CHAPTER V REGISTER OF MEMBERS AND TRANSFER AND TRANSMISSION OF SHARES REGISTER OF MEMBERS.1 Every Company incorporated under the Companies Acts is required to keep in one or more books a register of its members, and there must, under certain penalties, be entered in the register the particulars specified in sec. 25 of the Act of 1862.2 As the register is prima facie evidence of any matters directed or authorised to be inserted therein, and are so inserted, the prescribed form of keeping the register must be strictly complied with. Again, so long as the name of a person appears on the register, he is liable as a shareholder; and in the event of any claim being preferred against him, the burden of proving that he is not liable is upon him. The register is the only evidence by which the rights of members to vote at a general meeting can be ascertained. Inspection of Register.-Sec. 32 of the Act of 18622 contains the regulations as to the inspection of the register of members. The register is required to be kept at the registered office of the Company, and any member is entitled to inspect it free of charge. Any other person is entitled to inspect the register on the payment of one shilling, or such less sum as the Company may prescribe for each inspection. Every member, or any person not a member, may require a copy of 1 For definition of members, see Act of 1862, sec. 23. 2 See Appendix. the register or any part thereof from the Company, who are bound to supply it on payment of sixpence for every hundred words required to be copied. But any person inspecting the register, and paying the fee for inspection, where chargeable, is entitled to make copies without any additional charge. The fact that a person has become a member of a Company at the instance of a rival Company, and for the purpose of serving the interests of such Company, does not deprive him of the right to this statutory privilege.1 Power of Companies to keep Colonial Registers. Any Company whose objects comprise the transaction of business in a colony may, if authorised so to do by its regulations as originally framed, or as altered by special resolution, cause to be kept, in any colony in which it transacts business, a branch register or registers of members resident in such colony. The regulations for keeping the register and relative procedure are contained in "The Companies (Colonial Registers) Act, 1883." 2 Power to close Register.-Any Company may, upon giving notice by advertisement in some newspaper circulating in the district in which the registered office of the Company is situated, close the register of members for any time or times not exceeding in the whole thirty days in each year. 3 Entry of Trusts on Register.-In the case of Companies registered in England or Ireland, no notice of any trust, express, implied, or constructive, can be entered on the register. With Scots Companies it is otherwise. Trusts are recognised, and trustees are registered as such, but the liability of the persons so registered in Scotland is the same as if they had been registered in their individual capacity; were it otherwise the trustees would be registered with qualified liability, which is foreign to the spirit of the Companies Acts. The reason for permitting trustees to be registered as such is to identify the shares as belonging to the trust, and safeguard the interests of beneficiaries. 1 Mutter v. Eastern and Midlands Railway Co., 1888, 38 Ch. D. 92. With regard to the position of persons acting in a representative capacity, such as a trustee in bankruptcy, judicial factor, or the like, such persons incur the same personal liability as a trustee under a testamentary settlement if they go upon the register of shareholders. It is not, however, necessary for them to do so, the noting of their title being sufficient to enable them to sell the shares or draw the dividends. RECTIFICATION OF REGISTER.-Remedy for improper Entry or Omission of Entry in Register.—If the name of any person is, without sufficient cause, entered in or omitted from the register of members of any Company, or if default is made, or unnecessary delay takes place in entering on the register the fact of any person having ceased to be a member of the Company, the person or member aggrieved, or any member of the Company, or the Company itself, may in a summary manner take proceedings to have the register rectified.1 Such proceedings in Scotland must be in the Court of Session. It is a matter of discretion whether the Court will exercise in any particular case the summary jurisdiction conferred in the section of the Act just referred to, and no precise line can be drawn between the cases that are suitable for disposal in a summary form and those which are more appropriate for trial by action of declarator or reduction. The hypothesis of the section under discussion is that when a mistake has been made in entering the name of someone on the register, or in omitting to make the necessary entry, it can be corrected upon the facts being brought under the notice of the Court. When the right of the party claiming to be put on the register, or to be taken off, depends on written documents, it may be on a contract to take shares, or a contract to transfer shares, or upon the question whether the directors have the power to decline to accept a transferee, or any other consideration which admits of instant verification from documents, it is the practice of the Court to dispose of such questions under an application founded on the section referred to. Cases have been 1 Act 1862, sec. 35. disposed of under the section where the facts alleged were that the petitioner had been induced to take shares by material misrepresentations on the part of those acting for the Company, made in the knowledge that they were untrue.1 One case was disposed of where a person sought to have his name deleted from the register on the ground that certain of the shares of which he was registered as proprietor had been issued to him at a discount.2 But the jurisdiction is not meant to be substituted for the ordinary jurisdiction of the Court, where the matters in controversy depend upon fact, and raise questions extrinsic to the proper object of the petition —the rectification of the register. Hence in a case where a petition was presented under this section by certain shareholders in a Company craving the Court to order that the register of the Company should be rectified by deleting therefrom the names of certain shareholders in respect that their shares had been illegally allotted to them as promotion money, the Court, without expressing an opinion as to the competency of such an action, held that a petition under the section was a very inappropriate and inconvenient way of dealing with the questions raised, and that the proper course for the petitioners was to raise an action of reduction in ordinary form, pending the raising of which the petition was sisted.3 Where a winding-up order has been made, the Court has power to rectify the register.4 The order to rectify the register must be notified to the Registrar of Joint Stock Companies.5 Rectification of Register by Directors.-The directors have power at their own hand to rectify the register so as to correct any merely clerical mistake that may have been made. 1 Blakiston v. London and Scottish Banking and Discount Corporation Ltd., 1894, 21 R. 417. 2 Klench v. East India Co. for Mining and Exploration Ltd., 1888, 16 R. 271. 3 Blaikie and Others v. Coats and Others (The British Mexican Railway Co.), 1893, 21 R. 150. 4 Act 1862, sec. 98. 5 Ibid. sec. 36. ANNUAL LIST OF MEMBERS.1-Every Company having a capital divided into shares must under certain specified penalties make, once at least in every year, a list of all persons who, on the fourteenth day succeeding the day on which the ordinary general meeting, or if there is more than one ordinary meeting in each year, the first of such ordinary general meetings, is held, are members of the Company. Such list must state the names, addresses, and occupations of all the members therein mentioned, and the number of shares held by each of them, and must contain a summary giving certain specified details. The summary must be framed so as to distinguish between the shares issued for cash and the shares issued otherwise than for cash or only partly for cash, and must further specify the particulars required by sec. 19 of the Act of 1900. The list and summary are to be contained in a separate part of the register, and be completed within seven days after the fourteenth day above mentioned. A copy 2 requires to be forwarded to the Registrar of Joint Stock Companies, signed by the manager or by the secretary of the Company; and this can be examined at his office by anyone on payment of 1s. The return is required to be made on an authorised form, and stamped with a registration fee stamp of 5s. In Scotland the forms can be obtained from Messrs. J. Oswald & Son, H.M. Register House, Edinburgh, or at the Post Office, Parliament Square, Edinburgh. Power of Registrar to strike Name of Company off Register. -Besides the penalties which are incurred by a failure to comply with the statutory provisions as to the filing of the annual return, the Registrar has, under certain circumstances, power to strike the name of a Company off the register. The procedure necessary for this purpose, and the circumstances in which the course is justifiable, are specified in sec. 7 of the Act of 1880, and sec. 26 of the Act of 1900.3 1 Act 1862, secs. 26 and 27, as extended by Act 1900, sec. 19. 2 As to penalty for false statement, Act 1900, sec. 28. 3 For which see Appendix, |