Part II. Distribution of Capital and Liabilities.

The provision in this section makes a pretence of care for the protection of the public which it does not perform.

30. Entry of trusts on register.—No notice of any trust,(1) expressed, implied, or constructive, shall be entered on the register, or be receivable by the registrar, in the case of companies under this act and registered in England or Ireland.

(1) Notice of any trust.]—But although such a notice would be worthless if given to the registrar, it may not be so if given to the Company. Suppose shares or stock to have been assigned by way of mortgage, or deposited as a security by way of equitable mortgage, a notice to the Company of the trust, and requiring them not to transfer the shares or stock until the claim is satisfied, although not legally binding, would probably be respected. At least so it is with policies of assurance; the Companies do not recognise assignments, but they accept notices of assignment and refuse to pay until the assignee concurs in the discharge.

31. Certificate of shares or stock.—A certificate,(1) under the common seal of the company, specifying any share or shares or stock held by any member of a company, shall be primâ facie evidence of the title of the member to the share or shares or stock therein specified.

(1) A certificate.]-The following form of certificate may be adopted:

Registered No.

The Clothing Company Limited.

Certificate of 21. share.

This is to certify that

of the share No.

of

is the Proprietor

of the Clothing Company Limited,

subject to the regulations of the said Company. Given under the common seal the

year of our Lord

day of

in the

Seal.

Signed

Directors.

Secretary.

32. Inspection of register.—The register of members, commencing from the date of the registration of the company, shall be kept at the registered office of the company hereinafter mentioned: Except when

Distribution of Capital.

closed as hereinafter mentioned, it shall during business hours, but subject to such reasonable restrictions as the company in general meeting may impose, so that not less than two hours in each day be appointed for inspection, be open to the inspection of any member gratis, and to the inspection of any other person on the payment of one shilling, or such less sum as the company may prescribe, for each inspection; and every such member or other person may require a copy of such register, or of any part thereof, or of such list or summary of members as is hereinbefore mentioned, on payment of sixpence for every hundred words required to be copied : If such inspection or copy is refused, the company shall incur for each refusal a penalty not exceeding two pounds, and a further penalty not exceeding two pounds for every day during which such refusal continues, and every director and manager of the company who shall knowingly authorize or permit such refusal shall incur the like penalty; and in addition to the above penalty, as respects companies registered in England and Ireland, any judge sitting in chambers, or the Vice-warden of the Stannaries, in the case of companies subject to his jurisdiction, may by order compel an immediate inspection of the register.

33. Power to close register.—Any company under this act may, upon giving notice by advertisement in some newspaper circulating in the district in which the registered office of the company is situated, close the register of members for any time or times not exceeding in the whole thirty days in each year.

34. Notice of increase of capital and of members to be given to registrar.-Where a company has a capital divided into shares, whether such shares may or may not have been converted into stock, notice of any increase in such capital beyond the registered capital, and where a company has not a capital divided into shares, notice of any increase in the number of members beyond the registered number, shall be given to the registrar in the case of an increase of capital, within fifteen days from the date of the passing of the resolution by which such increase has been authorized, ard in the case of an increase of members within fifteen days from the time at which such increase of members has been resolved on or has taken place, and the registrar shall forthwith record the amount of such increase of capital or members: If such notice is

Part II. Distribution of Capital and Liabilities.

not given within the period aforesaid the company in default shall incur a penalty not exceeding five pounds for every day during which such neglect to give notice continues, and every director and manager of the company who shall knowingly and wilfully authorize or permit such default shall incur the like penalty.

