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SEC. 11. Notice of issuing letters patent.-Notice of the granting of the letters patent shall be forthwith given by the provincial secretary in the Ontario Gazette.1


SEC. 12. Shareholder liable for par value of his stock. — Each shareholder, until the whole amount of his stock has been paid up, shall be individually liable to the creditors of the company to an amount equal to that not paid up thereon, but shall not be liable to an action therefor by any creditor before an execution against the company has been returned unsatisfied in whole or in part; and the amount due on such execution, but not beyond the amount so unpaid of his said stock, shall be the amount recoverable with costs against such shareholder.2

SEC. 13. Liability not changed by reduction of capital.The liability of shareholders to persons who were at the time of a reduction of the capital”, creditors of the company shall remain as though the capital had not been decreased. 4


SEC. 14. Board of directors.—The affairs of every company shall be managed by a board of not less than 3 directors.5

SEC. 15. Subdivision of shares.—The directors of the company may at any time make a by-law subdividing the existing shares into shart-s of smaller amount.

Sec. 16.Liability for loans to shareholders.—No loan shall be made by the company to any shareholder, and if such loan is made, all directors and other officers of the company making the same, and in any wise assenting thereto, shall be jointly and severally liable to the company for the amount thereof, and also to third parties to the extent of such loan with legal interest, for all debts of the company contracted from the time of making the loan of the money to that of the repayment thereof; but this section shall not apply to a building society, or to a company incorporated for the lending of money.?

Sec. 17. Limitedto follow name in contracts.—The directors of every company shall be jointly and severally liable upon every written contract or undertaking of the company on the face whereof the word "limited” or the words "limiied liability are not distinctly written or printed after the name of the company where it first occurs in such contract or undertakirg:8

SEC. 18. Limitedto follow name in advertisements.-In all advertisements of the company the word “limited” shall appear after its name, and both company and directors are liable to a penalty of $20 for a breach of this provision.9

SEC. 19. Liability of directors for wages.The directors of the company shall be jointly and severally liable to the laborers, servants, and apprentices for all debts not exceeding 1 year's wages due for services performed for the company while they are such directors; but no director shall be liable to an action therefor unle-s the company has been sued therefor within 1 year from the time when he ceased to be such director, nor yet before an execution against the company has been returned unsatisfied in whole or in part; and the amount due on each execution shall be the amount recoverable with corts against the directors. 10


SEC. 20. No restrictions.—There is no statutory prohibition on the directors dealing in the stock of the company.


SEC. 21. No regulations. There are no statutory regulations. regarding prices of products.

1 Ontario Joint Stock Company Letters Patent Act, sec. 13.
2 Ibid., sec. 61.
3 See ante, sec. 6.
4 Ontario Joint Stock Company Letters Patent Act, sec. 20.
5 Ibid., sec. 29.
6 Ibid., sec. 17.
7 Ibid., sec. 67.
8 St. 0. 1889, ch. 26, sec. 2.
'St. 0. 1889, ch. 26, secs. 3–5.

10 Ontario Joint Stock Company Letters Patent Act, sec. 68. See for liability of directors for paying dividends out of capital, post, sec. 24; for default in filing annual statement, post, sec. 27; for ialse entries in books, post, sec. 30; for refusal to allow inspection of books, post, sec. 32.


SEC. 22. By-laws concerning dividends.—The directors may from time to time make by-laws to regulate the declaration and payment of dividends.1

SEC. 23. Preferred stock.-(1) The directors may make a by-law for creating and issuing any part of the capital stock as preference stock, giving the same such preference and priority as respects dividends and otherwise over ordinary stock as may be declared by the by-law. (2) The by-laws may provide that the holders of such preference shares shall have the right to select a certain stated proportion of the board of directors, or may give them such other control over the affairs of the company as may be considered expedient. (3) No such by-law shall have any force or effect whatever until after it has been unanimously sanctioned? by the shareholders present in person or by proxy at a general meeting of the company duly called for considering the same, or unanimously sanctioned by the shareholders of the company.

