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^^U'uJ/f^/^M f^ yj- 
 
 The Unconditional 
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 Managing Director. 
 
 TECHNICAL ACCOUNTANCY LITERATURE 
 
 Do You Want the best works on, 
 
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THE 
 
 Shareholders' and Directors' Manual 
 
 CONTAINING A COMPENDIUM OF THE LAWS HELATINO TO JOINT STOCK COM- 
 PANIES, AKD PRACTICAL INFOHMATION AS TO THE STEPS TO HE 
 TAKEN AND THE PROOFS TO RE FURNISHED IN 
 APPLYING FOR CHARTERS OF INCORPORATION 
 
 UNDER THE 
 
 ACTS OF THE DOMINION OF CANADA 
 
 AND OF THE PROVINCES THEREOF, 
 
 RELATING TO THE INCORPORATION OP 
 
 Joint Stock Companies m Letters Patent, 
 
 TOGETHER WITH 
 
 INFORMATION RESPECTING THE ORGANIZATION AND MANAGEMENT 
 OF SUCH COMPANIES, 
 
 AND 
 
 A Number of Forms and By-Laws Suitable for the Use Thereof. 
 
 BY 
 
 J. D. WARDE, 
 
 OF THE PROVINCIAL SECBETABY'S DEPARTMENT, TORONTO. 
 
 Fifth Edition, Revised and Enlarged. 
 Price $2. 
 
 r 
 
 TORONTO ; 
 
 THE CANADA RAILWAY NEWS CO., Limited 
 
 1898. 
 
Entered accordint^ to Act of the Parliament of Canada, in the year one 
 thousand eifjht hundred and ninety-seven, by J. D. Wakue, at tlie 
 Department of Agriculture, Ottawa. 
 
ne 
 
 he 
 
 THIS VOLUME 
 
 18 
 
 BY K'ND PERMISSION, KESPECTFmiiY INSCRIBED 
 
 TO 
 
 THE HONOURABLE E. J. DAVIS, M P.P. 
 
 SECRETARY OF THE PROVINCE OF ONTARIO, 
 
 nv 
 THE AUTHOR. 
 
PREFACE TO FIRST EDITION. 
 
 Haviufj for some years, in connection with his ilntics in 
 the Pi'cvincial Secretary's Department, hail cliar^e of the; 
 ap|)lications for eluirter.s under The Ontario Joint Stock. 
 t'o)ni)<niit'.s Lctti't'.H Patent Act, and noticinj^ the small per- 
 centa^je of such applications that were in proper form, it 
 occurred to the writer that a work containing practical 
 information respecting the steps to be taken in the forma- 
 tion, incorporation and mana<;ement of a Joint Stock Com- 
 pany would be of advantage as well to intending applicants 
 and the general public, as to Directors, Shareholders and 
 Officers of existing companies. VV^ith this object in view, 
 the following pages have been prepared. 
 
 J. D. W. 
 TouoxTo, July, 1884. 
 
 PREFACE TO FOURTH EDITION. 
 
 On issuing the Fourth Edition of this work, the author 
 begs to express his thanks for the favourable reception the 
 former editions have met with. As he has before said, the 
 book is not put forth as a legal text book, or as a competitcn* 
 with those numerous and comprehensive volumes which 
 deal with the law affecting Joint Stock Companies in all 
 its various details. The aim of the author is to supply a 
 useful, practical manual for those engaged either in the 
 formation of new companies, or holding office in those 
 already in existence, and that may be of assistance to the 
 legal profession, containing, as it does, a complete set of 
 forms approved of by the Departments charged with the 
 issue of Letters Patent, etc. 
 
 J. D. Waude. 
 Toronto, July, 1892. 
 
PREFACE TO FIFTH EDITION. 
 
 Since the Fourth Edition of tliis work was published 
 the Ontario Acts rehiting to the Incorporation and ]{e<ru- 
 hition of Joint Stock Companies and Mininij Companies 
 have been consolidated, amended and revised. 
 
 These Acts, to^a^thcr with the now comprehensive 
 British Columbia Act respecting Companies, will be found 
 in Part II. 
 
 The author's thanks are due those gentlemen who so 
 kindly reviewed the chapters sent them, especially Mr. J. M. 
 ('lark, Barrister-at-Law, of Counsel for the Government of 
 Ontario; Mr. Geo. E.Lumsden, Assistant Provincial Secre- 
 tary, and Mr. George Edwards, F.C.A. 
 
 J. D. Waudb. 
 
 Pauuament BuiLDiyas, 
 Tc..c:,ro, Isr Dkoembkr, 1897. 
 
 I 
 
 * 
 

 TABLE OF CONTENTS. 
 
 PART J. 
 
 COMPENDIUM OF THL LAWS RELATING 
 
 JOINT sToc;<: companies. 
 
 TO 
 
 NATURE OF A COMPANY. 
 
 Definition of a Company— How Formed— Inducements to the 
 Formation of a Company 
 
 PAOK. 
 
 1-2 
 
 CHAPTER I. 
 
 PROMOTION OF COMPANY. 
 
 Form of Prospectus—Effect of Misrepresentation in— Where 
 Capital Vtiries from Amount Stated in Prospectus— Appli- 
 cation for Shares— May be Revoked before Allotment- 
 Allotment of Shares-Letter of Allotment— Agreement 
 Coniplete by Allotment and Notice— Subscribers to Stock 
 Book Bound, altliouHJi no Stock Allotted to Them— Mar- 
 ried Women as Subscribers— Infant as a Subscriber— 
 1 relinunary Expenses— Recovery of Deposit ... 
 
 3-10 
 
 CHAPTER II. 
 
 FORMATION AND INCORPORATION OF COMPANIES. 
 
 Incorporation by Letters Patent-Name of Company— Use of 
 the Word " Limited "—Objects-Head Ottice or Chief 
 1 lace of Busuiess— Residence of Company— Amount of 
 Capital, Nominal and Paid-up— May be Reduced or 
 Increased— Division into Shares— Amount of each Share 
 — i'ormerly only Petitioners Incorporated by Letters Pa- 
 tent— Commencement of Business 
 
 II IH 
 
 CHAPTER IIL 
 
 DIRECTORS. 
 
