Registrar called "Statement of Nominal Capital." Upon this, stamp duty is payable at the rate of 5s. for every £100 and any fraction of £100 over any multiple of £100 on the nominal capital of the Company. Penalties are imposed for non-compliance with this provision.1 REGISTRATION OF MEMORANDUM AND ARTICLES OF AssoCIATION. The Memorandum and Articles of Association are registered at the office of the Registrar of Joint Stock Companies in London, Edinburgh, or Dublin, according to the place where the registered office of the Company is situated. If everything is found in order, the Registrar subsequently issues a certificate that the Company has been duly incorporated under the Acts, and that the Company is "Limited." The incorporation of the Company takes effect from the date of incorporation mentioned in the certificate. Effect of Certificate.—The certificate of the Registrar is conclusive evidence that all the requisitions of the Acts in respect of registration, and of matters precedent and incidental thereto, have been complied with. This provision, introduced by the Act of 1900, will, it is thought, prevent any certificate being set aside on the ground that the Memorandum has not been signed by the requisite number, or that certain of the signatures are forged. A statutory declaration by a solicitor engaged in the formation of the Company, or by a director or secretary, of compliance with all or any of the requisitions, is required to be produced to the Registrar, who may accept the declaration as sufficient evidence of such compliance.2 (As to effect of Registration, see sec. 18 of Act of 1862.) Lost Certificate or additional Certificate required.-Any person may demand from the Registrar a certificate of the incorporation of a Company on payment of a fee not exceeding 5s,3 Such certificate is received in evidence 1 Stamp Act, 1891, sec. 112, as altered by Finance Act, 1899, sec. 7. in all legal proceedings, civil or criminal, as if it were the original document.1 COMPANIES LIMITED BY GUARANTEE Companies limited by guarantee afford a convenient form for clubs and associations not requiring the capital or the interests of the members to be expressed in cash terms; and while in practice the use of this form of incorporation is almost exclusively taken advantage of by such associations, there is nothing impracticable or incompetent in its adoption by trading and other Companies. Where a Company is formed on the principle of having the liability of its members limited by guarantee, the amount for which a member is responsible is a sum not exceeding a specified amount which he undertakes to contribute to the assets of the Company in the event of the same being wound up during the time that he is a member, or within one year afterwards, for payment of the debts and liabilities of the Company contracted before the time at which he ceased to be a member, and of the costs, charges, and expenses of winding up the Company, and for the adjustment of the rights of the contributories among themselves.2 The amount of the liability is required to be stated in the fourth Article of the Memorandum of Association at so much per member, but there is no limit to the sum the members may so subscribe. In the winding up of a Company limited by guarantee, a member is only liable to be placed on the list of contributories in respect of the amount which by the Memorandum he has undertaken to contribute in the event of its being wound up. Although he may be sued for sums which he is only bound to pay under the Articles, he is not liable as a contributory in respect of such sums.3 When a member retires and his place 1 Act 1877, sec. 6. 2 Act 1862, sec. 9. In re Bangor and North Wales Mutual Marine Protection Association, 1899, 2 Ch. 593. is not taken up by another, the position of the creditors of the Company is thereby weakened to the extent of that member's guarantee. Section 9 of the Act of 1862 specifies what is to be contained in the Memorandum, and in the Second Schedule to the Act models (Forms B and C) are given of Memoranda and Articles of Association. In this connection there is a difference between Companies limited by shares and Companies limited by guarantee, that whereas in the former case Articles of Association need not accompany the Memorandum when lodged for registration, in the latter case the Memorandum must be accompanied by Articles, and these must be printed. The Act of 1862 contemplates two classes of Companies limited by guarantee, viz. Companies either having or not having a capital divided into shares. In both cases the amount of the guarantee of the members alone requires to be stated in the Memorandum. In the case of a Company not having a capital divided into shares, the Articles must state the number of members with which the Company proposes to be registered, for the purpose of enabling the Registrar to determine the fees payable on registration.1 Where in the Articles provision is made for the division of the undertaking into shares or interests, and for the transmission of such shares, although not special provision is made for a share capital, it would now seem that Companies with such regulations must be regarded as having a capital divided into shares.2 Every provision in the Memorandum or Articles of Association or in any resolution of a Company registered after the 1st January 1901, purporting to give any person a right to participate in the divisible profits of the Company otherwise than as a member, is void.3 Under the Act of 1862, when a Company had a capital divided into shares, the Articles alone required to specify the amount of the capital and the shares into which that capital was divided, with this result, that the Company could by special 3 Act 1900, sec. 27 (3). 1 Sec. 14. 2 Act 1900, sec. 27 (2). resolution alter the capital of the Company from time to time 1 without the necessity of applying to the Court for confirmation, as is necessary in the case of a Company limited by shares where an alteration of the capital necessitates an alteration of the Memorandum. An important alteration in the law in this respect has been made by the Companies Act, 1900, which provides that no Company limited by guarantee, registered after 1st January 1901, shall be capable of having a capital divided into shares, unless the Memorandum of Association so provides and specifies the amount of its capital (subject to increase or reduction in accordance with the Companies Act) and the number of shares into which the capital is divided. Such Companies must pay before registration ad valorem duty on the nominal amount of their share capital in the same way as Companies limited by shares.3 BOOKS REQUIRED ΤΟ BE KEPT. -The following are the statutory requirements as to the books to be kept by Companies limited by guarantee, and they are all contained in the Act of 1862, viz.: (1) Register of Members (sec. 25); (2) Register of Mortgages (sec. 43); (3) where the Company has not a capital divided into shares, a Register containing the names, addresses, and the occupations for the time being of its directors and managers (sec. 45). A penalty for failure to observe this provision is contained in sec. 46. RETURNS TO BE MADE TO REGISTRAR.—(1) Notice of the situation of the registered office (sec. 40). (2) A copy of every special resolution passed by the Company. Where the Company has not a capital divided into shares, the following returns require also to be made :- -(1) Notice of any increase in the number of members beyond the registered number (sec. 34). (2) A copy of the Register above referred to (number 3). Where the Company has a capital divided into shares, the returns to be made are the same as those for ordinary Companies limited by shares. ASSOCIATIONS FORMED FOR PURPOSES NOT OF GAIN If a Company about to be formed proves to the Board of Trade that it is formed for the purpose of promoting commerce, art, science, religion, charity, or any other useful object, and that it is the intention of such association to apply the profits, if any, or other income of the association, in promoting its objects, and to prohibit the payment of any dividend to the members of the association, the Board of Trade may, by licence, direct such association to be registered with limited liability, without the addition of the word limited to its name.1 HOW TO OBTAIN THE LICENCE OF THE BOARD OF TRADE. -Two copies, printed on foolscap paper, of the proposed Memorandum and Articles of Association must, before being signed, be submitted for the consideration of the Board of Trade. The names, designations, and addresses of the promoters of the Company, or the persons who will sign the Memorandum and Articles of Association, must also be sent. The fees to counsel, usually five guineas, for revising the Memorandum and Articles on behalf of the Board of Trade, should accompany the application. When the deed has been approved of by the Board of Trade, one of the copies is returned with such amendments as the Board considers necessary. At the same time an order is made requiring the application to be advertised in one or more newspapers circulating in the district where the Company proposes to carry on its operations. If no objection is made within the stipulated time, or if an objection is repelled, and on the Board's requirements being satisfied, a licence is granted. When the Memorandum and Articles have been signed and stamped they and the licence by the Board of Trade and a notice of the situation of the registered office of the Company, are sent to the Registrar of Joint Stock Companies. 1 For particulars applicable to such Companies, see Act 1867, sec. 23. |