SEC. 24. Liability of directors.—The directors of the company shall not declare or pay any dividend when the company is insolvent, or any dividend the payment of which renders the company insolvent or diminishes the capital stock thereof, but if any director present when such dividend is declared forth with, or if any director then absent, within 24 hours after he has become aware thereof and able so to do, enters on the minutes of the board of directors his protest against the same, and within 8 days thereafter causes such protest to be published in at least one newspaper at or near as may be possible to the office or chief place of business of the company, such director may thereby, and not otherwise, exonerate himself from liability. 4



SEC. 25. Not to purchase stock in other companies.—No company shall use any of its funds in the purchase of stock in any other corporation unless expressly authorized by by-law confirmed at a general meeting.5


SEC. 26. Annual list of shareholders and statement of affairs.—Every company shall on or before the 1st day of February in every year make a list of all persons who on the 31st day of December previous were shareholders of the company; and such list shall state the names alphabetically arranged and the addresses and callings of all such persons, the amount of stock held by them and the amount unpaid thereon, and a summary of the company's affairs on the 31st day of December preceding showing the following facts:

(1) The names and residences and post-office addresses of the directors, secretary, and treasurer of the company.

(2) The amount of the capital of the company and the number of shares into which it is divided.

(3) The number of shares taken from the commencement of the company up to the 31st day of December preceding the date of the summary.

(4) The amount of stock (if any) issued free from calls; if none is so issued, this fact is to be stated.

(5) The amount issued subject to calls.
6) The amount of calls made upon each share.
7) The total amount of calls received.
(8) The total amount of calls unpaid.
(9) The total amount of shares forfeited.
(10) The total amount of shares which have never been allotted or taken rip.

(11) The total amount for which shareholders of the company are liable in respect to unpaid stock held by them.

The above summary shall be verified by two officers of the company and one copy deposited with the provincial secretary and another copy kept posted up in the head office of the company until another like summary is posted. 6

SEC. 27. Penalty for default in making annual statement.--If a company makes default in complying with the provisions of the last section, the company shall incur a pen

1 Ontario Joint Stock Company Letters Patent Act, sec. 37.
2 See post, sec. 34.
3 Ontario Joint Stock Company Letters Patent Act, sec. 25.
4 Ibid., sec. 66.
6 Ibid., sec. 60.
6 Ibid., sec. 57.

alty of $20 for every day during which the default continues, and every director, manager, or secretary of the company who knowingly and willfully authorizes or permits such default shall incur the like penalty."


SEC. 28. No direct report required.-An annual statement? of the affairs of the com pany shall be posted up in the office of the company; and the shareholders may examine the books of the company, but no direct report to the shareholders is required by statute.



Sec. 29. Books to be kept. —The company shall cause a book or books to be kept by the secretary or some other officer especially charged with that duty wherein shall be kept recorded

(1) A copy of the letters patent incorporating the company and of any supplementary letters patent* issued to the company, and of all by-laws thereof.

(2) The names, alphabetically arranged, of all persons who are or who have been shareholders.

(3) The address and calling of every such person while such shareholder. (4) The number of shares of stock held by each shareholder.

(5) The amount paid in and remaining unpaid, respectively, on the stock of each shareholder.

(6) All transfers of stock in their order as presented to the company for entry, with the date and other particulars of each transfer, and the date of the entry thereof.

(7) The names, addresses, and callings of all persons who are or have been directors of the company:

with the several dates at which each person became or ceased to be such director.5 Sec. 30. Penalty for false entry in books.

No director, officer, or servant of the company shall knowingly make or assist to make any untrue entry in any book, or shall refuse or neglect to make any proper entry therein; and any person violating the provisions of this section shall, besides any criminal liability which he may thereby incur, be liable in damages for all loss or injury which any person interested may have sustained thereby..

Sec. 31. Books to be open for inspection.—Such books shall, during reasonable business hours of every day, except Sundays and holidays, be kept open for the inspection of the shareholders and creditors of the company, and their personal representatives, at the office or chief place of business of the company; and every such shareholder, creditor, or representative may make extracts therefrom.?

