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OF RAILWAYS BY STATUTE.
OF THE PROVISIONAL FORMATION OF A COMPANY PRE
VIOUS TO AN ACT OF PARLIAMENT, AND OF THE POWERS, DUTIES, RIGHTS AND LIABILITIES GROWING THEREOUT.
1. Of the Provisional Formation of a Company for the making of a Railway.
2. Of the Powers, Privileges and Incapacities of a Company for the making of a Railway in its Provisional State. 3.-Of the Duties of such Company, and herein more particularly of the Steps preliminary to and of the obtaining the Act of Parliament.
4. Of the Rights and Liabilities growing out of the above State of Things.
SECT. 1.-Of the Provisional Formation of a Company for the making of a Railway.
19. Where parties propose to construct a railway, and by consequence to apply to parliament for a grant of the necessary powers, there are three things mainly important for them to attend to: 1st. To comply with the requisitions of the recent act for the registration, &c, of joint stock companies, so far as they are applicable to companies for the making of railways; 2ndly. To procure the necessary sub
scriptions, and to establish such arrangements among the subscribers, as may provide for a due contribution towards the expenses at all events, whether the project succeed or not, and also for the conduct and management of the undertaking till an act is procured; and 3rdly. To comply with the regulations which are adopted by parliament on application for bills of this nature.
20. I. Of the registration of a company for the making of a railway, and herein, 1st, of provisional registration.
Before, however, adverting to the immediate head of our inquiry, there is a preliminary question, that it may be proper briefly to notice, viz. how far companies for the formation of railways in foreign states, or in the colonies, fall within the provisions of the above act. The true test then of the applicability of the act to such companies would seem to be, to consider whether it is intended by the projectors that the legal relation of partnership between the subscribers should be formed, and the government and administration of the company's affairs, as a company, be transacted here or abroad? In the former case, the company must be deemed to be substantially an English company, and consequently to fall within the provisions of the act; in the latter not. It follows, consequently, that even though a company have an office and place of business in this country, and a branch committee established here for the purpose of allotting shares, receiving deposits &c., still it is not within the act, if it originates abroad, and the management of its concerns is substantially carried on there, the branch com
mittee here in such case being the mere agents of, and acting in subordination to, the foreign directors. (a)
(a) The enactment, on which rests the determination of the above question, is as follows:
And be it enacted, that this act shall apply to every joint stock company, as hereinafter defined, established in any part of the United Kingdom of Great Britain and Ireland, except Scotland, or established in Scotland and having an office or place of business in any other part of the United Kingdom, for any commercial purpose, or for any purpose of profit, or for the purpose of assurance or insurance (except banking companies, schools, and scientific and literary institutions, and also friendly societies, loan societies, and benefit building societies, respectively duly certified and enrolled under the statutes in force respecting such societies, other than such friendly societies as grant assurances on lives to the extent hereinafter specified); and that the term "joint stock company" shall comprehend
Every partnership whereof the capital is divided or agreed to
be divided into shares, and so as to be transferable without the express consent of all the copartners; and also, Every assurance company or association for the purpose of assurance or insurance on lives, or against any contingency involving the duration of human life, or against the risk of loss or damage by fire. or by storin or other casualty, or against the risk of loss or damage by fire, or by storm or other casualty, or against the risk of loss or damage to ships at sea ea or on voyage, or to their cargoes, or for granting or purchasing annuities on lives; and also every institution enrolled under any of the acts of parliament relating to friendly societies, which institution shall make assurances on lives or against any contingency involving the duration of human life to an extent upon one life or for any one person to an amount exceeding two hundred pounds, whether such companies, societies, or institutions shall be joint stock companies or mutual assurance societies, or both; and also,
21. To return then to the question originally proposed for consideration, in order to procure themselves to be registered pursuant to the recent statute (7 & 8 Vict. c. 110), for the registration of joint stock companies, the promoters, before taking any steps to make their scheme public, must make certain returns to the office for the registration of joint
Every partnership which at its formation, or by subsequent admission (except any admission subsequent on devolution or other act in law), shall consist of more than twenty-five members:
And that, except where the provisions of this act are expressly applied to partnerships existing before the said first day of November, it shall be held to apply only to partnerships the formation of which shall be commenced after that date: provided nevertheless, that, except as hereinafter specially provided, this act shall not extend to any company for executing any bridge, road, cut, canal, reservoir, aqueduct, waterwork, navigation, tunnel, archway, railway, pier, port, harbour, ferry or dock, which cannot be carried into execution without obtaining the authority of parliament: provided also, that, except as hereinafter is specially provided, this act shall not extend to any company incorporated or which may be hereafter incorporated by statute or charter, nor to any company authorized or which may be hereafter authorized by statute or letters patent to sue and be sued in the name of some officer or person."
Looking at the provisions of the above section, the question would seem to turn mainly on the meaning to be attributed to the term "established." Now this term cannot, it should seem, be construed to have reference exclusively either to the first formation of the company, (that is, in other words, the formation of the legal relation of partnership between the subscribers), or to the conduct and management of its business, but includes both notions. (See 9 Jurist, p. 225, and p. 239; Lewis's Liabilities of Subscribers, &c., pp. 77, 78; Wordsworth's Joint Stock Companies, pp. 7, 8, 5th ed.)
stock companies. (b) Those returns must embody the following particulars :
"1. The proposed name of the intended company; and also,
2. The business or purpose of the company; and also,
3. The names of its promoters, together with their respective occupations, places of bu
siness (if any), and places of residence." Also, either before or after the scheme is made public, the following particulars must be returned when and as they are from time to time decided on. "4. The name of the street, square, or other
place in which the provisional place of business or place of meeting shall be situate, and the number (if any) or other designation of the house or office; and also,
5. The names (c) of the members of the committee or other body acting in the forma
(b) 7 & 8 Vict. c. 110, s. 4. Forms for registration are obtainable at the registry office. As to the fees payable upon and in respect of registration, see act, s. 21.
(c) Coupling the provision as to this fifth particular with that in the following section, it would seem that the only safe course that can be adopted by the promoters, &c. to avoid the penalty mentioned in the latter section, is, before deciding on the members of the committee, to obtain from them the necessary consent and agreement in writing, otherwise they run the risk of the parties decided on refusing to act.
All persons whose names appear on the face of the prospectus as provisional committee-men, must, it is conceived, be regis. tered, although they are mere honorary members, and not intended to take any active share in the management of the com