 Introductory-Acceptance of Office by Directors- Power to 
 t il \ acancies— Power to Remove Directors— Provisional 
 — Number of Board— Preference Shareholders to Select 
 Directors-Remuneration of-Qualification of-Disquali- 
 hcation of-Acts of de facto Directors Valid- -Retirement 
 
vm 
 
 TABLE OF CON'J'EXT.S. 
 
 of — Election of — Term of Office of— Powers of — Status 
 of — Hi^ht of, to see Accounts, etc. — Contracts between 
 Directors and Company — General llemarks concerning 
 Directors 
 
 PAQK. 
 
 19-35 
 
 CHAPTER IV. 
 
 MEETINGS. 
 
 Introductory — Scope of the Subject— Notice— First Meeting — 
 Ordinary and Extraordinary Meetings — Where Meetings 
 may bo Held — Quorum — Voting — Who may Vote — The 
 Majority of Votes Cast shall PJlect — Procedure at General 
 Meetings — Adjourned Meetings- Stockholders can Act 
 only at Corporate Meetings— Directors' Meetings — Pro- 
 ceedings of Directors 
 
 36-50 
 
 CHAPTEll V. 
 
 BY-LAWS, BOOKS, AUDITORS, CONTRACTS, SEAL. 
 
 By-laws, Effect of — Difference between a Resolution and a 
 Bylaw — Method of Drafting a By-law— Books to be 
 Kept — Where Books are to be Kept — Statement of Income 
 and Expenditure to be Made — Inspection of Books — 
 Auditors— Method of Drafting, .Signing and Sealing Cor- 
 porate Deed or Contract — Necessity of Seal — Seal — Cor- 
 porate Instruments Made in Name of Officer Enforceable 
 against Company 
 
 alGG 
 
 CHAPTER VI. 
 
 STOCK, CALLS, Etc. 
 
 Definition of Capital Stock ; of Corporator, Subscriber, Share- 
 holder and Stockholder ; of Share of Stock ; of Debenture 
 — Price of Shares — Classes of Stoiik, Common and Pre- 
 ferred ; Deferred ; Overissued ; Watered or Fictitious — 
 Methods of Issuing Watered or Fictitious Stock — Certifi- 
 cate of Shares — Company Should Require Surrender of 
 the Outstanding Certificate — Alleged Loss of the Old 
 Certificate — Allotment of Stock -JNIethods of Issuing 
 Stock — Preferential Stock— When Shares are not Paid in 
 Cash — Paid-up Shares — Right of Transfer of Shares- 
 Stock, how made — Liability of Members on Stock — How 
 Liability may be Incurred — How Repudiated — The Lia- 
 bility of an Agent as Transferor or Transferee— Liability, 
 how Terminated; by Payment in Full; by Surrender of 
 Shares ; by bona fide. Sale— The Various Remedies for 
 Non-payment of Shares— Forfeiture of Shares— Notice in 
 Case of — Tender by Stockholder before Forfeiture — Im- 
 proper Cancellation of Stock— Calls 
 
 07-94 
 
 ft 
 
 h 
 
TABLE OF CONTENTS. ix 
 
 GE. 
 
 -ar» 
 
 PAGE. 
 
 CHAPTER VII. 
 
 DIVIDENDS. 
 
 Regulations Respecting— Nature of— Cannot be Enforced until 
 Declared -Stock Dividends—Discretion of Directors us 
 to Declaring Dividends— To Whom the Corporation is to 
 Pay tlie Dividends— To Whom the Dividend Belongs - 
 Dividends Must be Equal and without Preference— 
 When Declared is a Debt Due Absolutely to the Share- 
 holder— Right of Company to apply Dividends to the 
 Payment of Debts Due to it by the Shareholder O.j-lOl 
 
 5(» 
 
 CHAPTER VIII. 
 
 THE STOCKHOLDERS' RELATION TOWARDS THE 
 CORPORATION AND HIS LIABILITY TO CORPO- 
 RATE CREDITORS UPON UNPAID SUBSCRIP- 
 TIONS. 
 
 Relation of Stockholders towards the Corporation— The Ex- 
 pulsion of Stockholders— In the United States Unpaid 
 Subscriptions a Trust Fund for the Benefit of Creditors 
 — Unpaid Subscriptions can be Reached only after .Judg- 
 ment against the Company, and Execution Returned Un- 
 satisfied 
 
 10'2-lCl 
 
 )(j 
 
 CHAPTER IX. 
 
 FRAUDS OF DIRECTORS, PROMOTERS, Etc. 
 
 Classes of Stockholders' Wrongs- Director or other Corporate 
 Officer Interested in Construction Company and Secret 
 Gjfts to— Frauds by Promoters on the Corporation— Pur- 
 chases by Directors from the Corporation and Purchases 
 at Foreclosure Sales- Loans by tlie Directors to tlie Cor- 
 poration ; Mortgages by the Corporation to Directors, and 
 the Right of a Corporation, Solvent or Insolvent, to give 
 a Mortgage or Assignment of its Propertv to a Director 
 m order to Prefer the Payment of his JJebt- Frauds bv a 
 Majority of the Stockholders upon the Minority- Directors 
 niust use Ordinary Care and Diligence in the Management 
 of the Corporation and the Transaction of its Business. . 
 
 105-110 
 
 CHAPTER X. 
 
 CONVERSION OF BUSINESS CONCERNS INTO JOINT 
 
 STOCK < :panies. 
 
 Inducements to Conversion— Examples of Cases of Conver- 
 sion -" One Man " Company— Preliminarv Steps towards 
 Conversion 
 
 Ill 117 
 
TABLE OF CONTEXTS. 
 
 PART II. 
 
 ACTS OF THE DOMINION OF CANADA, AND THE 
 
 PROVINCES ' ';ei^eof, relating to joint 
 
 b^. ?.K COMPANIES. 
 
 ONTARIO LEGISLATION. 
 
 I'AOK. 
 
 Gkneral Remahks , 120 
 
 Chap. 191, 11. S. 0. 1897 — An Act respecting .;he Incorporation and 
 
 Ref^ulation of Joint Stock Companies 123 
 
 Chap. 197, R. S. 0. 1897 — An Act respecting the Incorporation and 
 
 Regulation of Mining Companies 221 
 
 Chap. 215, R. S. O. 1897— An Act respecting the Changing of 
 
 the Names of Incorporated Companies 232 
 
 Chap. 216, R. S. O. 1897— An Act respecting the Liability of Di- 
 rectors 231 
 
 Chap. 217, R. S. O. 1897— An Act to prevent Fraudulent State- 
 ments by Companies and others 239 
 
 Chap. 219, R. S. O. 1897 — An Act respecting Returns required 
 
 from Incorporated Companies 211 
 
 TABLE OF FORMS. 
 