SEC. 32. Penalty for refusal of inspection.Any director or officer who refuses to permit any person entitled thereto to inspect such book or books or make extracts therefrom shall forfeit and pay to the party aggrieved the sum of $100; and in case the amount is not paid within 7 days after the recovery of judgment the court in which judgment is recovered, or a judge thereof, may direct the imprisonment of the offender for any period not exceeding 3 months unless the amount, with costs, is sooner paid.8

SEC. 33. Votes.At all general meetings of the company every shareholder shall be entitled to as many votes as he owns shares in the company, and may vote by proxy.9

SEC. 34. Not to vote till calls are paid.No shareholder being in arrears in respect to any call shall be entitled to vote at any meeting of the company. 10

ŠEC. 35. Issue of bonds and debentures. - Before the directors can borrow money upon the credit of the company and issue the bonds, debentures, and other securities of the company a by-law must be sanctioned by a vote of not less than twothirds in value of the shareholders. 11

1 Ontario Joint Stock Company Letters Patent Act, sec. 57.
2 For its contents see ante, sec. 26.
3 For details as to examination of books see post, secs. 29–32.
4 See ante, sec. 7.
5 Ontario Joint Stock Company Letters Patent Act, sec. 50.
6 Ontario Joint Stock Company Letters Patent Act, sec. 55.
7 Ibid., sec. 53.
8 Ibid., sec. 56.
9 Ibid., sec. 33, subd. 3.
10 Ibid., sec. 49.
11 Ibid., sec. 38, subd. 1.

SEC. 36. By-laws to alter capital to be sanctioned.-No by-law for increasing or decreasing the capital stock of the company or subdividing the shares shall have

any force or effect until after it has been sanctioned by a vote of not less than two-thirds in value of the shareholders at a general meeting of the company, duly called for, considering the same, and afterwards confirmed by supplementary letters.?

SEC. 37. Special meetings.-One-fourth part in value of the shareholders 3 of the company shall at all times have a right to call a special meeting thereof for the transaction of any business specified in such written requisition and the notice calling the meeting.


SEC. 38. Fees on letters patent to be fixed by order in council.—The lieutenant-governor in council may from time to time establish, alter, and regulate the tariff of the fees to be paid on application for a charter, and no step shall be taken in any department toward the issue of any letters or supplementary letters patent until after all fees therefor have been duly paid."


SEC. 39. Investigation of affairs of company.The high court or lieutenant-governor, if it is deemed necessary, may from time to time appoint a suitable person to investigate the affairs and management of the company, who shall report thereon to the court, and regarding the security afforded to those by or for whom its engagements are held, and the expense of such investigation shall be defrayed by the company; or the court may, if it deems necessary, examine the officers or directors of the company under oath as to the security aforesaid.6

Sec. 40. Penalty for false statements as to capital of companies.—Where any advertisement, letter head, postal card, account, or document issued, published, or circulated by any corporation, association, or company, or any officer, agent, or employee of any such corporation, association, or company purports to state the subscribed capital of the company, then the capital actually and in good faith subscribed, and no more, shall be so stated; and any such corporation, association, company, officer, agent, or employee who causes to be inserted an advertisement in any newspaper, or who publishes, issues, or circulates, or causes to be published, issued, or circulated, any advertisement, letter head, postal card, account, or document which states, as the capital of such company, any larger sum than the amount of such subscribed capital so actually and in good faith subscribed as aforesaid, or which contains any untrue or false statement as to the incorporation, control, supervision, management, or financial standing of such corporation, association, or company, and which statement is intended or calculated or likely to mislead or deceive any person dealing or having any business or transaction with said corporation, association, or company, or with any officer, agent, or employee of the association, corporation, or company, shall, upon summary conviction thereof before any police magistrate or justice of the peace having jurisdiction where the offense was committed, be liable to a penalty not exceeding $200 and costs and not less than $50 and costs, and in default of payment the offender, being an officer, agent, or employee as aforesaid, shall be imprisoned with or without hard labor for a term not exceeding 6 months and not less than 1 month, and on a second or any subsequent conviction he may be imprisoned with hard labor for a term not exceeding 12 months and not less than 3 months. Anyone can be prosecutor or complainant under this section, and one-half of any fine imposed by virtue of this section shall, when received, belong to Her Majesty for the use of the Province and the other half shall belong to the prosecutor or complainant.?



SEC. 41. Anti-trust act of Canada. —The anti-trust act of the Dominion of Canada, passed May 2, 1889, entitled “An act for the prevention and suppression of combinations formed in restraint of trade,'' applies to the Provinces. The material parts of this act are found herein at page 228.

