OSMANIA UNIVERSITY LIBRARY?Y ffCall No. ' Accession No 7

'

Title ' ieMA*t&>tiLJUt Ol *et-YUZ4

A MANUAL OFSECRETARIAL PRACTICE

First Edition . . November 1928Second Edition . . July 1930

Second Edition (Reprint) . August 1971Third Edition . . . October 1935Fourth Edition . September 1937

Fifth Edition . . September 1930

Fifth Edition (Reprint) . July 1946

Fifth Edition (Reprint) . May 1947

A Manualof

Secretarial Practice

BY

F. D. HEAD, B.A. (Oxon.)Barnster-at'Law

F. PORTER FAUSSET, M.A. (Cantab.), LL.B.Barnster-at-Law

AND

H. A. R.J.WILSON, F.C.A., F.S.A.A., F.C.C.S., ETC .(.of Messrs. Wilson, Bigg f Co., Chartered Accountants]

Fifth Edition

PUBLISHED UNDER THE AUTHORITY OF THE COUNCIL

OF

Corporation of Certified SecretariesLimited (by Qwurante*)

BY

MACDONALD & EVANS,8 JOHN STREET, BEDFORD Row, LONDON, W.C.i

1947

PRINTED IN GREAT BRITAIN BYRICHARD Ci AY AND COMPANY, LTD.,

BUNT.AY, SUFFOLK,

FOREWORDTHE Council of the Corporation of Certified Secretaries

has been concerned to obtain an authoritative work which itcould recommend to its members and students as a text bookfor study by those seeking to attain full membership of theCorporation, and a workCoifi reifiHfilBB^r members alreadyqualified and in actual practice of their Profession. Aftercareful consideration the Council has now adopted as its stand-ard text book this work, written by F. D. Head, B.A. (Oxon.),Barrister-at-Law, F. Porter Fausset, M.A. (Cantab.), LL.B.,Barrister-at-Law, and H. A. R. J. Wilson, F.C.A., F.S.A.A.,F.C.C.S.

This book seems to us to satisfy the requirements of theCouncil, and we confidently commend it to the attention oimembers and students.

IDDESLEIGH,President.

J. ALLEN WATSON,Chairman of the Council.

GEORGE R. DBYSDALE,Secretary.

SECRETARIES' HALL,28, FITZROY SQUARE,

LONDON, W. 1.

July 1st, 1938.

PREFACEIT is a great satisfaction to the authors of this work that

the first large edition has been exhausted so quickly, especiallyas it was written at a time when new company legislation waspending, and it might have been supposed that students wouldhave been disinclined to purchase a text-book based upon thelaw as it then stood. Notwithstanding this drawback, it isclear that the work has amply satisfied the needs of students.

Since the book was first written, company law has beenamended by the Companies Act, 1928, and still further amendedand consolidated by the Companies Act, 1929. The passing ofthese Acts has necessitated a complete revision and re-settingof the book. This new edition, the second, which is practicallya new book, is now offered to students in the confident hopethat it will not only pilot them through their examinations,but prove also a valuable aid in their everyday secretarialwork.

F. D. H.

F. P. F.

H. A. R. J. W.July 16, 1930.

PREFACE TO THE FIFTH EDITIONTHE continued popularity of this work having called for

a new edition, we have reviewed the whole text, and havemade such alterations as seemed to be advisable. In addition,we have brought the text up-to-date with the latest practiceand legislation.

F. P. F.

H. A. R. J. W.Sept. 30, 1939.

CONTENTSOHAP. PAGE

TABLE OF CASES..--.. .XI. INTRODUCTION ...... 1

II. THE JOINT STOCK COMPANY .... 8

III. INCORPORATION AND FLOTATION OF A COMPANYLIMITED BY SHARES...... 23

IV. THE MEMORANDUM. ARTICLES OF ASSOCIATION.FOREIGN COMPANIES ..... 32

V. CAPITAL. SHARES. DEBENTURES. PROSPECTUS.UNDERWRITING. ETC. ..... 67

VI. MEMBERSHIP OF A COMPANY. PAYMENT FORSHARES. APPLICATION AND ALLOTMENT OFSHARES. CALLS. ANNUAL RETURN. DOMINIONREGISTER. SHARE WARRANTS. LIEN. ETC. . 122

VII. THE TRANSFER. TRANSMISSION AND FORFEITUREOF SHARES ....... 171

VIII. DIRECTORS ........ 212

IX. COMPANY AND DIRECTORS* MEETINGS. NOTICES.QUORUM. VOTING. POLL. PROXIES. RESOLUTIONS.AGENDA. MINUTES ...... 284

X. ACCOUNTS. FINANCIAL REPORTS .... 285

XI. AUDIT AND INVESTIGATIONS . 806

XII. DIVISIBLE PROFITS. DIVIDENDS .... 322

XIII. BORROWING POWERS. RECEIVERS . . . 351

XIV. ARRANGEMENTS AND RECONSTRUCTIONS. AMALGA-MATIONS AND ABSORPTIONS .... 387

XV. OFFICE ORGANISATION AND MANAGEMENT . . 403

XVI. MECHANICAL DEVICES ...... 428

XVII. PRECIS WRITING AND REPORTS .... 440ix

x CONTENTSOHAP. PAGE

XVIII. POWERS OF ATTORNEY 444

XIX. THE LEGAL POSITION OF THE SECRETARY . . 457

XX. INSURANCE 467

XXI. STATUTORY COMPANIES 475

XXII. WINDING UP 504

XXIII. STAMP DUTIES 580

XXIV. INCOME TAX 608

APPENDIX

I. RETURNS, ETC., AND PENALTIES IMPOSED BY THECOMPANIES ACTS, 1929 620

II. TABLE A. FIRST SCHEDULE TO THE COMPANIES

(CONSOLIDATION) ACT, 1908 . . . 652

III. TABLE A. FIRST SCHEDULE TO THE COMPANIES

ACT, 1929 666

IV. STOCK EXCHANGE REGULATIONS AS TO NEW ISSUESAND OFFICIAL QUOTATIONS .... 679

V. FORMS 691

INDEX......... 736

TABLE OF CASESPAQB

AERATORS, LTD. v. TOLLIT [1902], 2 Ch. 319 36AFRICAN ASSOCIATION AND ALLEN, In Re [1910], 1 K.B. 396 ... 464ALABAMA, NEW ORLEANS, ETC. RAILWAY Co., In Re [1891], 1 Ch.

213 401ALEXANDER v. AUTOMATIC TELEPHONE Co. [1900], 2 Ch. 56 123, 221ALEXANDER v. SIZER [1869], L.R. 4, Ex. 102 459ALLEN v. GOLD REEFS OF WEST AFRICA [1900], 1 Ch. 656

167, 203, 248ALLEN CRAIG & Co. (London), In Re [1934], Ch. 483 313AMALGAMATED SYNDICATE, In Re [1897], 2 Ch. 600 43AMERICAN PIONEER LEATHER Co. [1918], 1 Ch. 556 509AMMONIA SODA Co. v. CHAMBERLAIN [1918], 1 Ch. 266

325, 326, 327, 331ANDERSON'S CASE [1868], 8 Eq. 509 194ANDREW v. ZINC MINES, LTD. [1918], 2 K.B. 454 117ANDREWS v. GAS METER Co. [1897], 1 Ch. 361 68, 82ANGLO-CONTINENTAL SUPPLY Co., LTD., In Re [1922], 2 Ch. 723 401ANGLO-SPANISH TARTAR REFINERIES [1924], W.N. 222 399ARIZONA COPPER Co. [1926], S.C. 315 90ARNISON v. SMITH [1889], 41 Ch.D. 348 107ARTISAN'S LAND AND MORTGAGE CORPORATION [1904], 1 Ch. 796 ... 332ASHBURY RAILWAY CARRIAGE AND IRON Co. v. RICHE [1875],

7H.L. 653 33,42ASHBURY v. WATSON [1885], 30 Ch.D. 376 48,68ASTLEY v. NEW TIVOLI Co. [1899], 1 Ch. 151 225ATKINS & Co. v. WARDLE [1889], 61 L.T. 23; 58 L.J., Q.B. 377

227, 460ATTORNEY-GENERAL v. HIGGINS [1857], 2 H. & N. 351 175ATTORNEY-GENERAL v. NEW YORK BREWERIES [1899], App.

Cas. 62 201

BAHIA AND SAN FRANCISCO RAILWAY Co., In Re [1868], 3 Q.B.584 148

BAINBRIDGE v. SMITH [1889], 41 Ch.D. 462 227BALAGHAT GOLD MINING Co., In Re [1901], 2 K.B. 665 127BALKIS CONSOLIDATED Co. v. TOMKINSON [1893], App. Cas. 396 ... 148BARNETT, HoARES, v. SOUTH LONDON TRAMWAYS [1887], 18

Q.B.D. 815 457BARRY & STAINES LINOLEUM, In Re [1934], Ch. 227 217BARTLETT v. MAYFAIR PROPERTY Co. [1898], 2 Ch. 28 ... 153, 355

xi

xii TABLE OF CASESPAGE

BECHUANALAND EXPLORATION Co. v. LONDON TRADING BANK[1898], 2 Q.B. 658 359

BECKWITH, Ex parte, NEW BRITISH IRON Co., In Re [1898], 1 Ch.324 33,53

BEETON & Co., LTD., In Re [1913], 2 Ch. 279 ... 223, 559, 560BELLERBY v. ROWLAND AND MARWOOD STEAMSHIP Co. [1902],

2Ch. 14 208, 211aBENSON v. HEATHORN [1842] 1 Y. & C. 326 230BERKELEY v. HARDY [1826], 5 B & C. 355 184BERRY AND STEWART v. TOTTENHAM HOTSPUR FOOTBALL AND

ATHLETIC Co. [1935], Ch. 718 174BISGOOD v. HENDERSON'S TRANSVAAL ESTATES, LTD. [1908], 1 Ch.

743 389,393BISHOP v. BALKIS CONSOLIDATED Co. [1890], 25 Q.B.D. 512 ... 179BLACKBURN BUILDING SOCIETY v. CUNLIFFE, BROOKS & Co. [1882],

22Ch.D. 61 355,357BLAIR OPEN HEARTH Co. [1914], A.C. 390 105BODEGA Co. LTD., In Re [1904], 1 Ch. 276 216BOLTON v. NATAL LAND AND COLONISATION Co. [1892], 2 Ch. 124 328BOLTON ex parte NORTH BRITISH ARTIFICIAL SILK, In Re

[1930], 2 Ch. 45 209BOND v. BARROW HAEMATITE STEEL Co. [1902], 1 Ch. 358 327, 329BOOTH v. WALKDEN SPINNING Co. [1909], 2 K.B. 368 399BORLAND'S TRUSTEE v. STEEL BROS. [1901], 1 Ch. 279 67BOSCHOEK PROPRIETARY Co. v. FUKE [1906], 1 Ch. 148 222, 223, 224BOSTON DEEP SEA FISHING, ETC. Co. v. ANSELL [1888], 39 Ch.D.

339 53BOWMAN v. SECULAR SOCIETY, LTD. [1917], A.C. 406 12BRADFORD BANKING Co. v. BRIQGS, SON & Co. [1886], 12 App. Cas.