 NO. OF PKELIMINARY. 
 
 FORM. PA(1E. 
 
 1. Prospectus 177 
 
 2. Notice of Allotment of Shares 178 
 
 3. Instalment Scrip 1 79 
 
 4. Stock Certificate 180 
 
 F0R.MS FOR GRTAINIXd INCORPORATION ItY LKTTERS PATENT. 
 
 r-i. Petition for letters patent 181 
 
 (>. Affidavit verifying petition and as to name of company .... 183 
 7. Power of Attorney to sign Petition, and Stock Book, and 
 
 Memorandum of Agreement 184 
 
 H. Affidavit verifying power of Attorney 181 
 
 9. Affidavit verifying signatures to petition 18.5 
 
 10. Affidavit verifying signatures to petition when signed under 
 
 Power of Attorney 180 
 
 11. Memorandum of Agreement and Stock Book 187 
 
 12. Affidavit verifying signatures to Memorandum of Agreement 
 
 and Stock Book 188 
 
 FORMS TO INCREASE THE CAPITAL STOCK. 
 
 13. Bylaw providing for increase 188 
 
 14. Affidavit verifying bylaw and proving sanction of same .... 189 
 
 15. Bylaws of company regulating calling of general meeting .. 190 
 
 16. Affidavit verifying bylaws regulating calling of meetings ... 191 
 
TABLE OF CONTENTS. 
 
 XI 
 
 NO. OF 
 
 rouM. 
 
 17. 
 
 18. 
 
 Notice in local newspaper callinf* general meeting 
 
 Aflidavit proving due calling of meeting and verifying notice 
 
 in local newspaper 
 
 17. Notice in Ontario Gazette calling general meeting 
 
 1*,). Affidavit proving due calling of general meeting where no bv- 
 law for the purpose has been passed, and verifying notice 
 in local paper and Ontario Gazet'e 
 
 20. Petition for Supplemontary Letters Patent 
 
 21. Affidavit verifving signatures to petition 
 
 2H. Affidavit respecting bona Jide clmracter of increase 
 
 TO DECllEASE THE CAPITAL STOCK. 
 
 The same forma are necessary as for increasing the capital, 
 and tliose given for tliat purpose may be adapted. 
 
 PAGE. 
 
 l'.»l 
 
 I'Jl 
 1(»I 
 
 192 
 
 i<»;j 
 
 194 
 195 
 
 FORMS TO INCREASE THE NUJIIJEK OF DIRECTORS. 
 
 23. By-law increasing the number 19.) 
 
 14. Aflidavit verifying By-law and proving sanctioning of same. Irt9 
 
 24. Notice publishing Bylaw in Ontario Gazette 19(5 
 
 2.1. Affidavit proving same 190 
 
 l."). By-laws of Company xegulating the calling of a general 
 
 meeting 190 
 
 l(i. Affidavit verifying same 191 
 
 17. Notice m local newspaper calling general meeting 191 
 
 18. Aflidavit proving due calling of meeting and verifying notice 
 
 in local paper , 191 
 
 17. Notice in Ontario Gazette calling general meeting 191 
 
 19. Affidavit proving due calling of general meeting wiiere no 
 
 By-law for the purpose has been passed, and verifying 
 notice in local paper and Ontario Gazette 192 
 
 TO DECREASE THE NUMltER ^F DIRECTORS. 
 
 The same forms are necessary as for increasing, and those 
 given above may be adapted. 
 
 
 FORJIS FOR CHAN'OING THE HEAD OFFICE. 
 
 26. By-law charging 197 
 
 14. Affidavit verifying Bylaw and proving sanctioning of same. 189 
 
 24. Notice publishing Bylaw in Ontario Gazette 190 
 
 2;"). Aflidavit proving same 19G 
 
 15. By-laws of Company regulating the calling of a general 
 
 meeting 190 
 
 1(). Affidavit verifying same 191 
 
 17. Notice in local newspaper calling general meeting 191 
 
 18. Affidavit j,ioving due calling of meeting and verifying notice 
 
 in local paper 101 
 
 17. Notice in Ontario Gazette calling general meeting 191 
 
 19. Affidavit proving due calling of general meeting where no 
 
 By-law for the purpose has been passed, and verifying 
 
 notice in local paper and Ontario Gazette 192 
 
 FORMS FOR CHANGING THE NAME OF A COMPANY. 
 
 27. Petition for Order in Council changing name of Company.. . 198 
 29. Aflidavit verifying petition 199 
 
xu 
 
 TAHLE or (.ONTENTS. 
 
 NO. OF 
 
 FOKM. PAGE. 
 
 ■2S. Affidavit vei-ifyint,' si^^natnres to petition 198 
 
 bO. Evidence of Company'H solvency 199 
 
 MISCELIiANKOUS FORMS. 
 
 Bl. Notice of First General Meetin}4 200 
 
 82. Kequisitic;^ by Shareholders for Si)ecial General Meeting. . . . 200 
 
 33. By-law under Ontario Mininf^ Companies Act fixinf» rate of 
 
 discount 201 
 
 34. Another By-law tixinj^ rate of discount and limiting tran.ifer 
 
 of shares 201 
 
 35. Power of Attorney to make transfers, receive dividends, etc., 
 
 etc 202 
 
 3t). Another form of Flower of Attorney 203 
 
 37. Another form of Power of Attorney 203 
 
 38. Proxy 204 
 
 3!). Agreement for sale to proposed company of stock-in-trade, 
 
 etc., to form part of assets of company, and as to accept- 
 ance in payment thereof of sliares in the company, which 
 
 are to be considered as paid-up shares 205 
 
 40. Another form of agreement 206 
 
 41. Another form of agreement 207 
 
 42. Another form of agreement 208 
 
 43. List of Shareholders 209 
 
 4t. Affidavit verifying Summary and List of Shareholders 209 
 
 4o. Form of Register of Shareholders 210 
 
 4(i. Form of Register of Directors 210 
 
 47. Form of Register of Transfers 211 
 
 48. Form of Transfer of Shares 212 
 
 49. Form of Stock Ledger 213 
 
 -■,0. Form of Notice of Call 214 
 
 51. Form of Notice before Forfeiture 214 
 
 52. Form of Indemnity on issue of new Certificate 214 
 
 53. Form of Agreement appointing Secretary or Manager 215 
 
 54. Auditors' Certificate 216 
 
 ,") ). Agenda for Directors' Meetings 216 
 
 5(). Petition of Extra-Provincial Company for License 173a 
 
 57. Power of Attorney appointing Resident Attorney llSb 
 
 By-Laws, skt of 217 
 
 miscellaneous statutes. 
 
