARES. Sections 21 and 22 of the Act of 1867 provide as follows: Any company limited by shares, may by special resolution, so far modify the conditions contained in its memorandum of association, if authorised so to do by its regulations as originally framed, or as altered by special resolution, as, by subdivision of its existing shares or any of them, to divide its capital, or any part thereof, into shares of smaller amount than is fixed by its memorandum of association. Provided that in the subdivision of the existing shares the proportion between the amount which is paid and the amount (if any,) which is unpaid on each share of reduced amount shall be the same as it was in the case of the existing share or shares from which the share of reduced amount is derived. Section 22 provides that: The statement of the number and amount of the shares into which the capital of the company is divided, contained in every copy of the memorandum of association issued after the passing of any such special resolution, shall be in accordance with such resolution; and any company which makes default in complying with the provisions of this section shall incur a penalty not exceeding 17. for each copy in respect of which such default is made, and every director and manager of the company who knowingly or wilfully authorises or permits such default shall incur the like penalty. Before this enactment it was illegal to subdivide shares. Holmes' Case, 2 Ch. 714; Fielding and Remington's Case, Ibid. See also Sewell's Case, 3 Ch. 131. For clause to be inserted in articles giving the requisite power, see supra, p. 111. The power is to be exercised by special resolution; hence if the articles do not contain the necessary authority two special resolutions are necessary, as in the case of a reduction of capital. See infra, note to Form 180. Notice of a special resolution subdividing the shares must be given to the Registrar of Joint-Stock Companies. See infra, p. 209. Form 117. Subdivision. That each of the existing 101. shares be divided into two 51. shares, upon each of which the sum of 47. shall be credited as paid up. Form 118. That each of the existing 507. shares be divided into five fully paid up 101. shares. Form 119. That each of the existing shares of the company be divided into two shares of 51. each, one of which shall be called a preference share, and the other an ordinary share. That the holders of the said preference shares shall be entitled to be paid out of the profits of each year a preferential dividend at the rate of 5 per cent. for such year, and that the surplus profits of each year shall be applied in payment of dividends on the said ordinary shares. The above resolutions would not seem to offend against the principles on which Hutton v. Scarborough Cliff Hotel Co. was decided. See supra, p. 189. It would not seem to be an alteration of the constitution of the company, or a fraud on the minority, or otherwise ultra vires the company. However, the point remains to be decided. The Anglo-American Telegraphic Company, Limited, passed special resolutions, in 1876. for the division of its capital (stock) into preferred and ordinary stock; but the division was not compulsory: the resolution merely Form 119. authorised the directors to receive the surrender of his stock from any member willing to surrender, and to issue to him preferred and ordinary stock in equal moieties to same nominal amount. REDUCTION OF CAPITAL. See further, infra, notes to Form 180. The following are examples of resolutions for reduction : That the capital of the company be reduced from 100,000l., divided Form 120. into 10,000 shares of 107. each, to 50,000l., divided into 10,000 shares Reduction of of 77. 10s. each, and that such reduction be effected by reducing the liability. liability on each share to the extent of 27. 10s. That the capital of the company be reduced from 50,000l., divided Form 121. into 5000 shares of 107. each, to 30,0007. divided into 5000 shares Return of of 31. each, and that such reduction be effected by returning to the capital. holders of the 4200 shares that have been issued paid up capital to the extent of 21. per share, and by reducing the nominal amount of all the shares from 57, to 31. That the capital of the company be reduced from 500,000l., divided Form 122. into 500,000 shares of 17. each, to 125,000l. divided into 500,000 Cancelling lost shares of 5s. each, and that such reduction be effected by cancelling capital. capital which has been lost, or is unrepresented by available assets, to the extent of 15s. per share upon each of the 253,727 shares which have been issued, and are now outstanding, and by reducing the nominal amount of all the shares in the company's capital from 17. to 58. per share. Cancelling lost That the capital of the company be reduced from 105,000l. to Form 123. 78,7507. in manner following: (a). By cancelling paid up capital which has been lost or is unrepresented by available assets to the extent of 25s. capital. on each of the 5,552 preference shares, and on each of the 4,448 ordinary shares which have been issued, and to the extent of 5s. on each of the 3,498 guaranteed 57. per cent. preference shares which have been issued, and accordingly reducing the nominal amount of each of the said preference shares and ordinary shares to 37. 15s., and of each of the said guaranteed 5 per cent. preference shares to 15s. ; (b). By reducing Form 123. the nominal amount of the unissued preference shares and ordinary shares from 57. to 37. 15s., and by reducing the nominal amount of the unissued guaranteed 5 per cent. preference shares from 17. to 15s. Form 124. Change of name. CHANGE OF NAME. That the name of the company be changed to the Company, As to change of name, see s. 13 of the Act of 1862. The course is to pass a special resolution as above and then apply to the Board of Trade for liberty to make the change. Liberty is readily granted. The change is not complete until the new certificate of incorporation for which the section provides is issued. Shackleford, Ford & Co. v. Dangerfield, L. R. 3 C. P. 407. See supra, p. 48, as to a mode of change available in some cases. Form 125. Upon whose request warrant to be issued. Regulations as to request. Certificates to be surrendered. Resolution declaring the conditions on which share warrants will be issued. The following are conditions suitable to be made by the directors under Clause 32, supra, p. 106. If the words within brackets in that clause are not struck out the conditions must be submitted to the company in general meeting for its approval. That the following conditions as to the issue of share warrants be made pursuant to Clause of the articles of association of the company. 