35. Remedy for improper entry or omission of entry in register. If the name of any person is, without sufficient cause, entered in or omitted from the register (1) of members of any company under this act, or if default is made or unnecessary delay takes place in entering on the register the fact of any person having ceased to be a member of the company, the person or member aggrieved, or any member of the company, or the company itself, may, as respects companies registered in England or Ireland, by motion in any of Her Majesty's superior courts of law or equity, or by application to a judge sitting in chambers, or to the Vice-warden of the Stannaries in the case of companies subject to his jurisdiction, and as respects companies registered in Scotland by summary petition to the Court of Session, or in such other manner as the said courts may direct, apply for an order of the court that the register may be rectified; and the court may either refuse such application, with or without costs, to be paid by the applicant, or it may, if satisfied of the justice of the case, make an order for the rectification of the register, and may direct the company to pay all the costs of such motion, application, or petition, and any damages the party aggrieved may have sustained: The court may in any proceeding under this section decide on any question relating to the title of any person who is a party to such proceeding to have his name entered in or omitted from the register, whether such question arises between two or more members or alleged members, or between any members or alleged members and the company, and generally the court may in any such proceeding decide any question that it may be necessary or expedient to decide for the rectification of the register; provided that the court, if a court of common law, may direct an issue to be tried, in which any question of law may be raised, and a writ of error or appeal, in the manner directed by "The Common Law Procedure Act, 1854," shall lie.

() Entered in or omitted from the register.]-In Ex parte Harris (29 L. J. 364, Ex.), on an application to the court to

Liability of Members.

rectify the register by substituting the name of an alleged shareholder, the court refused, because an action for calls was pending, preferring to leave them to try the question in that action. The court has now power to direct an issue, so that the court will be enabled to employ the authority here given to it.

36. Notice to registrar of rectification of register.-Whenever any order has been made rectifying the register, in the case of a company hereby required to send a list of its members to the registrar, the court shall, by its order, direct that due notice of such rectification be given to the registrar.

37. Register to be evidence.-The register of members shall be prima facie evidence(1) of any matters by this act directed or authorized to be inserted therein.

(1) Shall be primâ facie evidence.]-It will, therefore, be open to any person whose name appears therein to contest his liability; a power that may sometimes be of great importance, especially when the register is used for the purpose of forming the list of contributories at a winding up.

Liability of Members.

38. Liability of present and past members of company.--In the event of a company formed under this act being wound up, every present and past member of such company shall be liable to contribute to the assets of the company to an amount sufficient for payment of the debts and liabilities of the company, and the costs, charges, and expenses of the winding up, and for the payment of such sums as may be required for the adjustment of the rights of the contributories amongst themselves, with the qualifications following; (that is to say), (1.) No past member shall be liable to contribute to the assets of

the company if he has ceased to be a member for a period of one year or upwards prior to the commencement of the winding up : (1)

(2.) No past member shall be liable to contribute in respect of any debt or liability of the company contracted after the time at which he ceased to be a member :

(3.) No past member shall be liable to contribute to the assets of

K

Part II. Distribution of Capital and Liabilities.

the company unless it appears to the court that the existing members are unable to satisfy the contributions required to be made by them in pursuance of this act :

(4.) In the case of a company limited by shares, no contribution shall be required from any member exceeding the amount, if any, unpaid on the shares in respect of which he is liable as a present or past member :

(5.) In the case of a company limited by guarantee, no contribution shall be required from any member exceeding the amount of the undertaking entered into on his behalf by the memorandum of association :

(6.) Nothing in this act contained shall invalidate any provision contained in any policy of insurance or other contract whereby the liability of individual members upon any such policy or contract is restricted, or whereby the funds of the company are alone made liable in respect of such policy or

contract:

(7.) No sum due to any member of a company, in his character of a member, by way of dividends, profits, or otherwise, shall be deemed to be a debt of the company,(2) payable to such member in a case of competition between himself and any other creditor not being a member of the company; but any such sum may be taken into account, for the purposes of the final adjustment of the rights of the contributories amongst themselves. (1) Prior to the commencement of the winding up.]-It is enacted by sect. 84, that a winding up of a Company by the court shall be deemed to commence at the time of the presentation of the petition for the winding up, and if voluntary, at the time of passing the resolution to wind up (sect. 130). Consequently a sale of shares not fully paid up does not release the transferor from his liability for twelve months; but that liability will be limited to the balance remaining unpaid upon the shares transferred.

(2) Shall be deemed to be a debt of the Company.]-This means that the claims of a member are to be postponed to the claims of other creditors. Thus, if an arrear of dividend to the amount of 100l. remained due to B., a member, at the moment of winding-up, and calls to the amount of 100l.