 British Columbia — An Act for the incorporation and regulation 
 
 of Joint Stock Companies and Trading Corporations. . . . 303 
 Dominion — Act respecting the incorporation of Joint Stock Com- 
 panies by Letters Patent, R. S. Canada, chap. 119 257 
 
 An Act to amend the Companies Act, 60 Vict. chap. 27 28.') 
 
 Manitoba — Consolidated Statutes, 1880-1, synopsis of 379 
 
 New Brunswick — 48 Vict. chap. 9, synopsis of 376 
 
 North-West Territories — Companies Ordinance, 1888, chap. 30, 
 
 synopsis of 380 
 
 Nov\ Scotia — Revised Statutes, chap. 79, synopsis of 382 
 
 Prince Edward Island, 51 Vict. chap. 14, synopsis of 382 
 
 Quebec — Incorporation of Joint Stock Companies, R. S. Quebec, 
 
 sec. 4694, et seq 286 
 
PAGE. 
 
 198 
 199 
 
 200 
 200 
 
 201 
 
 201 
 
 202 
 203 
 203 
 204 
 
 205 
 200 
 807 
 206 
 209 
 209 
 210 
 210 
 211 
 212 
 213 
 214 
 214 
 214 
 215 
 216 
 21G 
 173a 
 173/> 
 
 PART I. 
 
 COMPENDIUM OF THE L^WS RELATING TO JOINT 
 STOCK COMPANIES. 
 
 217 
 
 303 
 
 257 
 
 285 
 37!) 
 370 
 
 380 
 382 
 382 
 
 286 
 
I !; 
 
 I I 
 
THE SHAREHOLDERS' AND DIRECTORS' MANUAL 
 
 TNTllODUCTORY. 
 
 NATURE OF A COMPANY. 
 
 1. Definition of a Com- 
 
 pany. 
 
 2. How Formed. 
 
 3. Inducements to the 
 Formation of a Com- 
 pany. 
 
 1. Definition of a Company. 
 
 By a company is meant an association of many per- 
 sons who contribute money or money's worth to a com- 
 mon stoclc and employ it in some trade or business, and 
 who share the protit or loss (as the case may be) arising 
 therefrom. The common stock so contributed is di'noted 
 in money and is the capital of the company. The per- 
 sons A-ho contribute it or to whom it belongs are mem- 
 bers or shareholders. The proportion of capital to 
 which each member is entitled is his share. Shares are 
 always transferable; although the right to transfer 
 them is often more or less restricted. 
 
 A company which is incorporated, whether by 
 charter, special Act of Parliament, or registration, is In 
 a legal point of view distinct from the persons com- 
 posing it; and these persons are not personally respon- 
 sible for the company's debts or engagements, unless 
 expressly ma'^'.e so, and their property is affected only 
 to the extent of their interest in the company. This 
 limited responsibility is one of the chief differences 
 between an incorporated company and a partnership; 
 in the latter, as a rule, the partners are always person- 
 ally liable; in the former, it requires an express i)ro- 
 vision in the instrument of incorporation or in a govern- 
 ing statute to render the stockholders personally liable. 
 The company forms a new artificial person and is 
 recognized in its limited capacity by the public and by 
 the law of the land. It sues and is sued by a name of 
 its own, and its continuous existence is not affected by 
 changes amongst its members. 
 
li 
 
 2 
 
 SHAREilOLDEUS AND DIRECTORS MANUAL. 
 
 2. How Formed. 
 
 Practically the great majority of companies are 
 formed aH follows: A few persons called promoters form 
 a scheme by which they say money may be made, but 
 requiriuji: considerable funds for its realization. To 
 make their scheme known and to raise the funds re- 
 quired, they publish a prospectus, setting forth the 
 nature of the scheme and the amount of capital neces- 
 sary to carry it out, and inviting persons to become 
 subscribers. Sometimes the prospectus is issued before 
 the company has any legal existence; at other times the 
 promoters or their friends do what is necessary to 
 create the company as a legal body and issue the 
 prospect (IS after the company has been created. In 
 either case the prospectus is a very important document ; 
 for on the faith of it persons are intended to apply, and 
 do, in fact, apply for shares in the company to be 
 formed or already formed, as the case may be. 
 3. Inducements to the Formation of a Company. 
 
 The great induceniient to the formation of a com- 
 pany is the facility which it has for obtaining from the 
 public the necessary capital for carrying its objects iuto 
 effect. However large the capital required may be, 
 shareholders will be found, provided the company appears 
 to have a reasonable chance of success. The motive 
 which impels persons to invest is the desire to share in 
 the profits of a promising undertaking, coupled with the 
 knowledge that the investor's liability is limited. 
 
 Working capital for a company is also, in many 
 cases, obtained by the issue of debentures or debenture 
 stock. There is no market for the debentures or deben- 
 ture stock of an individual, or of a firm, but a com- 
 pany's debentures or debenture stock are well-known 
 securities, and if the company has a sound business, 
 can be placed without difficulty. 
 
 There are many other inducements to the formation 
 of companies: c. g., the rule that directors are limited 
 agents of the company; the advantages of corporate 
 existence as regards suing and being sued, holding pro- 
 perty, death and bankruptcy of members, sale of shares, 
 etc., etc. 
 
 i 
 
 I 
 
 k 
 
lies are 
 <:rs foi'Hi 
 Eide, but 
 iou. To 
 nil (Is fO- 
 n'tXx the 
 il neccs- 
 become 
 d before 
 iines the 
 isary to 
 asiie the 
 ted. In 
 leument ; 
 >l)ly, and 
 y to be 
 
 ^IPANY. 
 
 [ a eoni- 
 roin the 
 ets into 
 may be, 
 appears 
 motive 
 share in 
 ,vith the 
 I. . 
 Q many 
 benture 
 deben- 
 a corn- 
 known 
 iisiness, 
 
 rniation 
 limited 
 rporate 
 ng pro- 
 sliares, 
 
 CHAPTER I. 
 
 i 
 
 PROMOTION OF COMPANY. 
 
 1. Form of Prospectus. 
 
 2. Effect OF MisuEPREsETN'- 
 
 tation in. 
 
 3. Where Capital Varies 
 
 FROM Amount Stated 
 IN Prospectus. 
 