29 168, 169BRASSARD v. SMITH [1925], App. Cas. 371 175BRAZILIAN RUBBER PLANTATIONS AND ESTATES, In Re [1911],

1 Ch. 425 229, 233aBRINSMEAD, T. E., & SONS, In Re [1897], 1 Ch. 45 509BRITISH BUILDING STONE Co., In Re [1908], 2 Ch. 450 393BRITISH MURAC RUBBER SYNDICATE v. THE ALPERTON RUBBER

Co. [1915], 2 Ch. 186 62BRITISH THOMSON-HOUSTON Co. v. FEDERATED EUROPEAN BANK

[1932], 2 K.B. 176 221BROWN v. BRITISH ABRASIVE WHEEL Co. [1919], 1 Ch. 290 ... 62BROWNE v. LA TRINIDAD [1887], 37 Ch.D. 1 53BRYANT v. LA BANQUE DU PEUPLE [1893], A.C. 170 ... 448, 453BULAWAYO MARKET AND OFFICES Co., In Re [1907], 2 Ch. 468 ... 212BURKINSHAW v. NICOLLS [1878], 3 App. Cas. 1004 148BURNHAM v. ATLANTIC AND PACIFIC FIBRE, ETC. Co. [1928], Ch.

836 339BURNS AND HAMBRO v. SIEMENS BROS. DYNAMO WORKS [1919],

1 Ch. 225 129BURT, BOULTON AND HAYWARD v. BULL [1895], 1. Q.B. 276 ... 384BURTON v. BEVAN [1908], 2 Ch. 240 120

TABLE OF CASES xiiiPAGE

CAIRNEY v. BACK [1906], 2 K.B. 746 466,660CALDWELL v. CALDWELL & Co., LTD. [1916], Sess. Cas. 120 ... 88CAJDLAO Bis Co., In Re [1889], 42 Ch.D. 169 393CAMMELL, Ex parte [1894], 2 Ch. 292 137CAMPBELL v. MAUND [1836], 5 A. & E. 865 258CANADIAN OILWORKS CORPORATION, In Re, HAY'S CASE [1875],

10 Ch. App. Cas. 593 216CANNING JARRAH TIMBER Co. (WESTERN AUSTRALIA), LTD., In Re

[1900], 1 Ch. 708 401CARIDAD COPPER MINING Co. v. SWALLOW [1902], 2 K.B. 44 ... 223CARRUTH v. IMPERIAL CHEMICAL INDUSTRIES [1936], 1 Ch 587 and

[1937], 53T.L.R. 524 89CASTELL AND BROWN, LTD., In Re [1898], 1 Ch. 315 361CAWLEY & Co., In Re [1889], 42 Ch. 209 279CHANNEL COLLIERIES TRUST v. DOVER, ETC. LIGHT RAILWAY

Co. [1914], 1 Ch. 568 485CHAPMAN'S CASE, GENERAL ROLLING STOCK Co., In Re [1866],

1 Eq. 346, 404 464CHATENAY v. BRAZILIAN SUBMARINE TELEGRAPH Co. [1891],

1 Q.B. 79 445CHIDA MINES, LTD. v. ANDERSON [1905], 22 T.L.K. 27 185CITIZEN LIFE ASSURANCE COMPANY v. BROWN [1914], A.C. 423 ... 463CITY EQUITABLE FIRE INSURANCE Co., In Re [1924], T.L.R. 853;

[1925], 1 Ch. 407 233a, 310CLARK v. WORKMAN [1920], 1 I.R. 107 221CLARKE AND CHAPMAN v. HART [1858], 6 H.L.C. 650 ... 208, 209CLINCH v. FINANCIAL CORPORATION [1868], 4 Ch. App. 117 ... 392COALPORT CHINA Co., In Re [1895], 2 Ch. 404 193COLAROY Co. v. GIFFARD [1928], 1 Ch. 144 71COLISEUM (BARROW), In Re [1930], 2 Ch. 44 223COLLEN v. WRIGHT [1857], 8 E. and B. 647 228,456COLONIAL GOLD REEF, LTD. v. FREE STATE RAND [1914], 1 Ch.

382 260,444COLONIAL TRUSTS CORPORATION, In Re [1879], 15 Ch.D. 465 ... 361CONCESSIONS TRUST, In #e [1896], 2 Ch. 757 179CONSOLIDATED SOUTH RAND MINES DEEP, LTD., In Re [1909],

1 Ch. 491 393COPAL VARNISH Co., In Re [1917], 2 Ch. 349 174CORPORATION AGENCIES v. HOME BANK OF CANADA [1927], A.C. 318 450COTMAN v. BROUGHAM [1918], A.C. 514 43COUNTY OF GLOUCESTER BANK v. RUDRY MERTHYR, ETC. Co.

[1895], 1 Ch. 629 256COUSINS v. INTERNATIONAL BRICK Co. [1931], 2 Ch. 90 260Cox v. EDINBURGH AND DISTRICT TRAMWAYS Co. [1898], S.C. of

Sess. 331CREE v. SOMERVAIL [1879], 4 App. Cas. 648 186CREYKE'S CASE, BLAKELY ORDNANCE Co., In Re [1869], 5 Ch. App.

Cas. 63 209GROOM'S CASE [1873], 16 Eq. 417 105CROSS v. IMPERIAL CONTINENTAL GAS ASSOCIATION [1923], 2 Ch.

553 490

xiv TABLE OF CASESPAGB

CUFF v. LONDON AND COUNTY LAND, ETC. Co., LTD. [1912],1 Ch. 440 309

CURRIE v. CONSOLIDATED KENT COLLIERIES CORPORATION [1906],1 K.B. 134 518

CYCLISTS' TOURING CLUB, In Re [1907], 1 Ch. 269 46

DAFEN TINPLATE Co., LTD. v. LLANELLY STEEL Co. [1920],2 Ch. 124 53

DAILY TELEGRAPH Co. v. MCLAUGHLIN [1904], A.C. 776 447DANBY v. COUTTS & Co. [1885], 29 Ch.D. 500 448DAVIES v. GAS LIGHT AND COKE Co. [1909], 1 Ch. 248 127DE BEERS CONSOLIDATED MINES v. HOWE [1906], App. Cas. 455 610DE PASS'S CASE, MEXICAN AND SOUTH AMERICAN Co., In Re

[1868], 4 De G. & J. 544 174DEELEY v. LLOYDS BANK, LTD. [1912], App. Cas. 756 378DERBY v. PEEK [1889], 14 App. Cas. 337 107DEUCHAR v. GAS LIGHT AND COKE Co. [1925], A.C. 691 476DEVAYNES v. NOBLE, CLAYTON'S CASE [1816], 1 Mor. 572 ... 378DISCOVERER'S FINANCE CORPORATION, In Re, LINDLAR'S CASE

[1910], 1 Ch. 207, 312 173DIXON v. KBNNAWAY & Co. [1900], 1 Ch. 833 193DOMINION TAR AND CHEMICAL Co. [1929], 2 Ch. 387 71DOVEY v. CORY [1901], App. Cas. 477 229, 324, 325DREW v. NUNN [1878], 4 Q.B.D. 667 453DUNSTAN v. IMPERIAL GAS, ETC. Co. [1832], 3 Bar. & Ad. 125 ... 223DUTTON v. MARSH [1871], 6 Q.B. 361 228

EARLE'S SHIPBUILDING AND ENGINEERING Co. [1901], W.N. 78 659EAST v. BENNETT BROTHERS [1911], 1 Ch. 163 234EAST PANT Du UNITED LEAD Co. v. MERRYWEATHER [1864],

13W.R. 216 256EASTERN UNION RAILWAY Co. v. SYMONS [1860], 5 Ex. 237 ... 333EDELSTEIN v. SCHULER [1902], 2 K.B. 144 359EDWARDS v. RANSOMES & RAPIER [1930], 143 L.T. 594 204EGYPTIAN DELTA LAND AND INVESTMENT Co. v. TODD [1929],

A.C.I 610EGYPTIAN HOTELS v. MITCHELL [1915], App. Cas. 1022 610ELEY v. POSITIVE GOVERNMENT SECURITY LIFE ASSURANCE Co.

[1876], 1 Ex.D. 88 33,63ENGLISH AND SCOTTISH, ETC. INVESTMENT Co. v. BRUNTON [1892],

2 Q.B. 700 361ERNEST v. LOMA Co. [1897], 1 Ch. 1 258ESPUELA LAND AND CATTLE Co., In Re (No. 2) [1909], 2 Ch. 187 71EVANS' CASE, LONDON, HAMBURGH, ETC. BANK, In Re [1867],

2 App. Cas. 427 123EVANS v. RIVAL GRANITE QUARRIES [1910], 2 K.B. 979 361EVERITT v. AUTOMATIC WEIGHING MACHINE Co. [1892], 3 Ch. 506 168EXCHANGE TRUST, LTD., In Re, LARKWORTHY'S CASE [1903],

1 Ch. 711 210

TABLE OF CASES xvPAGE

EXPRESS ENGINEERING WORKS, In Re [1920], 1 Ch. 466 ... 250, 399EYRE v. MILTON PROPRIETARY, LTD. [1936], Ch. 244 228

FAURE ELECTRIC ACCUMULATOR Co. v. PHILLIPART [1888],58 L.T. 525 256

FENWICK, STOBART & Co., In Re [1902], 1 Ch. 507 464FIRBANK'S EXECUTORS v. HUMPHREYS [1887], 18 Q.13. 54 ... 357FIREPROOF DOORS, In Re [1916], 2 Ch. 142 256, 279FISHER v. BLACK AND WHITE PUBLISHING Co. [1901], 1 Ch. 174... 51FOOD CONTROLLER v. CORK [1923], A.C. 047 560FOREST OF DEAN COAL MINING Co., In Re [1878], 10 Ch.D.

450 212, 229, 230FOSTER v. NEW TRINIDAD LAKE ASPHALT Co. [1901], 1 Ch. 208 326FOWLER v. BROAD'S PATENT NIGHT LIGHT Co. [1893], 1 Ch, 724... 385FRITH v. FRITH [1906], A.C. 254 451

GALLOWAY v. SCHILL, SEEBOHM & Co. [1912], 2 K.B. 354 ... 291GARDEN GULLY UNITED, ETC. MINING Co. v. McLiSTER [1875],

lApp. Cas. 39 210GARDNER v. IREDALE [1912], 1 Ch. 700 131GENERAL AUCTION ESTATE, ETC. Co. v. SMITH [1891], 3 Ch. 432... 355GENERAL COMPANY FOR THE PROMOTION OF LAND CREDIT [1870],

5 Ch.D. 363 49GENERAL EXCHANGE BANK, In Re [1871], 6 Ch. App. 818 ... 168GENERAL MOTOR CAB Co., In Re [1913], 1 Ch. 377 401GERMAN DATE COFFEE Co., In Re [1882], 20 Ch.D. 169 510GILBERT'S CASE, NATIONAL PROVINCIAL MARINE INSURANCE Co.,

In Re [1870], 5 App. Cas. 559 479GLASDIR COPPER MINES, In Re [1906], 1 Ch. 365 384GLORY PAPER MILLS, In Re, DUNSTER'S CASE [1894], 3 Ch. 473... 216GLOSSOP v. GLOSSOP [1907], 2 Ch. 371 227GOODWIN v. KOBARTS [1875], 10 Ex. Cas. 337 359GRANT v. ANDERSON & Co. [1892], 1 Q.B. 108 60GRAY v. STONE AND FUNNELL [1893], 69 L.T. 282 168GREAT COBAR, LTD., In Re [1915], 1 Ch. 682 383GREENWOOD v. ALGECIRAS, ETC. RAILWAY Co. [1894], 2 Ch. 205... 384GRIFFITH v. PAGET [1877], 5 Ch.D. 894 394GUARDIAN ASSURANCE Co., In Re [1917], 1 Ch. 431 401GUINNESS v. LAND CORPORATION OF IRELAND [1883], 22 Ch.D.