1. No share warrant shall be issued except upon a request in writing by the person for the time being upon the register of members as the holder of the share or stock in respect of which the share warrant is to be issued. For form of share warrant, see infra, Certificates. There can be no doubt that if the company issue a share warrant to a purchaser not entitled, it will be estopped from denying the right of any purchaser from him. See further, introductory notes to "Certificates." The utmost care ought therefore to be used. 2. The request shall be in such form, and authenticated by such statutory declaration or other evidence as to the identity of the person making the same, and of his right or title to the share or stock, as the directors shall from time to time require, and shall be lodged at the office of the company. 3. Before the issue of a share warrant the certificate (if any) then outstanding in respect of the shares or stock intended to be included in it shall be delivered up to the directors unless they dispense with this condition. If the certificate is left outstanding it will be more or less a risk of the company and the directors may reasonably require an indemnity. 4. Any person applying to have a share warrant issued shall at the Form 125. time of application pay to the directors the stamp duty payable in Stamp duty. respect thereof, and also such fee, not exceeding 1s., for each share warrant as the directors shall from time to time fix. By virtue of the Companies Act, 1867, s. 33, " There shall be charged on every share warrant a stamp duty of an amount equal to three times the amount of the ad valorem stamp duty which would be chargeable on a deed transferring the share or shares of stock specified in the warrant, if the consideration for the transfer were the nominal value of such share or shares or stock." By 33 & 34 Vict. c. 97, s. 127 :-" If a share warrant is issued without being duly stamped, the company issuing the same, and also every person who at the time when it is issued is the managing director, or secretary, or other principal officer of the company, shall forfeit the sum of 501." 5. If any share warrant or coupon be worn out or defaced, the As to worn or directors will, upon the surrender thereof for cancellation, issue a new warrants. one in its stead. defaced warrant. 6. If any share warrant or coupon be lost or destroyed, the directors As to lost or will, upon the loss or destruction being established to their satisfaction, destroyed and upon such indemnity being given to the company as they shall think adequate, issue another share warrant or coupon in lieu thereof. 7. In every case provided for by conditions 5 and 6 a fee of 2s. 6d., Fee on issue exclusive of all expenses attending the investigation of evidence of loss of new or destruction, and of an indemnity to the company, shall be paid to the company by the person availing himself of those conditions. warrant. of warrant may vote. 8. No person shall as bearer of a share warrant be entitled to attend, on what conor vote, or exercise in respect thereof any of the rights of a member, at ditions holder any general meeting of the company, or sign any requisition for or aid in calling any general meeting, unless three days at least before the day appointed for the meeting, in the first case, and unless before the requisition is left at the office, in the second case, he shall have deposited the share warrant at the office, or such other place as the directors appoint, together with a statement in writing of his name and address, and unless the share warrant shall remain so deposited until after the general meeting, or any adjournment thereof shall have been held. The names of more than one as joint holders of a share warrant shall not be received. This and the following clause are found to work well. They prevent personation, and are convenient both to the holders of share warrants and to the company. The certificate requires no stamp. 9. There shall be delivered to the person so depositing a share Certificate of warrant a certificate stating his name and address, and the number of deposit. shares or the amount of stock, represented by the share warrant so deposited by him, and such certificate shall entitle him to attend and vote at a general meeting in the same way as if he were a registered member of the company in respect of the shares or stock specified in the said certificate. Upon delivering up of the said certificate to the company Form 125. the share warrant in respect whereof it shall have been given, shall be When warrant to be produced. Surrender of warrants. This is to certify that A. B., of, has, in accordance with the regulations of the company, deposited the undermentioned share warrants, in respect of which he is entitled to attend the general meeting of the company, to be held at Dated, &c. on the Particulars of share warrants deposited. day of Secretary. 10. No person as bearer of any warrant shall be entitled to exercise any of the rights of a member (save as hereinbefore expressly provided in respect of general meetings), without producing such warrant and stating his name and address, and (if and when the directors so require) permitting an indorsement to be made thereon of the fact, date, purpose, and consequence of its production. The above clause is occasionally used. 11. If the bearer of a share warrant shall surrender it to be cancelled, and shall therewith lodge at the office a declaration in writing, signed by him, in such form, and authenticated in such manner as the directors require, requesting to be registered as a member in respect of the shares or stock specified in the said share warrant, and stating in such declaration his name, address, and occupation, he shall be entitled to have his name entered as a member in the register of members of the company in respect of the shares or stock specified in the share warrant so surrendered. Section 29 of the Act of 1867 provides that "The bearer of a share warrant shall, subject to the regulations of the company, be entitled on surrendering such warrant for cancellation, to have his name entered as a member in the register of members, -(hence it is necessary to provide for the surrender,)—and the company shall be responsible for any loss incurred by any person by reason of the company entering in its register of members the name of any bearer of a share warrant in respect of the shares or stock specified therein without the share warrants being surrendered and cancelled." Meaning of 12. In the above conditions share warrant means a warrant in respect share warrant. of a share or shares, or of stock of the company, issued pursuant to the Companies Act, 1867, and the articles of association of the company. Form 126. REGISTRATION OF EXISTING COMPANIES. That the company be registered under the Companies Act, 1862 [as Resolution for a company limited by shares, and that the company's name be changed registration. to The Company, Limited.] |