 4. Application for Shares. 
 
 5. May re Revoked re- 
 
 fore Allotment. 
 
 6. Allotment of Shares. 
 
 7. Letter of Allotment. 
 
 8. 
 
 9. 
 
 10. 
 
 11. 
 12. 
 13. 
 
 A<jkeement Complete 
 BY Allotment and 
 Notice. 
 
 SURSCRIRERS TO STOCK 
 
 Book Bound al- 
 though NO Stock 
 Allotted Them. 
 
 MaKx.ied Women as 
 Suhscrirers. 
 
 Infant as aSuhscrirer. 
 
 Preliminary Expen.ses. 
 
 Recovery of Deposit. 
 
 1. Form of Prospectus.^ 
 
 A common, thougli not an essential preliminary to 
 the promotion and formation of a company, is the issue 
 of a prospectus. This document is intendel to set forth 
 to the public such details of the proposv'd scheme as 
 will enable them to judge of the advisability, or other- 
 wise, of taking part in it In form it should "be short 
 and pointed. It should contain, as a heading, the name 
 and proi>osed capital of the company; then an account 
 of its advantages and prospects, and an idea of the plan 
 on which it is proposed to be worked. At the end is 
 usually appended a short form of application for shares. 
 The names of the directors always, in the interest of the 
 company, itself, form part of the prospectus and other 
 I>nblic announcements, in order to enable the public to 
 judge of the advisability of taking part in the scheme, 
 and these names can always be verified by the books 
 and records of the company. 
 
 2. Effect of Misrepresentation in. 
 
 The legal effect of such a circular has from time to 
 
 time been much discussed, especially as regards the 
 ^ See Form infra. 
 
SHAUEHOLDEUS AND DIRECTOKS MANUAL. 
 
 Hiibsoription of shares on the faith of it. Thus it has 
 been held that a mere 8i{j;ninK of the prospectus does not 
 make one liabU? as a shareholder, and the rule has been 
 broadly laid down that subscriptions induced by wilful 
 misrepresentations in the prospectus, or even by wilful 
 concealment of material facts, maj' be set aside as 
 obtained by fraud, provided the proceedings to cancel 
 such subscriptions are taken promptly upon discovery 
 of the fraud, and before winding-up proceedings hav 
 been commenced. 
 
 A prospectus must (1) be free from misrepresenta- 
 tions and (2) disclose all material facts. If it is impro- 
 perly framed, the company, and those who take part in 
 its preparation and issue, may be involved in litigation 
 and onerous liabilities. As to (1): The prospectus should 
 tell the truth, the whole truth, and nothing but the 
 truth. If the company is being incorporated under the 
 Ontario Act, the prospectus should be framed with due 
 regard to that Act (a), and the precautions there sug- 
 gested should be adopted. As to (2): What facts are 
 material to be disclosed, and how disclosure can best be 
 made without unduly depreciating the undertaking, re- 
 quires judgment; and familiarity witli the legal 
 decisions. If the prospectus is not properly framed, 
 shareholders who have been deceived can take proceed- 
 ings against the company to get rid of their shares and 
 recover their money, but not a day should be lost after 
 discovering the facts. Moreover, in certain cases, they 
 can bring actions for compensation against the 
 dii'ectors and otliers. No prudent man will take part 
 in the issue of a prospectus, or allow it to be issued in 
 his name, unless he is satisfied that the prospectus com- 
 plies with the la\', and that he will be able to defend 
 himself in the event of proceedings being taken against 
 him. 
 
 In the Temperance Colonization Company against 
 
 (a) Infra. 
 
PROMOTION OF COMPANY. 
 
 Fairfield (//): — The plaintiffs, a company formed for the 
 purpose of eolonizinj? land in the North-West Terri- 
 tories, represented to defendant by means of an advec- 
 tisement issued in a daily paper, that the Eominion 
 Government had apjreed to the selection by the company 
 of a " compact choice tract of land " in the said Terri- 
 tories, " comprising 2,000,000 acres, for ih«' purpose of 
 settlement, free from the use of intoxicating liiiuors." 
 The defendant, on the faith of these representations, 
 desiring to send his son to a place where he would be 
 precluded from the use of intoxicatin-g litiuors, entered 
 into two agreements with the company, agreeing in 
 each " to purchase and pay fo'' 320 acres of land, in the 
 order of choice from the odd numbered sections of our 
 lands as procured or to be procured from the Dominion," 
 and paid certain instalments thereon. It was proved 
 that the company never had, and could not obtain, the 
 choice compact tract stated, nor any special privileges 
 as to the exclusion of liquors: — Held, that these were 
 material misrepresentations, and the defcndan*^ having 
 been induced to enter into the agreements thereby, was 
 therefore entitled to have them rescinded, and to re- 
 cover back the money paid by him. 
 
 3. Where Capital Varies from Amount Stated in 
 
 Prospectus. 
 
 Where capital upon incorporation, varies from the 
 amount stated in prospectus, a subscriber is not liable. 
 In Stevens against The London' Steel Works (h), one D. 
 signed his name as subscriber for a certain number of 
 shares at the foot of a prospectus of a proposed com- 
 pany, in which it was stated that the capital was to be 
 175,000. Without D.'s know'^dge or acquiescence, +iie 
 company, as afterwards incorporated, had a capital of 
 ^150,000. Id accordance with the terms of the subscrip- 
 tion, and before the incorporation of the company, 1). 
 paid up half the amount of his shares. There was no 
 allotment of stock to D., no entry of his name in any 
 
 (a) 16 Ontario Reports 544, C. P. D. 
 
 (6) 15 Ontario Reports 75, p. 248. 
 
 
6 
 
 SHAREHOLDERS AN'^ DIRECTORS MANUAL. 
 
 stock-book, and no acting on his part as shareholder. 
 The company being in process of liquidation, it was 
 claimed that D. was a contributory: — Held, that the 
 change made in the capital of the company was a 
 material one, and there being no acquiescence or laches 
 on D.'s part; he was not liable as a contributory. 
 
 4. Application for Shares. 
 
 Agreements to take shares in a company about to 
 be formed (or if technicallj' formed already, having 
 part of its capital still unsubscribed), are usually enter- 
 ed into by an application for shares on the one hand 
 and bj' an acceptance of such application on the other. 
 
