The Articles of Association.

ousted by those who have borne none of the burden, but who come in after the work is done and seize the lion's share of the spoil. The registrar was wont to object to the insertion of such provisions as these in the deeds of settlement of Companies. But now the law permits the insertion of any terms the promoters may be pleased to introduce, and they would be unwise indeed not to include whatever may help to secure to themselves the fruits of their labours.

Of course, similar articles might be inserted for the securing of offices, with certain fixed emoluments, to any other persons.

7. That T. U., Esq., shall be the standing counsel to the Company.

8. That the materials required for the manufactures of the Company (as the case may be) shall be purchased of A. B., at the market price thereof, and that if any dispute shall arise as to such price, it shall be referred to arbitration, in the manner provided by sect. 72 of the Joint Stock Companies Act, 1862.

SHARES.

9. That a person be deemed to be a member of the Company on his signing an acceptance of shares, or making any payment on account of them.

10. Every member shall, on payment of one shilling, be entitled to a certificate, under the common seal of the Company, specifying the share or shares held by him, and the amount paid up thereon.

11. Where several persons are registered as joint holders of any share, the receipt of one of them for any dividend payable in respect of such share shall be sufficient.

TRANSFER OF SHARES.

12. That no share shall be transferred until all calls made upon it be fully paid.

The Articles of Association.

13. That the Company shall have a lien upon the shares of a member for any debt due from him to the Company, and that the Company may refuse to register any transfer of shares made by a member who is indebted to them.

NOTE. This is a very necessary provision, for hitherto a Company has had no lien upon the shares for the debts of a shareholder.

14. The instrument of transfer of any share in the Company shall be executed both by the transferor and transferee, and the transferor shall be deemed to remain a holder of such share until the name of the transferee is entered in the register book in respect thereof.

15. Shares in the Company shall be transferred in the following form :—

I A. B. of

in consideration of the sum of

pounds paid to me by C. D. of

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

of

day

16. The transfer books shall be closed during the fourteen days immediately preceding the ordinary general meeting in each year.

TRANSMISSION OF SHARES.

17. The executors or administrators of a deceased member shall be the only persons recognised by the Company as having any title to his shares.

18. Any person becoming entitled to a share in consequence of the death, bankruptcy, or insolvency of any member, or in consequence of the marriage of any female member, or in any way other than by transfer, may be

The Articles of Association.

registered as the member upon such evidence being produced as may be required by the Company.

NOTE. We would suggest the omission of regulations 14 & 15 in table A., to the effect that any person who has become entitled to a share in any way other than by transfer may, instead of being registered himself, elect to have some person to be named by him registered as a holder of such share, by executing to his nominee a deed of transfer of such share; because no substantial advantage is gained by it to the shareholder, while it would expose the Company to imposition of many kinds, as, for instance, the transfer of liability from persons able to pay to paupers. It is one of those privileges which would be used only when there was an advantage to be gained by it at the expense of the Company.

19. If a transferor of shares is some other than the person whose name appears on the register as the member, the deed of transfer shall be accompanied with such evidence as may be necessary to show the title of the transferor, and no such transfer shall be valid until approved of, accepted and registered by the Company.

CALLS.

20. The Directors may from time to time make such calls upon the members, in respect of moneys unpaid upon their shares, as they think fit, provided that twentyone days' notice at the least be given of each call; that no more than £ per share shall be called for at one time, and that calls shall not be made at less intervals than [three] months. The calls are to be paid in such manner as the Company may appoint.

NOTE.-Here, also, there has been added to the regulation (4) in the table a provision limiting the amount and the periods of call, so as to protect

The Articles of Association.

shareholders against unexpected claims and the liability to forfeiture for nonpayment, of which designing directors might take advantage.

21. A call shall be deemed to have been made at the time when the resolution of the directors authorising such call was passed.

22. Calls may be made by resolution of the board of directors.

NOTE. This is an addition to the regulations in the schedule, which omit to provide for the manner of making calls.

23. If any call be not paid by the member before or on the day appointed for payment thereof, such member for the time being shall pay interest for the same at the rate of 5 pounds per cent. per annum from the day appointed for payment thereof to the time of the actual payment.

24. The directors may, if they think fit, receive from any member willing to advance the same, all or any part of the moneys due upon his shares beyond the sums actually called for, and upon the moneys so paid in advance, or so much thereof as from time to time exceeds the amount of the calls then made upon the shares in respect of which such advance has been made, the Company may pay interest at such rate as the member paying such sum in advance and the directors may agree upon.

FORFEITURE OF SHARES.

25. If a member fail to pay any call on the day appointed for payment thereof, the directors may, at any time thereafter, so long as the call remains unpaid, give notice to such member requiring him to pay such call, together with the interest due thereon, and expenses.

26. The notice shall name a further day, on or before which such call, and all interest and expenses that have accrued by reason of such nonpayment, are to he paid. It shall also name the place where payment is to be made (the place so named being either the registered office of the Company or

The Articles of Association.

some other place at which calls of the Company are usually made payable). The notice shall also state that in the event of nonpayment at or before the time and at the place appointed the shares in respect of which such call was made will be liable to be forfeited.

27. If the requisitions of such notice are not complied with, any share in respect of which such notice has been given may at any time thereafter before payment made of all calls, interest, and expenses due in respect thereof, be forfeited by a resolution of the directors declaring the same to be forfeited.

28. When any share has been so declared to be forfeited, notice of such forfeiture shall be given to such shareholder, and an entry thereof shall forthwith be made in the register of shareholders, stating the date of such forfeiture.

NOTE. This is suggested as proper to be inserted in the articles; such a provision is omitted from the regulations; but it is manifestly desirable, and we would recommend its general adoption.

29. Any shares so forfeited shall become the property of the Company, and may be disposed of in such manner as the Company thinks fit.

30. Any member whose shares have been forfeited shall, notwithstanding, be liable to pay to the Company all calls owing upon such shares at the time of the forfeiture.

NOTE. Formerly it was usual to prescribe in the deed of settlement the manner in which forfeited shares should be disposed of. It is much more convenient to leave it to the Company to determine this according to the exigencies of the

moment.

31. A statutory declaration in writing, that the call in respect of a share was made and notice thereof given, and that default in payment of the call was made, and that the forfeiture of the share was made by a resolution of the