381 32

HACKNEY PAVILION, In Re [1924], 1 Ch. 276 193HALLETT, In Re, NATIONAL INSURANCE Co., Ex parte [1894],

71 L.T. 408 205HAMBRO v. BURNAND [1904], 2 K.B. 10 448HAWKES v. EASTERN COUNTIES RAILWAY Co. [1885], 5 H.L.C. 331 476HAYCRAFT GOLD REDUCTION, ETC. Co., In Re [1900], 2 Ch. 230

242, 513HAY'S CASE, see CANADIAN OILWORKS CORPORATION.HEARTS OF OAK ASSURANCE Co. v. FLOWER & SONS [1936], Ch. 76 424

xvi TABLE OF CASESPAGE

HEARTS OF OAK LIFE AND GENERAL ASSURANCE Co., In Re [1920],1 Oh. 544 46

HECTOR WHALING, LTD., In Re [1936], Ch. 208 250HESTER & Co., In Re [1875], 44 L.J., Ch. 747 391, 392HIBBERD v. KNIGHT [1848], 2 Ex. 11 444HOARK Co., LTD., In Re [1904], 2 Ch. 208 330HOARE & Co., In Re [1934], 150 L.T. 374 402HOBBH v. WAYKT [1887], 30 Ch.D. 200 206HOBSON v. HOUGIITON & Co. [1929], 1 Ch. 300 174HONG KONG AND CHINA GAS Co. v. GLEN [1914], 1 Ch. 527 ... 132HOOLE v. GREAT WESTERN RAILWAY Co. [1808], 3 Ch. 202 ... 332HOOPER v. KERR, STUART

TABLE OF CASES xviiPAOR

KEY AND SON, LTD., In Re [1902], 1 Ch. 467 148KINGSBURY COLLIERIES, LTD., In Re, MOORE'S CONTRACT [1907],

2Ch. 259 42KINGSTON COTTON MILL Co., In Re [1896], 2 Ch. 279 ... 310, 311KIRBY & WILKINS [1929], 2 Ch. 444 121KLEIN, In Re [1906], 22 T.L.R. 664 559KLEINWORT SONS & Co. v. ASSOCIATED AUTOMATIC MACHINE

CORPORATION [1934], W.N. 65 7, 179, 461, 462KREDIT BANK CASSEL v. SCHENKERS [1927], 1 K.B. 826 458

LADIES' DRESS ASSOCIATION v. PULBROOK [1900], 2 Q.I3. 376 ... 209LAGTJNAS NITRATE Co. v. LAGUNAS NITRATE SYNDICATE [1899],

2Ch. 392 229LAGUNAS NITRATE Co. v. SCHRODER [1901], 85 L.T. 22 332LAMB v. SAMBAS RUBBER, ETC. Co. [1908], 1 Ch. 845 106LAND CREDIT Co. OF IRELAND, In Re [1869], 4 Ch. App. 469 ... 53LAROCQUE v. BEAUCHEMIN [1897], A.C. 358 130LATCHFORD PREMIER CINEMA v. ENNION [1931], 2 Ch. 409 ... 227LAXON & Co., In Re (No. 2) [1892], 3 Ch. 555 49, 122LEADBITTER v. FARROW [1816], 5 M. & S. 349 459LEE, BEHRENS & Co., In Re [1932], 2 Ch. 46 224LEE v. NEUCHATEL ASPHALTE Co. [1889], 41 Ch.D. 1 324, 325, 328, 331LEEDS ESTATE, ETC. Co. v. SHEPHEBD [1887], 36 Ch.D. 787 224, 230LEITCH BROS., In Re (1933) Ch. 261 568LEMON v. AUSTIN FRIARS INVESTMENT TRUST [1926], 1 Ch. 1 ... 358LEVY v. ABERCORRIS SLATE AND SLAB Co. [1888], 37 Ch.D. 264 ... 358LLEWELLYN v. KASINTOE RUBBER ESTATES [1914], 2 Ch. 670 ... 393LLOYD v. GRACE SMITH & Co. [1912], A.C. 716 456a, 462LOCK v. QUEENSLAND INVESTMENT AND LAND MORTGAGE Co.

[1896], App. Cas. 461 52,151LONDON AND COUNTIES ASSETS Co. v. BRIGHTON, ETC. PICTURE

PALACE, LTD. [1915], 2 K.B. 493 225LONDON AND GENERAL BANK, In Re [1895], 2 Ch. 673 ... 310, 313LONDON AND NORTHERN BANK, In Re, JONES, Ex parte [1900],

1 Ch. 220 135LONDON AND PROVINCIAL, ETC. COAL Co. [1877], 5 Ch.D. 525 ... 123LONDON AND SOUTH WESTERN CANAL Co., In Re [1911], 1 Ch. 346 216LONDON AND SOUTHERN COUNTIES FREEHOLD LAND Co., In Re

[1885], 31 Ch.D. 223 214LONDON GIGANTIC WHEEL Co., 24 T.L.R. 618 224LONGMAN v. BATH ELECTRIC TRAMWAYS [1905], 1 Ch. 646 ... 179LORD MAYOR OF SHEFFIELD v. BARCLAY [1905], A.C. 392 ... 456LOUISIANA AND SOUTHERN STATES, ETC. MORTGAGE Co. [1909],

2Ch. 552 88LUBBOCK v. BRITISH BANK OF SOUTH AMERICA [1892], 2 Ch. 198 326LURGAN'S (LORD) CASE, see METAL CONSTITUENTS G

xviii TABLE OF CASESPAOE

MACKKRKTH v. WIGAN COAL AND IRON Co. [1916], 2 Ch. 293 168, 169MAHONEY v. EAST HOLYFORD MINING Co. [1875], 7 H.L. 869 ... 216MAIDSTONE PALACE OF VARIETIES, In Re [1909], 2 Ch. 283 ... 378MALLESON v. NATIONAL INSURANCE AND GUARANTEE CORPORATION

[1894], 1 Ch. 200 153MASONIC AND GENERAL LIFE ASSURANCE Co. v. SHARPE [1892],

1 Ch. 154 230MASPONS ?;. MILDRED [1882], 9 Q.B.D. 530 445MATTHEW ELLIS, In Re [1933], 1 Ch. 458 361MAYNARD v. CONSOLIDATED KENT COLLIERIES CORPORATION, LTD.

[1903], 2 K.B. 121 189MEASURES BROTHERS v. MEASURES [1910], 2 Ch. 248 465MELIIADO v. PORTO ALEGRE, ETC. RAILWAY Co. [1874], L.ll.

9C.P. 503 53MERCHANTS OF THE STAPLE v. THE BANK OF ENGLAND [1887],

21 Q.B.D. 160 456aMETAL CONSTITUENTS Co., In Re, LORD LURGAN'S CASE [1902],

1 Ch. 707 50,105,123METCALFE SONS, In Re [1933], Ch. 142 617METCALFE & SONS, LTD. [1933], Ch. 142 71METROPOLITAN AMALGAMATED ESTATES, LTD., In Re [1912],

2Ch. 497 383METROPOLITAN COAL CONSUMERS' ASSOCN. v. SCRIMGEOUR [1895],

2 Q.B. 604 117MEUX BREWERY Co., LTD., In Re [1919], 1 Ch. 28 86MIDLAND COAL, ETC. Co., In Re [1895], 1 Ch. 267 400MIDLAND COUNTIES DISTRICT BANK v. ATTWOOD [1905], 1 Ch. 357 465MIDLAND BANK, LTD. v. RECKITT [1933], A.C.I 449, 450MOLINEAUX v. LONDON, ETC. INSURANCE Co. [1902], 2 K.B. 589... 215MONARCH MOTOR CAR Co. v. PEASE [1903], 19 T.L.R. 148 ... 148MORIARTY v. REGENT'S GARAGE AND ENGINEERING Co., LTD.

[1921], 1 K.B. 423 224MORRELL v. OXFORD PORTLAND CEMENT Co. [1910], 26 T.L.R. 682 223MORRISON, G. H. & Co., In Re [1912], 106 L.T. 731 569MORRISON v. TRUSTEES, ETC. INSURANCE CORPORATION [1898],

79 L.T. 605 209,211MOSELY V. KOFFYFONTEIN MlNES, LTD. [1904], 2 Ch. 108 ... 131Moss STEAMSHIP Co. v. WHINNEY [1912], A.C. 254 386MUTTER v. EASTERNAND MIDLAND RAILWAYCO. [1888],38Ch.D. 92 483

NASH v. LYNDE [1929], A.C. 158 92NATIONAL BANK OF WALES, In Re, CORY'S CASE [1899], 2 Ch. 629 229NATIONAL DWELLINGS SOCIETY v. SYKES [1894], 3 Ch. 159 ... 245NATIONAL MOTOR MAIL COACH Co., In Re, 2 Ch. 228 ... 53, 121NEUMANN v. COMMISSIONERS OF INLAND REVENUE [1934], A.C.

215 345,613NEW BALKIS EERSTELING v. RANDT GOLD MINING Co. [1904], App.

Cas. 165 209NEW BRITISH IRON Co., In Re, BECKWITH, Ex parte [1898],

1 Ch. 324 223

TABLE OF CASES xixPAGE

NEW CHINESE ANTIMONY Co., In Re [1916], 2 Ch. 115 ,.. 71NEW LONDON AND BRAZILIAN BANK v. BROCKLEBANK [1882],

21 Ch.D. 302 168NEW YORK TAXIOAB Co., In Re [1913], 1 Ch. 1 382NEW ZEALAND GOLD EXTRACTION Co. v. PEACOCK [1894], 1 Q.B.

622 151NEWDIGATE COLLIERY, In Re [1912], 1 Ch. 468 383NEWLANDS v. NATIONAL EMPLOYMENT ACCIDENT ASSOCIATION

[1886], 54 L.J., Q.B. 428 457NEWSPAPER PROPRIETARY SYNDICATE, In Re [1900], 2 Ch. 349 ... 560NEWTON v. BIRMINGHAM SMALL ARMS Co. [1906], 2 Ch. 378

291, 309, 314, 341NORMANDY v. IND, COOPE & Co. [1908], 1 Ch. 84 52, 55 249NORTHUMBERLAND AVENUE HOTEL Co., In Re [1886], 33 Ch.D.

16 30

O'KANE v. MULLAN [1925], N.Ir. 1 456OLIVER v. BANK OF ENGLAND [1902], 1 Ch. 610 199, 456OLYMPIC FIRE, ETC. Co., In Re [1920], 2 Ch. 341 451OOREGUM GOLD MINING Co. OF INDIA v. ROPER [1892], A.C. 125 131ORIENTAL BANK CORPORATION, In Re [1884], 28 Ch.D. 634 454, 466OTTO ELECTRICAL MANUFACTURING Co. (1905) LTD., In Re [1906],

2 Ch.D. 390 146OTTOS KOPJE DIAMOND MINES, In Re [1893], 1 Ch. 618 ... 173, 186OXTED MOTOR Co., In Re [1921], 3 K.B. 32 260,399

PACAYA RUBBER, ETC. Co., In Re [1914], 1 Ch. 542 106PACIFIC COAST COAL MINES v. ARBUTHNOT [1917], A.C. 607 ... 44PANAMA AND SOUTH PACIFIC RAILWAY Co. v. INDIA RUBBER,

ETC. WORKS Co. [1875], 10 Ch. App. 615 232PARENT TYRE Co., LTD., In Re [1923], 2 Ch. 222 46PARK v. LAWTON [1911], 1 K.B. 688 156PARKER AND COOPER v. READING [1926], 1 Ch. 975 ... 250, 399PATENT INVERT SUGAR Co., In Re [1885], 31 Ch.D. 166 85PATENT WOOD KEG SYNDICATE v. PEARSE [1906], W.N. 164 ... 241PAYNE v. CORK Co. [1900], 1 Ch. 308 393PEEBLES HOTEL-HYDROPATHIC [1920], S.C. 303 401PEEK v. GURNEY [1873], 6 H.L. 377 105PEEL v. L. & N.W. RAILWAY Co. [1907], 1 Ch. 5 260PENNY, Ex parte, GRESHAM LIFE ASSURANCE SOCIETY, In Re

[1873], 8 Ch. App. 446 193PENROSE v. MARTYR [1858], E.B. & E. 499 459PERCIVAL v. WRIGHT [1902], 2 Ch. 421 213PERKINS, In Re [1890], 24 Q.B. 613 168PERROTT & PERROTT v. STEPHENSON [1934], Ch. 171 221PETERBOROUGH TRUST v. STEEL INDUSTRIES OF GREAT BRITAIN

[1934], 78 Sol. Jo. 861 461PHOSPHATE OF LIME Co., In Re, AUSTIN'S CASE [1871], 24 L.T.

