Auditors and Accounts.

Another useful book would be a list of the bad debts or losses; but not to multiply books, this record may be contained in the same book with the liabilities list.

A guarantee of fidelity should be required from every servant of the Company, according to the amount of money or goods intrusted to him. This should be an inflexible rule, even if the Company should pay the premiums.

A

As a general rule, it is desirable to vest large discretionary power in the secretary or manager, only making him responsible for its exercise. Board cannot possibly act with sufficient promptitude in the ordinary affairs of business, and many advantages may be lost by delay for the purpose of obtaining a formal consent.

The Auditors and the Accounts.

Every Joint Stock Company should annually, at the general meeting, appoint one or more auditors, who need not be members. But no person should be elected as an auditor who is interested, otherwise than as a shareholder, in any trading transaction of the Company.

The remuneration may be fixed at the time of election.

If a casual vacancy occurs, the directors should summon an extraordinary general meeting to elect another auditor.

If no auditors be elected, then, on application of one-fifth of the members (and in the case of a Banking Company, of members holding one-third of the whole shares), the Board of Trade is authorised to appoint one or more inspectors to examine

Members and Shares.

and report on the affairs of the Company, or the Company may by special resolution appoint such inspectors: (sect. 60.)

It appears not to be generally understood that it is the duty of the directors to prepare the balance-sheet. The duty of the auditors is only to see that it is correct. Some auditors have supposed that they are empowered to frame a balancesheet after their own fashion, and throw aside that of the directors. It is not so. If the auditors object to the directors' balance-sheet, as incorrect in figures, they may correct it; but if they object only to its form, they should state their objection to the Board and procure its assent to an alteration. Should the Board refuse, the auditors may report their objection to the members.

It is usual for the auditors to appoint a day for meeting at the offices of the Company, and there, with the secretary and book-keeper, they go through all the accounts and compare them with the vouchers.

The auditors should make a report to the members upon the balance-sheet and accounts, and state whether, in their opinion, the balance-sheet is a full and fair balance-sheet; and in case they have called for explanations or information from the directors, whether such have been given, and are satisfactory.

Members and Shares.

It has already been stated that the shares may be of any amount, however small, and that no portion of them is required to be paid up.

As a Company may now be formed so soon as

Members and Shares.

seven shares are subscribed, it will be neither prudent nor necessary to allot shares before incorporation. Hence, all the questions as to the liabilities of shareholders on provisional registration are now swept away.

A "member or shareholder is defined by the act to be "The subscribers to the Memorandum of Association, and every other person who has agreed to become a member of a Company under this act, and whose name is entered on the register of members:" (sect. 23.)

No notice of any trust, express, implied, or constructive, is to be entered on the register as receivable by the Company: (sect. 30.)

As soon as the Company is incorporated, the shareholder is entitled to a certificate of his shares; and, for the purpose of transfer, it is desirable to give him a separate certificate of each share in the following form:

of

CERTIFICATE OF SHARE.

The Company, incorporated on the

18

Number

This is to certify, that A. B., of

of the share, Number

of the

day

, is the proprietor Company, subject

to the regulations of the said Company, and that up to this day there has been paid up in respect of such share the sum Given under the common seal of the said Comday of in the year 18 " [Signature of two Directors.]

of pany, the

Entered by

[Signed by Secretary.]

(L. S.)

The directors are required by sect. 25 to keep a book to be called the Register of Members, and to enter in it the following particulars:

Members and Shares.

(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.

This register must be kept at the office of the Company, and every member may search this register gratis at all times during business hours, and any other persons may do so on payment of a fee not exceeding 1s.: (sect. 32.) The certificate of the share is prima facie evidence of the title of the shareholder to the share therein specified: (sect. 31.) An annual list is to be made of the names, addresses, and occupations of all persons who, on the 14th day after the annual meeting, are shareholders, and the number of shares held by each, and also a summary containing the following particulars :

(1.) The amount of the capital of the Company, and the number of shares into which it is divided:

(2.) The number of shares taken from the commencement of the Company up to the date of the summary : (3.) The amount of calls made on each share : (4.) The total amount of calls received: (5.) The total amount of calls unpaid:

(6.) The total amount of shares forfeited:

(7.) The names, addresses, and occupations of the persons

who have ceased to be members since the last list was made, and the number of shares held by each of them.

Members and Shares.

This list and summary is to be in a separate part of the register, and to be completed within seven days after the 14th day above-named, and a copy sent to the registrar: (sect. 26.) The Company is liable to a penalty of 5l. per day for each day this register is not kept or list not sent to the registrar: (sect. 27.) But the Company may, on notice given by advertisement, close the register for a period not exceeding thirty days in each year: (sect. 33.)

A shareholder may sell or transfer his shares by deed, duly stamped, in which the bare amount of the consideration is expressed. The form of transfer may be as follows:

I, A. B., of

TRANSFER OF SHARES.

in consideration of the sum of
do hereby transfer to the
in "The

paid to me by C. D., of

said

share [or shares], numbered

Company," standing in my name in the books of the Company, to hold unto the said his executors, administrators, and assigns [or successors and assigns], subject to the several conditions on which I held the same at the time of the execution hereof. And I, the said do hereby agree to take the said share [or shares] subject to the same conditions. As witness our hands and seals, the

of

[Signature.]

day

On the production of this transfer, duly stamped, the directors should cause a memorial of it to be entered in a book which may be called the Register of Transfers, and alter the register accordingly.

The purchaser of a share cannot receive dividends or vote until the transfer is produced and registered. The transferor will be deemed the shareholder until the transfer is registered.

But a shareholder cannot transfer his shares