 In practice, the application is generally a printed 
 form of request, addressed to the secretary or directors 
 of the company, or to persons named by the projectors, 
 and expressing an agreement on the part of the appli- 
 cant to take a certain number of shares in the company, 
 or such smaller number as mav be allotted to him. The 
 form is signed by the applicant, and he generally pays 
 to the bankers of the company or projected company a 
 small deposit on each share applied for, and obtains 
 from the bankers a receipt for the payment. The pay- 
 ment is usually made before or at the time when the 
 application is sent in. 
 
 5. Application for Shares may be Revoked before 
 
 Allotment. 
 The application for shares, in whatever form it is 
 made, and whether accompanied by the payment of a 
 deposit or not, is only an offer to take the shares applied 
 for, and may, like any other offer, be retracted before it 
 has been accepted. Nor is this right to revoke excluded 
 by the insertion in the application of words to the 
 effect that the applicant agrees to accept the shares 
 applied for, or any less number that may be allotted to 
 him, and consents to be registered in respect of them; 
 for such words themselves only amount to an offer and 
 do not constitute an agreement until the offer they ex- 
 press has been accepted. But a revocation received 
 after notice of acceptance has been posted is too late. 
 
PROMOTION OF COMPANY. 7 
 
 even though the letter of revocation is written and 
 posted before the letter of application is received. 
 
 6. Allotment of Shares. 
 
 The allotment of shares will be effected by a 
 resolution or resolutions of the directors as follows: 
 
 " That Bhare3 in the capital of the company be allotted aa 
 
 follows : 
 
 AlJiOTTEE. 
 
 numbeb of 
 Shares. 
 
 Denoting numbers of 
 shares, both inclusive. 
 
 Fr»OM 
 
 To 
 
 A. B. 
 
 C. D. 
 etc. 
 
 Ten 
 
 One Hundred 
 
 etc. 
 
 11 
 
 etc. 
 
 10 
 110 
 etc. 
 
 " And that the secretary do give notice of allotment to the above 
 iiamed persona respectively." 
 
 7. Letter of Allotment. 
 
 If the application for shares is acceded to, a letter 
 of allotment is usually sent to the applicant, informing 
 him that so many shares have been (or will be) allotted 
 to him, and that a certain sum, by way of deposit on 
 each share, must be paid to the bankers of the company'. 
 
 8. Agreement Complete by Allotment and Notice. 
 
 In order that the application and acceptance may 
 constitute a binding agreement, the acceptance must be 
 by persons who can bind the company, and must be 
 notified to the applicant. 
 
 Unless under special circumstances, notice of allot- 
 ment must be given to the applicant or his agent in 
 order to bind the allottee. Notice by post is sufficient, 
 even if the notice should fail to reach the allottee or his 
 agent, either owing to the default of the allottee or to 
 some casualty in the i>ost office establishment. It is 
 not, however, necessary to pi-ove express formal notice 
 of the allotment, it is sufficient to show that the allottee 
 in fact knew of it. 
 
 Persons named in the charter of a company as 
 
8 
 
 SHAHEHOLDEKS AND DIRECTORS' MANUAL. 
 
 shareholders are liable as such for calls which may be 
 afterwards made upon the stock stated in the charter 
 to be held by them, and no further act of the directors 
 in allotting such stock or giving them notice of allot- 
 ment is necessary (a). 
 
 9. Subscribers to a Company's Stock Book are Bound 
 
 ALTHOUGH NO StOCK IS ALLOTTED TO ThEM. 
 
 In the Queen City Refining Company of Toronto, 
 (Limited), in the winding up proceedings (h), the Master 
 placed the subscribers to the stock-book upon the list 
 of contributories. The contributories appealed upon 
 the ground that although they were subscribers for 
 stock still no stock had been allotted to them by the 
 directors: — Held, that the Master was right, that the 
 contract signed was an unqualified taking of shares; 
 and that the Act R. S. O. (1877), c. 150, contemplates two 
 modes of acquiring stock, by su^ •'iption and by 
 allotment. 
 
 10. Married Women as Subscribers. 
 
 At common law a married woman could not sub- 
 scribe for stock, and any person subscribing in her name 
 was himself personally liable on the subscription. But 
 now, in Canada, England, and generally in the United 
 States, by statute, a married woman may bind her 
 separate estate by such a subscription; and when it 
 appears that the contract was with the wife, having 
 been made directly and solely with her, the husband is 
 not bound. The recourse of the company or the cor- 
 porate creditors is, in such a case, to her separate estate 
 only. 
 
 In England a husband has been held liable oni his 
 wife's subscription to the capital stock of an incor- 
 porated company, the subscription having been made 
 before marriage, but that was a decision before the 
 recent statutory changes. 
 
 (a) In re London Speaker Printing Co. , 16 Appeal Reports 508, 
 followed. In re Haggert Bros. Manufacturing Co., Peaker and 
 Runions Case, 19 Appeal Reports, 582. Also Weddell's Case, 20 
 Ontario Reports 107. 
 
 (b) 10 Ontario Reports 264. 
 
 !|: 
 
 I 
 
PROMOTION OF COMPANY. 
 
 9 
 
 11. Inb^ant as a Subscriber. 
 
 A subscription for stock by an inf.ant is a contract 
 to be governed by the general rules of law applicable 
 to the contracts of infants generally. In general, the 
 subscription of an infant is voidable rather than void. 
 He may repudiate it at majority, and thereby entirely 
 escape liability; or he may ratify it, and thereby become 
 as fully bound as though the subscription had been 
 made after majority. Accordingly it is: a settled rule 
 that, where one subscribes for shares in the name of an 
 infant, he is liable personall}* to the company or the 
 corporate creditors on the subscription. 
 
 An infant's subscription must be repudiated within 
 a reasonable time after coming of age or he will be held 
 to have ratified it. 
 
 The Ontario Companies Act requires the applicants 
 for incorporation to be of the full age of twenty-one 
 years. 
 
 12. Preliminary Expenses. 
 
 The expenses necessarily incurred in the promotion 
 of the company-, are usually paid by the company on its 
 formation. But supposing that circumstances are ad- 
 verse; the company fails in arriving at incorporation; 
 considerable debts have been incurred in making sur- 
 vevs, printing p-ospectus, and otherwise getting up 
 company, and the question arises, by whom are such 
 expenses to be borne? Formerly it was supposed that 
 all persons interested in the proposed company were 
 partners and, therefore, according to the usual law of 
 partnership, liable for the debts contracted by the 
 managing committee; but it is now well settled that in 
 the case of provisional committees, or the projectors of 
 a company, there is no partnership between them, no 
 common power of binding each other merely by such a 
 relation; each binds himself by his own' act only, or by 
 acts which he authorizes. But where the subscriber had 
 signed a deed authorizing the promoters to defray the 
 expenses incidental to the undertaking out of the de- 
 
p 
 
 10 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 posits paid for shares, it was decided that, although the 
 scheme proved abortive, the deposits were not return- 
 able. And the result of a number of eases of a similar 
 character is, that there must be something to show an 
 undertaking that deposits on shares were to be liable for 
 expenses, in order to hold them when the scheme is 
 abandoned. 
 