932 150PIERCY v. S. MILLS & Co. [1920], 1 Ch. 77 141, 221

xx TABLE OF CASESPAGE

PlLKINGTON V. UNITED RAILWAYS, ETC. [1930], 2 Ch. 108 ... 167PITKIN, JAMES & Co., In Re [1916], 114 L.T. 673 118POOL SHIPPING Co., In Re [1920], 1 Ch. 251 194PORTUGUESE CONSOLIDATED COPPER MINES, In Re [1890], 45 Ch.D.

16 140PRINCESS OF REUSS v. Bos [1871], 5 ILL. 176 49PULBROOK v. RICHMOND CONSOLIDATED MINING Co. [1878],

9 Ch.D. 610 210,227

RAILWAY SLEEPERS SUPPLY Co., In Re [1885], 29 Ch.D. 204 ... 247RAMSGATE VICTORIA HOTEL v. MONTEFIORE [1866], L.R. 1 Ex.

309 141RANDT GOLD MINING Co., In Re [1904], 2 Ch. 468 209RECKITT v. BARNETT, PEMBROKE AND SLATER [ 1 929], A.C. 1 76 ... 449RED ROCK GOLD MINING Co., In Re [1889], 61 L.T. 785 ... 510REG. v. D'OYLY [1840], 12 A. E., 159 245REID v. EXPLOSIVES Co., LTD. [1887], 19 Q.B.D. 264 ... 7, 383, 464REIGATE v. UNION MANUFACTURING Co. (RAMSBOTTOM) LTD.

[1918], 1 K.B. 592 7,465REPUBLIC OF BOLIVIA SYNDICATE, In Re [1914], I Ch. 139 . . 310REUSS, PRINCESS OF, v. Bos [1871], 5 H.L. 176 49REVERSIONARY INTEREST SOCIETY, In Re [1892], 1 Ch. 615 ... 355REX v. BISHIRGIAN [1936], 154 L T.R. 499 100REX v. KYSLANT AND MORLAND [1931], 101 L.J., K.B. 97 ... 310REX v. REGISTRAR OF COMPANIES [1912], 3 K.B. 23 36ROBERTS & COOPER [1929], 2 Ch. 383 71, 334ROBINSON v. BLAND, 1 W.B.L. 258 445ROBINSON PRINTING Co. v. CHIC, LTD. [1905], 2 Ch. 123 380, 466ROBSON & SMITH [1896], 2 Ch. 124 361ROUSSEL v. BURNHAM [1909], 1 Ch. 127 119ROWELL v. JOHN ROWELL & SONS, LTD. [1912], 2 Ch. 609 ... 211aROYAL BRITISH BANK v. TURQUAND [1856], 6 E. & B. 327

44, 140, 213, 216, 458RUBEN v. GREAT FINGALL CONSOLIDATED [1906], App. Cas. 439

148, 458, 461

SADGROVE v. BRYDEN [1907], 1 Ch. 318 261SALISBURY GOLD MINING Co. v. HATHORN [1897], App. Cas. 268 264SALT, THOMAS & Co., In Re [1908], L.T. 558 519SALTON v. NEW BEESTON CYCLE Co. [1899], 1 Ch. 775 ... 224, 452SANDWELL PARK COLLIERY Co., In Re [1914], 1 Ch. 589 ... 401SANKEY BROOK Co., In Re [1870], 10 Eq. 381 392SAUNDERS, T. H. & Co., In Re [1908], 1 Ch. 415 129SCADDING v. LORANT [1851], 3 H.L. 418 264SECURITIES AND PROPERTIES, ETC. CORPORATION v. BRIGHTON

ALHAMBRA [1893], 62 L.J., Ch. 566 384SELLAR v. CHARLES BRIGHT [1904], 2 K.B. 446 207SHARPS v. DAWES [1876], 2 Q.B.D. 26 257SHAW & SONS (SALFOED), LTD. v. SHAW [1935], 2 K.B. 113 ... 293

TABLE OF CASES xxiPAGE

SHEFFIELD CORPORATION v. BARCLAY [1905], App. Gas. 392 198, 199SHUTTLEWORTH v. Cox BROTHERS & Co. [1927], 2 K.B. 9 ... 53SIDEBOTTOM v. KsRSHAW, L.EESE & Co., LTD. [1920], 1 Ch. 154... 53SLATER'S CASE [1865J, 35 BEAVAN 391 174SMITH v. PARINGA MINES [1906], 2 Ch. 193 243, 263SMYTH v. DARLEY [1849], 2 H.L. 789 248SOCIETE ANONYME DES ANCIENS I^TABLTSSEMENTS PANHARD ET

LEVASSOR v. PANHARD LEVASSOR MOTOR Co. [1901], 2 Ch.613 36

SOCIETY OENERALE DE PARIS v. WALKER [1885], 11 A.C. 20 ... 194SOCIETE GENERALE v. TRAMWAYS UNION [1885], 14 Q.B.D. 424 ... 198SOUTH OF ENGLAND NATURAL GAS, ETC., Co. [1911], 1 Ch. 673 106SOVEREIGN LIFE ASSURANCE Co. v. DODD [1892], 2 Q.B. (C.A.) 627 400SPACKMAN v. EVANS [1868], 3 H.L. 171 208, 221, 310SPANISH PROSPECTING Co., In Re [1911], 1 Ch. 92 323SPARKS v. LIVERPOOL WATERWORKS Co. [1807], 13 Ves. 428 ... 208SPENCER v. ASHWORTH, PARTINGTON & Co. [1925], 1 K.B. 589 ... 197SPRINGBOK AGRICULTURAL ESTATES, LTD., In Re [1920], 1 Ch.

563 71,333SQUIRE CASH CHEMISTS v. BALL, BAKER & Co. [1911], 28 T.L.U.

81 310, 312STACEY, F. & Co. v. WALLIS [1912], 106 L.T. 544 38STAPLES v. EASTMAN PHOTOGRAPHIC MATERIALS Co. [1896], 2 Ch.

303 69STAPLEY v. HEAD BROTHERS [1924], 1 Ch. 1 327, 331STAR STEAM LAUNDRY Co. v. DUKAS [1913], 108 L.T. 367 ... 226STAR TEA Co., In Re [1930], W.N. 4 398STARKEY v. BANK OF ENGLAND, see OLIVER v. BANK OF ENGLAND.STEAD, HAZEL & Co. v. COOPER [1933], 1 K.B. 840 518STEELE v. SUTTON GAS Co. [1883], 12 Q.B. 68 489STEINBERG v. SCALA (LEEDS), LTD. [1923], 2 Ch. 452 122STOCKEN'S CASE, BLAKELY ORDNANCE Co., In Re [1868], 3 Ch.

App. 412 209SUTHERLAND v. BRITISH DOMINIONS LAND SETTLEMENT CORPORA-

TION [1926], 1 Ch. 746 174SUTTON v. ENGLISH AND COLONIAL PRODUCE Co. [1902], 2 Ch. 502 216SWEENY v. SMITH [1869], 7 Eq. 324 210

TAURINECO., In Re [1883], 25 Ch.D. 118 222TAVISTOCK IRONWORKS, In Re, LYSTER'S CASE [1867], 4 Eq. 233 256TAYLOR v. DAVIES [1920], App. Cas. 636 385TEA CORPORATION, In Re [1904], 1 Ch. 12 402THAIRLWALL v. GREAT NORTHERN RAILWAY Co. [1910], 2 K.B. 509 338THOMAS v. TODD [1926], 2 K.B. 511 466TILLOTSON v. COMMISSIONERS OF INLAND REVENUE [1933], 1 K.B.

134 392, 589TORBOCK v. LORD WESTBURY [1902], 2 Ch. 871 249TOWERS v. AFRICAN TUG Co. [1904], 1 Ch. 558 331TREVOR v. WHITWORTH [1887], 12 App. Cas. 409 52, 121, 186

xxii TABLE OF CASESPAGE

UNDEBHAY v. READ [1887], 29 Q.B. 209 383UNITED PROVIDENT ASSURANCE Co., In Re [1910], 2 Ch. 477 ... 400

VERNER v. GENERAL AND COMMERCIAL INVESTMENT TRUST [1894],2 Ch. 239 324, 327, 328, 331

WALKER v. LONDON TRAMWAYS Co. [1879], 12 Ch.D. 705 ... 62WALL v. LONDON AND PROVINCIAL TRUST [1920], 2 Ch. 582 330, 341WALLACE, In Re [1884], 14 Q.B.D. 22 448WARNER INTERNATIONAL, ETC. Co., LTD. v. KILBURN, BROWN &

Co. [1914], W.N. 61 117WEBB v. EARLE [1875], 20 Eq. 556 68WEBB, H. J. & Co. (SMITHFIELD, LONDON), LTD., In Re [1922],

2 Ch. 369 560WEBB v. WHIFFIN [1871], L.R. 6 H.L.C. 724 523WEBSTER, In Re [1907], 1 K.B. 623 207WEDGWOOD COAL AND IRON Co., In Re, ANDERSON'S CASE [1877],

7 Ch.D. 75 32,400WEIKERSHEIM'S CASE, LAND CREDIT Co. OF IRELAND, In Re

[1873], 8 App. Cas. 831 122WELTON v. SAFFERY [1897], App. Cas. 299 52WENLOCK, BARONESS v. RIVER DEE Co. [1887], 36 Ch.D. 675 ... 484WESTMINSTER ROAD CONSTRUCTION Co., THE, In Re [1932], The

Accountant, 203 310WESTON'S CASE, SMITH, KNIGHT & Co., In Re [1868], 4 Ch. App.

Cas. 20 172WHEATLEY v. SILKSTONE, ETC. COAL Co. [1885], 29 Ch.D. 715 ... 361WHITE PASS AND YUKON RAILWAY Co., In Re [1918], W.N. 323... 89WHITECHUROII, GEORGE, LTD. v. CAVANAGH [1902], A.C. 117 179, 461WILL v. UNITED LANKAT PLANTATIONS Co., LTD. [1912], 2 Ch. 571 524WILLS v. MURRAY [1850], 4 Ex. 843 264WILMER v. MCNAMARA & Co., LTD. [1895], 2 Ch. 245 ... 330, 331WINTER GERMAN OPERA, In Re [1907], 23 T.L.R. 662 659WORTHINGTON, In #e [1914], 2 K.B. 299 118WRAGG, In Re [1897], 1 Ch. 796 131

YENIDJE TOBACCO Co., In Re [1916J, 2 Ch. 426 509YORK TRAMWAYS Co. v WILLOWS [1882], 8 Q.B. 685 256YOUNG v. LADIES' IMPERIAL CLUB [1920], 2 K.B. 523 248YOUNG v. NAVAL AND MILITARY, ETC. CO-OP. SOCIETY OP S.