1 See ante, secs. 5 and 6; as to sanction of by-laws creating preferred stock see ante, sec. 3, subd. 3. 2 Ontario Joint Stock Company Letters Patent Act, sec. 2. 3 As to rights of holders of preferred stock see ante, sec. 10, subd. 2. 1 Ontario Joint Stock Company Letters Patent Act, sec. 39. 5 Ibid., sec. 71. 6 Ibid., sec. 76. 71. St. O., 1893, p. 139.



Sec. 1. Amount of capital.The capitalization has neither a maximum nor minimum limit.

SEC. 2. Portion of capital paid before registration. In case of a no-liability company it shall be necessary that one-fourth of the shares shall be subscribed for and one-half of the subscribed capital shall be actually paid up in money prior to registration."

SEC. 3. Portion of capital paid before commencing business.-A company limited by shares shall not commence business or exercise any borrowing powers unless and until one-third of the shares shall have been subscribed for and one-fourth of the subscribed capital shall have been actually paid up in money or value received.?

SEC. 4. Reduction of capital.--The capital of a company may be reduced by a special resolution confirmed by the court. Any company limited by shares may by special resolution, though not confirmed by the court

, reduce its capital by canceling any shares which have been forfeited or which have not been taken nor agreed to be taken. 4

Sec. 5. Shares at a premium.—No shares in a company shall be issued by the directors at a premium until the company shall have been established at least one year.5

Sec. 6. Forfeiture of shares on nonpayment of calls.Shares become forfeited on the nonpayment of calls, and after due advertisement are sold at auction and the calls and expenses paid from the proceeds, and any excess is returned to the shareholder. 6



SEC. 7. Memorandum of association filed.To form a corporation 5 or more persons must sign a memorandum of association and file it with the registrar-general.? If it is to be an unlimited company or a company limited by guaranty,8 articles of association must be signed and filed likewise. If it is to be a no-liability company, before its incorporation one-fourth of its shares must be subscribed for and one-half paid on them in cash.1

SEC. 8. Contents of memorandum of association.—The memorandum of association must state, in case of an unlimited company, its name and object; 12 in case of a no liability company, the name, object, number of shares, amount paid on each share, and number of shares subscribed for of the company the names, addresses, and occupations of the shareholders and the number of shares held by each;13 in case of a company limited by shares, the name, object, and number of shares of the company, and the amount of capital with which it proposes to be registered, that the members' liability is limited, 14 and the number of shares that each will take; in case of a company limited by guaranty, the name and object of the company and the liability of members. 15 Except as expressly provided by law, the memorandum of association can not be changed. 16 The articles of association prescribe the rules and regulations of the company, and may be changed at the pleasure of the members. 17

SEC. 9. Restrictions on promoters.-Every promoter is in a fiduciary relation toward a company which he is engaged in promoting, and consequently (a) a promoter may not sell or let his own property, or property in which he has an interest, to the company, and may not be interested in any contract with the company, unless at a general meeting of the company before the completion of the purchase, lease, or contract a full and fair disclosure is made that he is the vendor or lessor of or has an interest in the property or in the contract, and of the nature and amount of that interest; (6) and such contract as aforesaid with respect to which such disclosure is not made shall be voidable at the option of the company; (c) a promoter may not retain for his own

1 Companies act, 1896, sec. 6, subd. a.
2 Companies act, 1896, sec. 21, subd. 1.
3 Companies act, 1896, secs. 88–101.
4 Companies amendment act, 1892, sec. 9.
5 Companies act, 1890, sec. 49, subd. 1.
© Companies act, 1890, secs. 241, 242, and companies act, 1896, secs. 10–16.
7See post, sec. 39.
8 See post, sec. 13, subd. 6.
9See post, sec. 39, subd. 4.
10 See post, sec. 13, subd. 4.
il Companies act, 1896, sec. 6, subd. (a).
12 Companies act, 1890, sec. 11.
13 Companies act, 1896, sec. 6, subd. (b)
14 Companies act, 1890, sec. 7.
15 Companies act, 1890, sec. 10.
16 Companies act, 1890, sec. 13, and 1896, sec. 84
17 Companies act, 1890, sec. 14.

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