 Where the formation of a company is completed, 
 the expenses may be paid by the company in instalments 
 spread over a number of years and dividends be paid in 
 the meanwhile. 
 
 13. Recovery of Deposit. 
 
 The question of liability for the preliminary ex- 
 penses of the company is akin to the general one of the 
 right of the shareholders to get back their deposits, 
 where the formation is not completed and the scheme 
 falls through, and the general rule is, deducible from a 
 number of cases, that in the absence of any contract or 
 agreement to the contrary the shareholders are, on the 
 abandonment of the undertaking, released from lia- 
 bility, and have a right to '^ecover the amounts paid by 
 them as deposits on shares. And this even when the 
 money has been expended by the managing committee, 
 who must return to each subscriber the amount of his 
 deposit, without any deduction. 
 
 But difficulties in this respect are now usually 
 avoided by a statement in the form of a letter of appli- 
 cation authorizing the deposit to be applied to the pay- 
 ment of the preliminary expenses of the company. 
 
 A short form given by Thring (a) is as follows: 
 Gentlemen, — Having paid to your banker the sum of 
 $ , I request you to allot me shares in the com- 
 pany, and I agree to accept the same or any less num- 
 ber that 3'ou may allot me (subject to the articles of 
 association), and I authorize you to apply the deposit 
 of $ in the payment of the preliminary expenses of 
 the company. 
 
 (a) Thring's Joint Stock Companies. 
 
 II 
 
CHAPTER II. 
 
 FOEMATION AND INCORPORATION OF COMPANIES. 
 
 1. Incouporation by Let- 
 
 ters PA'J'ENT. 
 
 2. Name of Company. 
 
 3. Use of the Word 
 
 " Limited." 
 
 4. Objects. 
 
 0. Head Office or Chief 
 Place of Business. 
 
 6. Residence of Company. 
 
 7. Amount of Capital, 
 
 Nominal and Paid- 
 up. 
 
 8. May be Reduced or 
 
 Increased. 
 
 9. Division into Shares. 
 
 10. Amount OF Each Share. 
 
 11. Formerly Only Peti- 
 
 tionersIncorporated 
 BY Letters Patent. 
 
 12. Commencement of Busi- 
 
 ness. 
 
 1. iNCORPOr, -TION BY LETTERS PaTENT. 
 
 The legislatures of this country, with the exception 
 of that of British Columbia, after a trial of the registra- 
 tion system, which exists in England and the United 
 States, as well as in France, and other European 
 countries, have returned to the more elaborate and 
 formal method of issuing letters patent under the great 
 seal. The object of this is, perhaps, to avoid a too great 
 facility of incorporation, which has been found in all 
 countries to have its drawbacks as well as its advan- 
 tages. The effect of this difference in method is to 
 bring any proposed Joint Stock Company, for which 
 incorporation is sought, more directly under the 
 scrutiny of the auth'^rities, and to give to the Governor 
 or Lieutenant-Governor in Council an opportunity of 
 refusing incorporation, should it seem to him expedient 
 so to do. 
 
 2. Name of Company. 
 
 Every incorporated company or trading corporation 
 must have a name hy which it may sue and be sued, 
 enter into contracts, make and receive grants and per- 
 form all legal acts. Such a name is the " very being of 
 
'ir 
 
 P 
 
 -tm-^m^mmmi 
 
 wi!iw^-<iSi*itt 
 
 12 
 
 SHAREHOLDERS' AND DIRECTORS MANUAL. 
 
 its constitution, the Itnot of its combination." No 
 alteration can be made in its name by the corporate 
 body itself; if this is desired, application must bt made 
 to the authority from which its charter is derivec. The 
 name should be as short as possible consistent with ex- 
 pressing the nature of the company. 
 
 The amount of litigation which has in times past 
 arisen from a confusion of names, has led to a provision, 
 in all the more recent Acts, putting the promoters on 
 their guard against selecting a name liable to be con- 
 founded with one already in use. At the same time it 
 is said that " A company cannot acquire an exclusive 
 right to use in its title of incorporation, a general term, 
 descriptive merely of the locality with which the busi- 
 ness carried on by the company is connected." Thus, a 
 company could not claim the exclusive use of the word 
 " colonial," even though it be prejudiced by another 
 using it. 
 
 The use of the word " Royal " is prohibited by the 
 English Statutes without a special license from the 
 Home OflSce. 
 
 3. Use of the Word "Limited." 
 
 The Ontario Act directs that every company shall 
 keep painted, or aflfixed, its name with the unabbreviated 
 word *' Limited " as the last word thereof on the out- 
 side of every office, or place in which the business of the 
 company is carried on, in a conspicuous position, in 
 letters easily legible; and shall have its name with the 
 said unabbreviated word in legible characters on' its 
 seal, and shall have its name with the said unabbrevi- 
 ated word mentioned in legible characters in all notices, 
 advertisements and other official publications of the 
 company, and hv all bills of exchange, promissory notes, 
 indorsements, cheques and orders for money or goods 
 purporting to be signed by or on behalf of such com- 
 pany, and in all bills of parcels, invoices and receipts of 
 the company. The word unabbreviated does not appear 
 in the Dominion Act as qualifying Limited, but other- 
 wise the sections are identical. 
 
INCOllPORATION OF COMI'ANY. 
 
 18 
 
 4. The Ohjects. 
 
 In setting out the objects of the company for the 
 purposes of incorporation too much care cannot be used, 
 as a charter will be granted for those purposes, and 
 those only, set forth in the notice or petition, and no 
 chanj?e in or extension of such objects can be made by 
 tlie members of the company, however desirous they 
 may be of doing so, except subject to the same formali- 
 ties as those by which the charter was obtained. A cor- 
 poration is a creature of the h^ w, formed and organized 
 for the particular objects si)ecified in its instrument of 
 incorporation, and if it goes beyond those objects all its 
 acts done in excess of them are void, and its members 
 may be held personally liable. 
 