AFRICA [1905], 1 K.B. 687 224

A MANUAL OFSECRETARIAL PRACTICE

[Note Throughout tins book, the words " the Act" mean the

Companies Act, 1929. All references in the text, except whore otherwisestated, are references to that Act.]

CHAPTER I

INTRODUCTION

THE word " Secretary"

is derived from the Late Latinword Secretdrius, signifying a notary, scribe, etc., a title thatwas applied to various confidential officers, and embraced, aspart of the root meaning of the word, the idea of secrecy. TheOxford Dictionary gives the following definitions of the word :

(1) One who is entrusted with private or secret matters; aconfidant

;one privy to a secret.1

(2) One whose office it is to write for another; especiallyonewho is employed to conduct correspondence, to keep records,and (usually) to transact various other business, for anotherperson or for a society, corporation, or public body.

In early use, the term was applied only to the officer whoconducted the correspondence of a king.

A private secretary is a secretary employed by a ministerof state or other high official for the personal correspondenceconnected with his official position ; also applied to a secretaryin the employ of a particular person (as distinguished from the

secretary to a society, company, or corporation).The secretary of an embassy or legation ; an official of an

embassy or diplomatic mission ranking next to the ambassadoror envoy, and empowered to some extent to supply his place inhis absence.

(3) Used in the official designation of certain ministers

1 The dictionary indicates that this use of the word is obsolete.Historically, this is so, but it is still indicative of one aspect of asecretary's duties.

B

2 A MANUAL OF

presiding over executive departments of state ; e.g. The Secre-tary of State for Foreign Affairs ; for War, etc.

These definitions do little more than indicate what a widediversity of tasks, similar in kind, are undertaken by thedifferent classes of secretaries, each engaged in performingparticular but analogous functions in the social order. Everyassociation of persons, however significant or insignificant, fromthe smallest sports club right up to the State itself, has atleast one person a secretary to whom is allotted the import-ant task of seeing that the everyday routine activity of the

society is properly carried on, the standard of attainment andefficiency required of that official differing only in degree withthe particular sort of post he fills. A secretary's work is oftenhidden from the public eye. The precise functions, for example,of Secretaries of State are scarcely known to, and littleappreciated by, the great mass of people, who would beastonished to be told that many an important Governmentdecision, based upon the collation of multitudinous facts, wasdue, in the first place, less to the apparent omniscience of theMinister holding a particular portfolio than to the patient andskilled work of his Departmental Secretaries.

It has been said that the profession of Secretary is one ofthe oldest in the world, and that wherever there was a man ofaction there too was a man of the pen to record his deeds.Much of our knowledge of ancient times is derived from theScribes, who were the secretaries of their day.

Scriba, in Roman times, was a general designation for anyofficial concerned with writing or the keeping of accounts, andwas used of various public functionaries performing secretarialduties. The scribal were graded, the lower ranks performingmerely clerkly duties. In a lower category were the notarii,or actuarii. These were slaves or freedmen attached to wealthyRomans for taking notes in the law courts, and for otherpurposes, some doubtless of a personal kind.1

1 One such notarius is remembered in these days Tullius Tiro, thefreedman and friend of Cicero, who was in all probability the syste-matiser of the Notce Tironiance, a code of signs and abbreviations usedas ciphers for shorthand writing, which for a thousand years served thepurpose now filled by our modern shorthand systems. But Tiro was aman of exceptional talent, and probably it is to him that we owe, ingreat measure, the preservation of Cicero's orations, and other works.Under the Empire the term notarius was applied to the secretaries ofthe Emperors, and these were persons of rank.

SECRETARIAL PRACTICE 3

The modern Secretary occupies just as honourable a positionas his ancient brother. But the passage of time has addedenormously to his importance. He is now indispensable tothe conduct of industry, commerce and society, and not the lessbecause his most important work may be carried on behind thescenes, and others receive the public credit primarily due tohim.

By far the largest group of secretaries, and, with thepossible exception of Secretaries of State, Embassies andLegations, by far the most important as a whole, is that com-prising the secretaries to Joint Stock Companies, and it is withthem that this work is concerned.

By way of introduction, nothing better perhaps could begiven than the following digest of some remarks made bySir Edwin Stockton at a Secretaries' Conference held at Buxtonin 1927.

In the course of that paper, Sir Edwin said :

A good secretary endeavours to hide his employer's defectswhile allowing his virtues to appear in the full light of day. Heshields him alike from the ubiquitous interviewer and thegarrulous inventor who boasts a remedy for every ill. Hekeeps from him the things he need not know, and acquaintshim only with such things as he ought to know. In short, heis a man of discernment, discretion and tact.

He must have sound education, and correct and extensiveinformation of the right kind. No busy man of affairs can findout for himself all that he requires to know ; he is bound to bedependent on his secretary to keep him posted in the thingsthat matter.

He should have specialised knowledge of the profession orbusiness in which he is engaged, and, if that business beconnected with a particular industry, be energetic enough andclever enough to master its technique, and to acquire frompublished statistics and other sources all that is to be known ofsimilar businesses competing with his own. He should bequick to sense changing conditions, and to suggest appropriatemeans for meeting those changes, and keep himself abreast ofall legislation that may affect or be likely to affect the industry.

He must be a man of decision and energy, have self-discipline, self-control, sympathy for others, and a strong, true

4 A MANUAL OF

sense of justice, together with some personal charm, since theseare the qualities required for the smooth control and manage-ment of a staff, and for securing its willing co-operation. Inaddition, he must possess the faculty of organisation and thehabit of using it developed to a high degree, and a mind trainedto deduce right conclusions from any given set of facts.

The secretary may have little to do with the determinationof policy. That, in general, is the prerogative of his superiors.But he will have much to do with the carrying out of policyonce it has been decided. And here those special qualitiesalready mentioned, which in the aggregate make up thatelusive thing called personality, will play a most importantpart. The directors of a large corporation have not theopportunities for personal intercourse with customers or with thestaff that the secretary has. The secretary is the liaison officerbetween the directors and the staff and outside persons dealingwith the company, and will ensure by his advice that no policyshall be adopted that will antagonise the one or offend theothers.

Such a man as is here roughly sketched will perfect himselfin all knowledge with which, as a business man, ho ought to be

acquainted. Particularly will he seek to master the intricaciesof modern finance, and its bearings upon the financing of hisown company. He will not be content to be a mere creatureof routine, but will make his own openings for advancement.Slowly and discreetly he will win the esteem of his employers.His energy and initiative will diffuse itself throughout the wholeorganisation, bracing it up to full concert pitch, until by andby he will not only be the recipient of his superiors' orders, buttheir valued adviser as well, in whom an ever-growing trust andconfidence is reposed. This is the ideal position to whichevery secretary should aspire ; this is the position which, in a

very large number of instances, the secretary attains.As will be gathered from the above summary, the secretary

to a limited company may be little more than a mere routineworker, practically a confidential clerk, or he may occupy theenviable and vastly more responsible position described by SirEdwin Stockton as the proper goal at which every secretaryshould aim.

Legally, as will be seen in Chap. XIX, the companysecretary is the confidential servant of the directors, doing

SECRETARIAL PRACTICE 5

only such work as he is told to do. Practically, when appliedto the executive secretary, there must be substituted for thewords " as he is told to do " the phrase

"

as may be delegatedto him." A world of difference separates these two phrases.This will be evident when the functions of the two broad classesof secretaries outlined above are contrasted.

It is not easy to enumerate the essential qualifications ofthe executive company secretary. To a sound general educa-tion as evidenced by a school leaving, or a matriculation certi-ficate, or other recognised equivalent, there should be added :

(a) Knowledge of the English language. Unless thesecretary has this, it will be difficult for him to prepare a goodprecis or report, or to conduct correspondence as it ought to beconducted. Unfortunately, badly composed letters are therule rather than the exception in every walk of life, and asecretary who can, in all circumstances, dictate forceful, logical,persuasive letters, and so maintain and enhance friendlyrelationships with the company's correspondents, and inspiretheir respect, is invaluable to the company he serves. Preciswriting, the drafting of reports, the preparation of minutes andagenda, and the framing of resolutions require a somewhatspecialised use of English, and this use should be studied and

practised until real facility is attained.

Further, the secretary should have a skilled and intimateacquaintance with the following subjects :

(b) Office organisation and the methods of conductingbusiness. This will include practical knowledge of the best

systems of filing, indexing and duplicating, and the mostapproved labour-saving office appliances ; methods of selecting,controlling and remunerating the staff, and dividing the workand responsibility among the members so as to secure smoothand efficient working, with the necessary checks and safeguardsagainst error and fraud; knowledge of factory legislation,particularly legislation affecting the industry in which he is

engaged; and the employer's liability under the Workmen'sCompensation Acts, the National Health Insurance Acts, theWidows, Orphans, and Old Age Contributory Pensions Act, andthe Unemployment Insurance Acts ; and, generally, practicalacquaintance with the modes of carrying on trade, both athome and overseas, such as the modern man of business musthave at his fingers' ends.

6 A MANUAL OF

(c) Book-keeping and Accountancy, and such cognatesubjects as Income Tax Law and Practice, Rating and Valua-tion, and the preparation and presentation of statistics in

scientifically accurate form.

(d) Mercantile Law, i.e. the law relating to contract, agency,sale of goods, negotiable instruments, carriage by land, sea andair, insurance, patents, copyright, trade marks, bankruptcyand bills of sale.

(e) The Companies Act, 1929, together with a workingacquaintance with the leading cases that have decided specialpoints of procedure, or fixed the meaning of particular sectionsof the Act.

(/) The law relating to the conduct and procedure atmeetings (a) generally, (b) the meetings of registered andstatutory companies.

(g) Banking, the money market, foreign exchange, invest-ment, and the methods of financing industry.

(h) General economics.

(i) Special subjects, a knowledge of which is essential to thesecretary engaged in particular spheres of service, e.g. the law

relating to Local Government and Municipalities, to Railways,Shipping, etc.

Finally, where a company has extensive foreign connections,as is the case with so many companies to-day, the secretary willgreatly enhance his value to his company if he has had thewisdom to acquire such a knowledge of one or more foreignlanguages as will enable him to converse and correspondfreely in them. The particular language or languages to beacquired will, obviously, depend upon circumstances, but nextto English the languages of greatest commercial importance areFrench, German and Spanish.

Appointment of Secretary. Subject to the Articles ofAssociation, the directors have power to appoint and removethe secretary and to fix his remuneration. It is advisablewhen a company appoints a secretary for the directors to requirehim to enter into a contract of service with the company, inwhich his duties and remuneration are defined, and the mode ofdetermining the contract is stated. But a secretary may benamed as such in the articles of the company. An article nam-ing a person as secretary does not, however, bind the companyto employ that person, and he has no cause of action against thecompany if he is not so employed ; for articles of association

SECRETARIAL PRACTICE 7

constitute an agreement between the company and its memberssolely, and only with those members in their capacity as mem-bers. But where, in conformity with such an article, a personhas in fact acted as secretary, and the company has entered intono written agreement with him, and he is afterwards dismissed,an action for damages may lie against the company. In thatcase the Court will presume a contract of employment, andwill consider the wording of the article (and other evidencetendered) in order to determine the terms of that employment.

