« EelmineJätka »
AFTER many attempts to simplify the Law relative to Joint Stock Companies a code has been promulgated by the Legislature for the formation, regulation and winding-up of companies of every description. A favourable opportunity is thus afforded for the publication of a new Manual on the subject in a comparatively narrow compass.
Although the law on the above subject has been included in some valuable works on the law of partnership, it appears to the Author that a separate work embracing the whole subject is a desideratum, as affording a continuous, in lieu of a disjointed, view of the subject.
The Law relative to Joint Stock Companies has not at present many rules in common with those on the law of partnership, but it has in fact been framed to supersede some of those rules, and to establish a separate system independent of the general law of partnership.
The Companies Act, 1862, is founded upon several previous statutes, and in many instances adopts, nearly verbatim, the language of the provisions of those statutes; it is obvious, therefore, that the notes of the de
cisions on the repealed acts, which are added, will afford material assistance in the construction of the new Act.
The Companies Act, 1862, incorporates by reference some other Acts and parts of Acts of Parliament, which are printed in this Work either as notes, or separately at the end of this Work. The Industrial and Provident Societies Act, 1862, which is connected with the above Act, is added. The Act 7 Will. 4 & 1 Vict. c. 73, for enabling the Crown to confer powers on trading and other companies, is also included.
The Companies Act, 1862, differs from the preceding Joint Stock Companies Acts in some important points of principle and in some minor matters of detail. The following are some of the principal:
1. A new class of companies may be established under the title of a company limited by guarantee, in which the members undertake to contribute in a limited amount to the assets of the company in the event of the same being wound-up. It is obligatory upon a company of this kind that its memorandum of association should be accompanied, when registered, by articles of association signed by the subscribers of the memorandum, and prescribing such regulations as they deem expedient. Sect. 14, post, p. 21. In the event of the company being wound-up no contribution shall be required from any member exceeding the amount of the undertaking entered into on his behalf by the memorandum of association. Sect. 38, pl. 5, post, p. 46.
When an order has been made for winding-up a company limited by guarantee, and having a capital
limited by shares, or where any such company is being wound-up voluntarily, any share capital that may not have been paid up shall be deemed assets of the company and a debt due to the company from each member to the extent of any sums that may remain unpaid on any shares held by him. See sects. 90, 134, post, pp. 109, 173.
2. Insurance companies which previously to the Companies Act, 1862, were governed by the Act 7 & 8 Vict. c. 110, post, p. 237, n., which was not repealed as to such companies (see 20 & 21 Vict. c. 80; see post, p. 77), have now become subject to the same provisions as other companies. Such companies were required to register on or before the 3rd December, 1862. See sect. 209, post, p. 237. The new Act, however, does not invalidate any provision in any policy of insurance or other contract whereby the liability of individual members upon any such policy is restricted, or whereby the funds of the company are alone made liable in respect of such policy or contract. See sect. 38, pl. 6, post, p. 146.
3. The jurisdiction to wind-up companies is transferred to the Court of Chancery, so that the Court of Bankruptcy can now only act in such matters under the new Act by the direction of the former Court.
4. The new Act has abolished the office of creditors' representative, who was appointed in pursuance of the Act 21 & 22 Vict. c. 78, to represent the creditors in winding-up.
5. The jurisdiction of the Court of Stannaries is considerably enlarged.
6. Provisions are made for the registration of existing companies. See sects. 179-198, post, p. 217— 230. The Companies Act, 1862, is also applied to winding-up unregistered companies, except railway companies incorporated by Act of Parliament. See sects. 199-204, post, pp. 230-235.
Some observations on the formation of a company are made in the following pages. See pp. 5, 241. The memorandum of association prescribes the name of the company, the place for the registered office, the objects for which it is formed, the liability of the members, the nominal capital of the company and the amount of the shares. This document requires the names, addresses and descriptions of the subscribers, the number of shares taken by each and the signature of each subscriber in the presence of one witness.
In a company limited by shares the parties may adopt such of the provisions contained in Table (A.), post, p. 241, as they think proper, or they may frame a deed quite independent of those provisions. It is only essential that the form for the government of the company should be settled at the time of registration.
The mode by which the business of the company is to be conducted, the number and qualifications of the directors, and generally the whole internal management of the company, may be subject to such regulations as the parties think fit to adopt.
The Author, having been favoured with some printed forms of registered Articles of Association, has inserted two forms. The first form adopts Table (A.) to a limited extent. The second form is framed independently of
that table, and is complete in itself. It is presumed that the insertion of these forms, which appear to be skilfully drawn, will render this work more generally useful by affording useful hints for framing instruments of a similar nature.
In many cases the most advisable course to be pursued in framing articles of association will be, not to adopt Table (A.) either wholly or partially by reference, but to frame an entire code for the government of the company. The articles so framed may embody or modify such of the regulations in Table (A.) as will suit the particular case.
The advantage and convenience of having a legal instrument complete in itself, instead of having to refer to portions of other forms, is obvious. It was observed by Mr. Brodie, the eminent Conveyancer,-" In common sense every instrument should be perfect in itself, and should not have its construction dependent upon another instrument."
It is scarcely necessary to observe that great care is required in preparing the articles of association for the government of the company, as every violation of them is illegal and will render the directors or officers of the company personally liable for a breach of the regulations contained in them.
It should also be borne in mind that the articles when registered bind the company and the members thereof to the same extent as if each member had subscribed his name and affixed his seal thereto, and there were a covenant on the part of himself, his heirs, executors and administrators, to conform to all the regula