A limited company may be appointed as secretary, althoughthe professional societies of secretaries rightly disapprove ofthese impersonal appointments, since the effect is to sub-

delegate duties which are of a personal and confidential nature,and tins in itself is undesirable (for an illustration of the unfor-tunate consequences which may follow from such an appoint-ment see Kleinworts v. Associated Automatic Machine Corpora-tion [1934], W.N. 65).

One person may act as secretary to many companies. Butunless the companies are really part of one combination withunified control and interests, it is not usually possible for asingle official to devote as much time and effort to each separatecompany as will enable him to perform the full executiveduties that a whole-time secretary would normally carry out,except perhaps in small companies. It must, however, besaid that the specialist organisation of a practising secretary,who is an expert in his profession, offers many advantages tothe companies for whom he acts, particularly in the per-formance of routine secretarial duties. The duties in thesemultiple secretaryships though important are more or lessformal, and this is recognised in a winding up, since asecretary is only entitled to rank as a preferential creditorfor his salary if he is bound to attend at the company'soffices in person at certain stated times.

The secretary's appointment is determined by dismissalwithin the terms of his agreement ; by the appointment by theCourt of a receiver and manager on behalf of debenture holders(Reid v. Explosiies Co. [1887], 19 Q.B.D. 264) ; by an order forcompulsory winding up (Chapman's Case [1866], 1 Eq. 346),and, if there has been a change in the corporate state of the

company, probably by a resolution for voluntary winding up(Reigate v. Union Manufacturing Co. (Ramsbottom), [1918],1 K.B. 692). But on this and other points see Chap. XIX," The Legal Position of the Secretary/'

CHAPTER II

THE JOINT STOCK COMPANY

THE evolution of the joint stock company from the soletrader and the association of traders in partnership is a mostinteresting study, and affords an accurate index by which tomeasure the progress of trade, industry arid commerce duringthe last few centuries. The history of this progress, whichmay be found in standard works on company law and economics,scarcely comes within the scope of the present treatise. It issufficient to say that the unincorporated company, or largecommon law partnership, which first appeared in the seven-teenth century, at last acquired, after years, not to say centuries,of legal struggle, similar but not equal status in law to that

already enjoyed by the few companies expensively createdunder charter of the Crown, or by special Act of Parliament ;so that by simple registration, with the addition of the word" Limited " to its name, such a company could be incorporated,and its members enjoy the same privilege of limited liabilityas hitherto had been confined to members of chartered orparliamentary companies.

Registration with limited liability was first made possibleby the Act of 1855. In 1862, the Acts relating to joint stockcompanies were consolidated. Between the years 1862 and1908 some sixteen amending Acts were passed. The Companies(Consolidation) Act of 1908 the second great consolidatingstatute again codified the existing law. Three other Actswere passed subsequent to 1908, viz. the Companies Act, 1913,the Companies (Foreign Interests) Act, 1917, and the Companies(Particulars as to Directors) Act, 1917. These four Acts werecited as " The Companies Acts, 1908-1917."

In 1918, and again in 1925, Committees were appointed toreport upon the existing Companies Acts, and to make sugges-tions for preventing certain abuses of, and closing loopholes in,the Acts. An amending bill, based upon the recommendationsof the Committee of 1925, was introduced to Parliament in1927, and passed into law as the Companies Act, 1928.

8

A MANUAL OF SECRETARIAL PRACTICE 9

Except as to two sections, the provisions of that Act did notbecome operative, but were embodied in a new ConsolidationAct, the Companies Act, 1929, with the highly desirable objectof obviating the countless cross references, and the difficultieswhich always arise from

"

incorporation of terms by reference."The sections of the 1928 Act that came into separate opera-

tion were (1) S. 92, which imposed restrictions on the offeringof shares for subscription or sale (" Share hawking "), now S. 356of the Act of 1929, and (2) S. 53, which repealed S. 45 of the Actof 1908 and amended S. 120 of that Act so as to include re-organisation of share capital by (a) consolidation of shares ofdifferent classes and (b) division of shares into shares of differentclasses modes of reorganisation sanctioned by the repealedS. 45 of the Act of 1908. S. 53 of the Act of 1928 is nowembodied in S. 153 of the Act of 1929.

The great Consolidation Act of 1908 was rightly charac-terised as a masterpiece of legislation, yet with such an intricate

subject it is not surprising that the precise legal significanceof many of its clauses had to be fixed by judgments in theextremely numerous cases that have come before the Courts.The Companies Act, 1929, has in turn been judicially describedas a masterpiece, and it has cleared away many obscurities andloopholes, and so made obsolete certain of the judgments.Many of the decisions, however, are still as important as ever,and a knowledge of this case law is requisite to the due under-standing of the Statute now in force.

The Courts have always shown, and rightly shown, a dis-inclination to interfere with the internal management ofjoint stock companies on merely technical grounds. In theview of the Courts, business is best carried on by business menfollowing established business practice, without legal inter-ference, and while the business of a joint stock companyis necessarily conducted within the legal framework devised

by Parliament, yet so long as commercial practice does notcontravene the fundamental principles of the Act, or offendagainst the general law of the land, the less interference thereis with it the better.

Lindley, L.J., defines a company as follows :

" A company is an association of many persons who con-tribute money or money's worth to a common stock and employ

B2

10 A MANUAL OP

it in some trade or business, and who share the profit or lossarising therefrom . The common stock so contributed is denotedin money, and is the capital of the company. The personswho contribute it, or to whom it belongs, are members.The proportion of capital to which each member is entitledis his shares. Shares are always transferable, although the

right to transfer them is often more or less restricted."

A company formed for a temporary purpose, e.g. to promotea series of companies, is sometimes called a

"

Syndicate"

; the

term, however, has no precise meaning. It is common to forma syndicate for a particular project, such as to begin manu-facture under a patent, etc., and then to float a limited com-pany, and sell the assets of the syndicate to the company.The persons forming the syndicate may act in partnership,joint venture, or on a joint purse arrangement, or they may formthemselves into a limited liability company, in which case theyare subject to the same regulations as any other limited com-pany. The persons or company forming the syndicate areusually the promoters of the limited company which takesover the business. But promoters need not necessarily forma syndicate. The position of promoters is dealt with inChapter III, and see

"

Prospectus," at pp. 91 et sqq.Certain associations of persons can, or must, be incorporated

under special Statutes, e.g. Trade Unions, Friendly Societies,Building Societies, etc. It is proposed, however, to confinethe main text to those concerns registered or incorporatedunder the Companies Act of 1929.

Prohibition of Large Partnerships. It is laid down bySS. 357 and 358 as follows :

No company, association, or partnership consisting of more thantwenty persons shall be formed for the purpose of carrying on anybusiness (other than the business of banking) that has for its objectthe acquisition of gam by the company, association, or partnership,or by the individual members thereof, unless it is registered as a com-pany under this Act, or is formed in pursuance of some other Act ofParliament, or of letters patent, or is a company engaged in workingmines within the stannaries and subject to the jurisdiction of thecourt exercising the stannaries jurisdiction (S. 357).

The Companies last mentioned (companies engaged inworking mines within the stannaries) are also known as CostBook Companies.

SECRETARIAL PRACTICE 11

No company, association, or partnership consisting of more thanten persons shall be formed for the purpose of carrying on the businessof banking, unless it is registered as a company under this Act, or isformed in pursuance of some other Act of Parliament, or of letterspatent (S. 358).

Meaning of the Word "Company." The word "com-pany

"is used, as in the Act, to include those companies

registered under the Act, or registered under either of theearlier Acts of 1862 or 1908, but does not include a companyregistered under the said enactments in Northern Ireland orthe Irish Free State (S. 380). The following is a summary ofthe various types :

(1) Companies Limited by Shares, i.e. "a company havingthe liability of its members limited by the memorandumto the amount, if any, unpaid on the shares respec-tively held by them

"

(S. 1, s.-s. (2) (a)).

(2) Companies Limited by Guarantee, i.e."a company

having the liability of its members limited by thememorandum to such amount as the members mayrespectively thereby undertake to contribute to theassets of the company in the event of its being woundup

"

(S. 1, s.-s. (2) (6)).

(3) Companies with Unlimited Liability, i.e."a company

not having any limit on the liability of its members"

(S. 1, s.-s. (2) (c)).

A Company Limited by Guarantee may be registered withor without share capital ; so may an Unlimited Company.

A Company Limited by Shares may, by having certainprovisions in its articles (see p. 55, and S. 26), be a privatecompany ; any other company is a public one. Publiccompanies are further divided into those which issue a pro-spectus, and those which do not the latter having to file astatement in lieu of prospectus (see p. 101).

Associations formed for furthering some religious, philan-thropic, etc. object, and not for the purpose of profit, maybe registered, and these generally take advantage of theprovisions of S. 18 for dispensing with the word " Limited

"

as part of their name (see p. 38).

By Part IX of the 1929 Act, authorisation is given to certainexisting corporations not formed under the Act of 1929 toregister under the Act.

12 A MANUAL OF

Provided the registrar of companies is satisfied that theassociation applying for registration is authorised to be regis-tered under the Act, that its objects are apparently legal,and that all the requirements of the Acts have been dulyfulfilled, and the fees paid, he must issue a certificate of incor-

poration, certifying that the company is duly incorporated and,in the case of a limited company, that it is limited. From thefirst moment of the day of incorporation mentioned in thiscertificate (Jubilee Cotton Mills [1923], 1 Ch. 1 ; [1924],A.C. 958) the persons who have subscribed the memorandumof association, and all persons who subsequently becomemembers of the company, are a body corporate by the namecontained in the memorandum, capable of exercising all thefunctions of an incorporated company, and having perpetualsuccession and a common seal, with power to hold lands, tosue and be sued in its own name

;in fact, to exercise the same

rights as an individual subject to certain statutory provisions(SS. 13 and 14). In effect, an incorporated company is a personartificially created by law, possessing an entity distinct fromthe members composing the company. The liability of eachmember to the company, except in an unlimited company,is limited to the amount which each has agreed to contributeto the capital of the company, and once this has been paid infull, no further liability can attach to him.

The certificate of incorporation is conclusive evidencethat the requirements of the Act as to registration and mattersprecedent and incidental thereto have been complied with, andthat the association is a company authorised to be registeredand duly registered under the Act (S. 15). But it is notconclusive that the company is not a Trade Union which, bythe Trade Union Act, 1871, is incapable of registration underthe Act (S. 382, s.-s. (7)). Nor is it conclusive as to the legalityof the objects of the company (Bowman v. Secular Society[1917], A.C. 406).

The Companies Act deals with the constitution and incor-poration of companies; the issue, increase, reduction andreorganisation of the share capital ; the management, adminis-tration and winding up of companies ; with supplemental pro-visions in respect of the application of the Act to companiesregistered under former Acts, companies incorporated abroadwhich establish a place of business in Great Britain, etc.

SECRETARIAL PRACTICE 13

Table A of the First Schedule to the 1929 Act provides amodel set of articles for a company limited by shares (see p. 666).Further schedules are appended showing model memorandumsand articles of association for the various kinds of companies ;forms for various statements, including the contents of the

prospectus, etc. ; the fees to be paid to the Registrar (TenthSchedule) ; etc.

Limited Company Contrasted with Partnership. A limitedcompany has certain advantages which the sole trader or apartnership does not have, and the foliowing contrasted summaryof the respective positions in law may be useful to students :

(a) In a limited company, the liability of the individualmembers is confined to the amount of money which each hasagreed to contribute to the common capital fund. If, for

example, in response to an invitation contained in a prospectusissued by the Practice Company, Limited, a person subscribesfor ten ordinary shares of 1 each, as soon as he has paid to the

company the sum of ten pounds his liability is at an end.If he purchases from a former holder ten shares of 1 on each ofwhich ten shillings has been called up and paid, his liability tothe company is restricted to the sum of 5. No member can bebound by any alteration in a memorandum or articles requiringhim to take more shares unless he has agreed in writing beforeor after the alteration to be bound (S. 22). Moreover, wherea person holding partly paid shares ceases to be a memberhe is not liable on the shares after the expiration of one yearfrom the date when he ceased to be a member, and even duringthat year his liability is contingent only (see p. 519). But asole trader who has risked a capital of, say, 1,000, or a personwho has contributed in partnership the same sum, has nosuch assurance that his loss will be confined to the sum hehas risked. Both are liable to their last penny for all thedebts and obligations of the business, and these may greatlyexceed the amount of capital at risk. And the period of theirliability is not restricted as with members of a company, butis, generally speaking, co-extensive with the law of contractand of tort. An exception is to be noted, viz. where a partneris registered under the Limited Partnerships Act, 1907, as alimited partner. A limited partner is liable only for the sumhe has agreed to contribute to the partnership assets, but, even

14 A MANUAL OF

so, such a partner must be associated with one or more generalpartners who are fully liable for the whole debts of the firm.Limited partnerships are not common ; the necessity for thiskind of limitation has largely been destroyed by the immunitysecured by registration as a private joint stock company.

(6) The individual members of a company cannot be suedor made bankrupt for the debts or obligations of the company.The company is a separate entity from the individual members.Members of a company, as already said, are liable only forthe amount unpaid on the nominal value of the shares they hold,and no one but the company (or the liquidator) can sue themfor payment of the unpaid balance. A sole trader or a partnercan be sued for the debts of the business and made bankrupt,if he does not satisfy judgment obtained.

(c) To a person who desires to make provision for his familythe limited company makes a special appeal. He may formhis business into a private limited company, and at once, orby degrees, relinquish active participation in the business,while retaining control by means of his voting power. By thetransfer of his shares, either into the names of his dependentsor into the names of trustees for them, he may make suchprovision for them as he desires. Gifts inter vivos are notliable to estate duty if made irrevocably and more than threeyears before death, and this, in these days of high taxation,affords means for welcome relief.

(d) The death or bankruptcy of a member of a companydoes not affect the company's entity. The member's holdingautomatically devolves, in the first case, according to his willor the laws of intestacy ; in the second case, upon the trusteein bankruptcy. On the other hand, the death, retirement, orbankruptcy of a partner, or the admission of a new partner,dissolves the partnership (apart from special provision to the

contrary in the original contract of partnership), and a newpartnership agreement must be entered into.

(e) By association of a large number of people in joint stockenterprise it is possible to gather together scattered units of

capital, which separately would be negligible, but collectivelyare sufficient to set going and carry on a business of magnitudetoo great for the resources of any one person, or even of several

SECRETARIAL PRACTICE 15

persons united in partnership. In a partnership, all or mostof the partners will, in view of their separate and imponderableliabilities, desire to be actively engaged in the management ofthe business, but, in a company, the management of the businesscan be delegated to the most skilled directors, managers, andothers that adequate remuneration will attract to the serviceof the company.

(/) The conversion of a private business into a limitedcompany is probably the most certain and equitable way ofrealising the goodwill attaching to the business. Deferredshares can be issued in payment for the goodwill, and these willcarry the right to the whole or the greater part of the profitremaining after prior rights of other classes of shareholders todividend have been satisfied. The measure of the value of thegoodwill of a business is its power to earn profits in excess of an

adequate return on the capital of the company, having regardto the average yield on gilt-edged securities, the risks run byinvestors in the company, and so on. But see p. 72.

The following possible disadvantages ought, however, tobe considered :

(a) Sur-tax payers may be liable to pay tax on undistri-buted profits in cases where a company comes within S. 21 ofthe Finance Act, 1922 (as amended) (see pp. 614 et seq.}.

(b) The flotation expenses are heavy. There is not onlythe ten shillings per cent, capital duty to pay, but also thememorandum fees, deed stamps, filing fees, printing charges,legal expenses, etc.

(c) Credit may be adversely affected. This was commonlythe case years ago when a private business was turned intoa limited company, owing largely to the fraudulent intentwhich frequently dictated the manoeuvre. But that species offraud has been severely checked by the Courts, and, nowadays,so far from the credit of a business being lowered by its beingfloated as a company, it is far more likely to be enhanced byreason of the increase in its capital resources. The files atBush House, London, or Exchequer Chambers, Edinburgh,afford a ready means of ascertaining with fair precision thefinancial standing of a company.

16 A MANUAL OF

(d) All dividends are accounted"

unearned " income forthe purposes of assessment to income tax. But where theformer proprietors of a partnership business would be pre-judiced in this respect by reason of the conversion of thebusiness into a company, this drawback can easily be overcomeby allocating the greater part of their remuneration as directors'fees, which for income tax purposes are accounted as

"

earned "

income.

(e) The restrictions on changes in the constitution, objects,and regulations of a company ; the formalities attending itsadministration

;and the publicity inseparable from observing

the statutory requirements may be considered disadvantage-ous, but the fact that the aggregate capital of companiesregistered under the Acts in England and Scotland nowexceeds the colossal sum of 5,500,000,000 would seem to showthat these objections, if objections they be, are not serious.

Companies Limited by Guarantee. Companies limited byguarantee are usually formed for carrying out some objectfor example, to raise the status of secretaries and to furthertheir professional interests in which all the members of thecompany are mutually concerned, and to secure which theyannually contribute fees, subscriptions or donations. Other

objects have been mutual insurance against various kinds ofrisk, marine, accident, and so on. Such a company may or maynot be registered with a capital divided into shares, althoughvery few such companies have been registered with a share

capital. But if power be taken to carry on a business as wellas to carry out the mutual object, the appropriate course is toregister with a share capital. A company limited by guarantee,having also a share capital, may be a private company, but notif it has no share capital. Every company limited by guaranteemust file articles (S. 6). The contents of the memorandum ofsuch a company are enumerated in S. 2 (see p. 33). It is to benoted that the fees payable on registration, if the guaranteecompany has no share capital, depend upon the number ofmembers with which the company purposes to be registered(see p. 584).

At one time, companies limited by guarantee could beformed, which by their articles divided the undertaking of the

SECRETARIAL PRACTICE 17

company into shares or interests of no nominal value. Suchassociations are forbidden by the following section of the Act,which first found a place in company legislation in the Com-panies Act, 1900.

(1) In the case of a company limited by guarantee and not havinga share capital, and registered on or after the first day of January,nineteen hundred and one, every provision in the memorandum orarticles or in any resolution of the company purporting to give anyperson a right to participate in the divisible profits of the companyotherwise than as a member shall be void.

(2) For the purpose of the provisions of this Act relating to thememorandum of a company limited by guarantee and of this section,every provision in the memorandum or articles, or in any resolution,of a company limited by guarantee and registered on or after the dateaforesaid, purporting to divide the undertaking of the company intoshares or interests shall be treated as a provision for a share capital,notwithstanding that the nominal amount or number of the sharesor interests is not specified thereby (S. 21).

The form of

(a) The memorandum and articles of a company limitedby guarantee and having a share capital ;

(6) The memorandum and articles of a company limitedby guarantee and not having a share capital ;

must respectively be in accordance with the forms set out inTables D and C in the First Schedule of the Act (S. 11).

Where a guarantee company has a share capital it mustkeep the same books, make the same returns, and hold thesame general meetings as a company limited by shares.

Where a guarantee company has no share capital, thestatutory meeting is not required, but the same general meetingsmust be held as in the case of a company limited by sharesThe returns to be filed are dealt with under the appropriateheadings hereafter. Where the company is controlled by anexecutive committee, the members of the committee are themanagers of the company.

A guarantee company having a share capital, can reduce itscapital, if it is so authorised by its articles, in the same way asa company limited by shares (S. 55). A guarantee companywithout a share capital can reduce the number of its membersby following the procedure laid down by its articles.

Unlimited Companies. Companies registered with un-limited liability have been registered in increasing numbers inrecent years, mainly in connection with private estates and forsimilar private purposes. The members of an unlimited

18 A MANUAL OF

company are liable for the company's debts in proportion totheir respective interests in the company, and that liabilitycontinues for a period of one year from the date of their ceasingto be members. The provisions relating to unlimited companiesare contained in SS. 1, 6, 7, 11, 16 and 53 of the Act.

The memorandum must state (a) the name of the company[the word

" Limited " will not appear as part of the name],(b) the situation of the registered office, i.e. whether in Englandor Scotland, (c) the objects of the company (S. 2). Printedarticles of association must be registered with the memorandum(S. 6). These, if the company has a share capital, must includea statement of the amount of the capital, and be based uponTable E, contained in the First Schedule of the Act. If the

company has no share capital, the articles must then include astatement of the number of members with which the companyproposes to be registered in order to enable the registrar todetermine the registration fees (S. 7).

An unlimited company has not to pay capital duty onregistration, and it need not file a statement of nominal capital,or a return of allotments, or contracts for the issue of shares forconsideration other than cash. Apart from these exceptions,such a company must file the same returns as a companylimited by shares.

Since the capital, if any, is fixed by the articles, it may beincreased or reduced by special resolution, and, subject to thearticles, may be repaid to the members without sanction of thecourt.

Registration of Unlimited Company as Limited. SS. 16and 53 of the Act provide as follows :

S. 16. (1) Subject to the provisions of this section, a companyregistered as unlimited may register under this Act as limited, or acompany already registered as a limited company may re-registerunder this Act, but the registration of an unlimited company as alimited company shall not affect the rights or liabilities of the companyin respect of any debt or obligation incurred, or any contract enteredinto, by, to, with, or on behalf of the company before the registration,and those rights or liabilities may be enforced in manner providedby Part IX of this Act in the case of a company registered in pur-suance of that Part.

(2) On registration in pursuance of this section the registrar shallclose the former registration of the company, and may dispense withthe delivery to him of copies of any documents with copies of which hewas furnished on the occasion of the original registration of thecompany, but, save as aforesaid, the registration shall take place in

SECRETARIAL PRACTICE 19

the same manner and shall have effect as if it were the first registrationof the company under this Act, and as if the provisions of the Actsunder which the company was previously registered and regulated hadbeen contained in different Acts from those under which the companyis registered as a limited company.

S. 53. An unlimited company having a share capital may, by itsresolution for registration as a limited company in pursuance of thisAct, do either or both of the following things, namely :

(1) Increase the nominal amount of its share capital bymcreavSing the nominal amount of each of its shares, but subject tothe condition that no part of the increased capital shall be capableof being called up except in the event and for the purposes of thecompany being wound up ;

(2) Provide that a specified portfou of its uncalled share capitalshall not be capable of being called up except in the event and forthe purposes of the company being wound up.

In order to register as limited, the company must first holda meeting and pass a special resolution that the companyshall be registered under the Companies Act, 1929, as a com-pany limited by shares by the name of Limited.

The application form for a certificate of incorporation as alimited company (Form No. 17) must then be filled up andsigned by a director, secretary, or other officer of the company.This form must be accompanied by the following documents, incompliance with S. 323 of the Act :

(a) A copy of the instrument constituting the unlimitedcompany. But by S. 16, s.-s. (2), the registrar may dispensewith copies of any documents copies of which were furnishedto him when the company was registered originally.

(b) List of the members, giving their names, addresses, andoccupations, made up to a date not more than six clear daysbefore the day of registration, with the addition of the sharesor stock held by them respectively, distinguishing each shareby its number, if the shares are numbered.

(c) Statement of the nominal share capital of the companyand the number of shares into which it is divided, or theamount of stock of which it consists, and the number of sharestaken and the amount paid on each share.

(d) Copy of the special resolution assenting to its registrationas a limited company, and adding the word

" Limited " to itsname.

(e) A statutory declaration signed by any two directors,or other principal officers of the company, verifying the

20 A MANUAL OF

particulars set forth in the documents above mentioned(S. 325).

On payment of capital duty and registration fees, theregistrar issues a certificate certifying that the company,previously registered as unlimited, is limited (S. 329).

The Seal. Every company registered under the Act must,from the date of incorporation, have a common seal (S. 13,s.-s. (2)) on which its name must be engraven in legible characters(S. 93, s.-s. (1) (6)). Any director, manager, or officer of thecompany, or any person on its behalf, who uses or authorisesthe use of any seal, purporting to be a seal of the company, onwhich the full name (including the word Limited) is not soengraven, is liable to a fine (S. 93, s.-s. (4)).

The mode of using the seal is usually specified by thearticles, or delegated by the articles to the directors. Table A,Art. 71, requires that it be affixed only by authority of aresolution of the board of directors, and in the presence of adirector and of the secretary, or such other person as thedirectors may appoint for the purpose ; and that those personsmust sign every instrument to which the seal is affixed intheir presence.

"In favour of a purchaser" a deed is deemed to havebeen duly executed by a company (and any other corporationaggregate) if its seal be affixed thereto in the presence of itssecretary or other permanent officer or his deputy, and amember of its board of directors

;and where a seal purporting

to be the seal of the company has been affixed to a deed,attested by persons purporting to be persons holding suchoffices, the deed is deemed to be duly executed (Law of PropertyAct, 1925, S. 74, s.-s. (1)).

A Register of Sealed Documents should be kept to recordparticulars of all documents on which the seal is used, the dateof the resolution authorising the sealing and the names of theattesting persons. The seal is kept under lock and key, thekeys being in custody of the chairman, one other director, andthe secretary.

The board of directors, council or other governing bodyof a corporation aggregate may, by resolution or otherwise,appoint an agent, either generally or in any particular case,to execute on behalf of the corporation any agreement or otherinstrument not under seal in relation to any matter within the

SECRETARIAL PRACTICE 21

powers of the corporation (Law of Property Act, 1925, S. 74,s.-s. 2).

Where a person is authorised under a power of attorney orunder any statutory or other power to convey any interest in

property in the name or on behalf of a corporation sole or

aggregate, he may as attorney execute the conveyance bysigning the name of the corporation in the presence of at leastone witness, and in the case of a deed by affixing his own seal,and such execution shall take effect and be valid in like manneras if the corporation had executed the conveyance (S. 74,s.-s. (3) ulem).

Where a corporation aggregate is authorised under a powerof attorney or under any statutory or other power to conveyany interest in property in the name or on behalf of any other

person (including another corporation), an officer appointedfor that purpose by the board of directors, council or othergoverning body of the corporation, by resolution or otherwise,may execute the deed or other instrument in the name of suchother person ; and where an instrument appears to be executedby an officer so appointed, then in favour of a purchaser theinstrument shall be deemed to have been executed by an officerduly authorised (S. 74, s -s. (4) idem).

Notwithstanding this section, any mode of execution orattestation authorised by law or by practice or by the statute,charter, memorandum or articles, deed of settlement or otherinstrument constituting the corporation or regulating theaffairs thereof, shall (in addition to the modes authorised by thissection) be as effectual as if this section had not been passed(S. 74, s.-s. (6) idem).

Execution of Deeds Abroad. By Section 31 :

(1) A company may, by writing under its common seal, empowerany person, either generally or in respect of any specified matters, asits attorney, to execute deeds on its behalf in any place not situate inthe United Kingdom.

(2) A deed signed by such an attorney on behalf of the companyand under his seal shall bind the company and have the same effectas if it wore under its common seal.

See p. 446 as to company having an official seal.Contracts. As to the making of contracts, SS. 29 and 36

provide as follows :

S. 29. (1) Contracts on behalf of a company may be made asfollows :

22 A MANUAL OF SECRETARIAL PRACTICE

(a) A contract which if made between private persons wouldbo by law required to be in writing, and if made according toEnglish law to be under seal, may be made on behalf of the companyin writing under the common seal of the company :

(6) A contract which if made between private persons would beby law required to be in writing, signed by the parties to be chargedtherewith, may be made on behalf of the company in writing signedby any person acting under its authority, express or implied :

(c) A contract which if made between private persons would bylaw be valid although made by parol only, and not reduced intowriting, may be made by parol on behalf of the company by anyperson acting under its authority, express or implied.(2) A contract made according to this section shall be effectual

in law, and shall bind the company and its successors and all otherparties thereto.

(3) A contract made according to this section may be varied ordischarged in the same manner in which it is authorised by thissection to be made.

(4) A deed to which a company is a party shall be held to bevahdly executed in Scotland on behalf of the company if it is executedin accordance with the provisions of this Act or is sealed with thecommon seal of the company and subscribed on behalf of the companyby two of the directors and the secretary of the company, and suchsubscription on behalf of the company shall be binding whetherattested by witnesses or not.

S. 36. (1) A company limited by shares or a company limited byguarantee and having a share capital shall not previously to thestatutory meeting vary the terms of a contract referred to in theprospectus, or statement in lieu of prospectus, except subject tothe approval of the statutory meeting.

(2) This section shall not apply to a private company.

In the special case of contracts by bill of exchange orpromissory note, S. 30 says :

A bill of exchange or promissory note shall be deemed to have beenmade, accepted, or endorsed on behalf of a company if made, accepted,or endorsed in the name of, or by or on behalf or on account 01, thecompany by any person acting under its authority.

See also pp. 38, 227, and 459 with regard to the use of theword " Limited," and the liability of those signing a bill or note.

CHAPTER IIIINCORPORATION AND FLOTATION OF A COMPANY LIMITED BY

SHARES

BEFORE a company can be registered under the CompaniesAct, 1929, the documents mentioned below must be depositedwith the registrar of joint stock companies for registration, 1and the prescribed fees paid. The steps to be taken prior tothis naturally depend upon whether the company is formed totake over an existing business, or to commence an entirely newbusiness.

The persons desiring to constitute themselves into a com-pany must prepare and leave with the registrar the followingdocuments :

(1) Memorandum of Association (see pp. 32 et sqq.).(2) Articles of Association (these, as will be seen, may be

dispensed with in certain cases) (see pp. 50 et sqq.).(3) Statement of the Nominal Capital (see p. 25).(4) List of persons who have consented to act as directors

(see p. 25).(5) Consent to act in writing of the directors appointed by

the articles.

(6) Undertaking by the directors appointed by the articlesto take up and pay for their qualification shares (if any) pre-scribed by the articles, unless they have signed the memorandumtherefor (see p. 25).

(7) Statutory declaration that the requirements of theAct have been complied with (see p. 26).

The documents numbered (4), (5) and (6) above are notrequired when registering a private company ; nor is thatnumbered (3) in the case of an unlimited company or a guaranteecompany without a share capital.

It is also advisable, when possible, to file at the same timea notice of the situation of the Registered Office (see p. 26).

1 The word " registration " is used in the 1929 Act where " filing"

was used in former Acts. The registrar satisfies himself that thedocuments are in order and places them upon the file which he keeps inrespect of the company (see p. 24).

23

24 A MANUAL OF

If it be desired that the company be domiciled in England(which includes Wales), the documents are deposited atBush House, London ; if in Scotland, at Exchequer Chambers,Edinburgh. On 1st January, 1922, the Irish Free Stateceased to be part of the United Kingdom for the purposes ofthe Act. Companies registered in Northern Ireland are treatedas foreign companies if they establish a place of business inGreat Britain (see pp. 60 et seq.). The Companies Act, 1929,does not apply to Ireland.

The practical and typical procedure in England is asfollows :

(1) The necessary documents are lodged at Bush House.It is advisable that this be done by an agent who is in a

position to answer any questions regarding them. He willusually be asked to call again on the following day. In themeantime, the officials inspect the documents, and on thesecond call they point out any defects. If the defects are ofminor consequence, they may be remedied on the spot : iffundamental, the documents may have to be taken away to beamended and the amendments initialled by the subscribers.

(2) When the papers are approved, the fees must be paid,and on the second official day thereafter (unless subsequentlydiscovered defects in the papers have to be put right) theCertificate of Incorporation is issued.

If the fees are paid by cheque, it is necessary for this to becleared, causing a further delay of from two to three days.Where it is important to get the company registered quickly,e.g. in order to enter into service agreements or contracts, thefees should be paid in cash, or by banker's draft made payableto the Commissioners of Inland Revenue.

The documents thus lodged are filed by the registrar,and become open to public inspection at Bush House. Anyperson desiring to see them may attend at the CompaniesRegistration Office and search the alphabetical list of com-panies for the name and number of the company. Theseparticulars, together with the name, address and description ofthe applicant, must then be entered by him on a stamped form,for which he pays the fee of Is. This form is then handed toone of the officials in the Search Department, who brings thefile to the applicant. In this file appear all the documentsrequired to be registered since the incorporation of the company,

SECRETARIAL PRACTICE 25

and notes may be extracted in pencil. If copies are required,they may be obtained on payment of the prescribed fees (S. 314,s.-s. (1)).

Certified copies or extracts given and certified to be a truecopy under the hand of the registrar are in all legal proceedingsadmissible in evidence as of equal validity with the originaldocuments (S. 314, s.-s. (3)). It is not necessary to prove theofficial position of the registrar, but where the certificate ordocument is required for use abroad, the registrar's certificateis generally authenticated by a notarial certificate.

The Statement of Nominal Capital. This needs littlecomment, being a straightforward statement showing theamount of the authorised capital. On this form is impressed astamp for the Companies' Capital Duty at ten shillings per cent,on the entire nominal capital as stated in the memorandum.

List of Persons who have consented to act as Directors,etc. With the exception of (a) private companies, (6) companiesnot having a share capital, (c) companies that before becomingpublic companies were private companies, and (d) a prospectusissued by a company after the expiration of one year from thedate on which it was entitled to commence business, no personcan be appointed director by the articles or be named as adirector in any prospectus or statement in lieu unless he hasfulfilled certain statutory requirements. These requirementsare set out in S. 140 as follows :

S. 140. (1) A person shall not be capable of being appointeddirector of a company by the articles, and shall not be named as adirector or proposed director of a company in a prospectus issued byor on behalf of the company, or as proposed director of an intendedcompany in a prospectus issiied in relation to that intended com-pany, or in a statement in lieu of prospectus delivered to the registrarby or on behalf of a company, unless, before the registration of thearticles or the publication of the prospectus, or the delivery of thestatement in lieu of prospectus, as the case may be, he has by himselfor by his agent authorised in writing

(a) signed and delivered to the registrar of companies forregistration a consent in writing to act as such director; and

(b) either(i) signed the memorandum for a number of shares not less

than his qualification, if any; or(n) taken from the company and paid or agreed to pay for his

qualification shares, if any; or(m) signed and delivered to the registrar for registration an

undertaking in writing to take from the company and pay for hisqualification shares, if any ; or

(iv) made and delivered to the registrar for registration a

26 A MANUAL OF

statutory declaration to the effect that a number of shares, notless than his qualific