 )n, in 
 
 Ith the 
 
 )n' Its 
 
 fbrevi- 
 
 )tices, 
 
 the 
 
 [notes, 
 
 [goods 
 
 com- 
 
 )ts of 
 
 [ppear 
 
 )ther- 
 
 5. Head Office or Chief Place of Business. 
 
 The various Acts require that the head office or 
 chief place of business of the proposed company should 
 be stated. There are several reasons for this. A know- 
 ledge of the proposed chief place of business of the com- 
 pany is to some extent necessary, in order to decide 
 upon the expediency of granting the charter, and, if 
 granted, governs the question of jurisdiction and service 
 of legal process. It also notifies the general public as 
 to the headquarters or home of the company. 
 
 Where the Act of Incorporation provides that the 
 head office may be changed from one place to another, 
 the directors acting under a resolution of the share- 
 holders to that eff-xt can effectually make such 
 change (a). 
 
 6. Residence of Company. 
 
 A company resides in the place where its principal 
 
 place of business is situate, and thougli consisting of 
 
 foreign members, is subject to the law of the country 
 
 by which it is created. It may possess property in 
 
 foreign countries, but it has no legal existence in such 
 
 («) Union Fire Insurance Company af»ain8t O'Gara, 4 Ontario 
 Reports 359. 
 
CT 
 
 14 
 
 shareholders' and directors' manual. 
 
 Ijlll 
 
 countries, unless it is recognized by the proper authori- 
 ties or b}' comity; and when so recognized, it holds its 
 property under certain qualifications, in subjection to 
 the law of the country where the property lies, and not 
 to the law of the country where the company resides. 
 
 7. Amount of Capital, Nominal and Paid-up. 
 
 By knowing the amount of its capital the public 
 are enabled to determine what credit the company is 
 entitled to and the extent to which it may be safe to go 
 in dealing with it. The amount of its nominal 
 capital must not, however, be confounded with its 
 real capital or mistaken for its basis of credit. It 
 only forms such basis when it is all subscribed 
 by responsible persons or actually' paid in, and only 
 then at the beginning tf its career. It is not 
 usual for the whole vi the sum fixed upon as the 
 capital of a company to be paid up at once by the 
 subscribers or shareholders. The nominal capital, and 
 the number and amount of the shares into which it is to 
 be divided, having been determined upon, and such 
 shares having been subscribed for, an instalment only of 
 the money they represent is usually paid; and the rest of 
 that money is left to be called and paid as occasion may 
 require. Hence the distinction between paid-up and 
 nominal capital. The fonner is the money which the 
 company has or has had; the latter, except when the 
 shares are issued at a discount, consists of the sum to 
 which it is entitled by virtue of the contract entered 
 into by its subscribers and shareholders, including the 
 nominal value of any unissued shares. After a com- 
 pany has been in existence for a length of time a know- 
 ledge of the actual condition of its affairs is the only 
 safe guide to its trustworthiness. Losses may have 
 occurred in the course of its operations by which its 
 capital has become seriously impaired, and as the mem- 
 bers cannot be looked to, where the capital is all paid 
 up, the actual means in the hands of the company are 
 all that the public can rely upon. " If the company,"' 
 
INCORPORATION OF COMPANY. 
 
 15 
 
 authori- 
 holds it8 
 iction to 
 , and not 
 isides. 
 
 D-UP. 
 
 le public 
 npany is 
 afe to go 
 nominal 
 with its 
 redit. It 
 ubscuibed 
 and only 
 t is not 
 n as the 
 je by the 
 pital, and 
 ch it is to 
 and such 
 at only of 
 le rest of 
 ision may 
 l-u'P and 
 vhich the 
 when the 
 sum to 
 entered 
 iding the 
 r a com- 
 a know- 
 the only 
 nay have 
 which its 
 the mem- 
 all paid 
 pany are 
 ompany," 
 
 says Thring, " intend to conduct a business dependent 
 in a great degree on credit, the n'oniinal capital should 
 be considerably greater than the immediate necessities 
 of the company recjuire, as the balanc(.» remaining un- 
 called, will, if the shares are in the hands of substantial 
 holders, be a sufficient security for the creditors. On 
 the other hand, if the object of the company be to pur- 
 chase a park, * * to make f^as works, or to do any 
 other work in which the current expenses will be snuill 
 as compared with the cost of acquinng the property, the 
 capital should be of adequate amount to make the pro- 
 posed purchases, but need not leave a large reserve, as 
 there will be no difficult^' in raising money on the 
 security of the property." And by another authority, 
 it is said that '' the amount of the capital stock of a 
 corporation is not ^^er se a limitation of the amount of 
 property, real or personal, which it may own, or, by im- 
 plication, of the amount of its liabilities or outstanding 
 obligations, but is rather regarded as the sum upon 
 which calls may be made uj»on subscribers, and 
 dividends are to be paid to stockholders. Accordingly, 
 where the capital stock of a building corporation was 
 one million dollars, it was held, that this did not 
 restrict the company from expending in their buildings 
 two million dollars, and from incurring debts on bonds 
 and mortgages for the excess of cost beyond their 
 capital — their power to take and hold real estate, being 
 in other respects unlimited by the terms of their 
 charter" (a). 
 
 8. May Be Reduced or Increased. 
 
 The company's nominal capital may be reduced or 
 
 increased from time to time as circumstances appear to 
 
 warrant. The steps necessary for these purposes, which 
 
 are set out in the Acts, must be strictly ccwnplied with. 
 
 9. Division Into Shares. 
 
 The division of the capital into shares is, of course, 
 one of the most striking features of a company organiza- 
 tion as distinguished from am ordinary partnership. 
 (a) Angell and Ames, Corporations, sec. 151. 
 
il 
 
 i i 
 
 16 
 
 SHAUEHOLDEKS AND DIKECTORS MANUAL 
 
 It is this which enables all the world to contribute 
 to the capital fund; by which its menibershii) may un- 
 dergo daily alteration without any derangement of its 
 cori)orate functions, and which gives generally that 
 elasticity to a company which tonus one of its chief 
 advantages. 
 
 10. Amount of Each Share. 
 
 " The amount of each share," says one writer, " is a 
 matter for much consideration, and will differ accord- 
 ing to the nature of the company." ** If the objects of 
 the company be popular," says Thring, *' it may be advis- 
 able to make the shares of small amount, with the view 
 of attracting numerous applicants." No limit is now 
 placed as to the amount of each share, either by the 
 Canadian or Imperial Statutes, though formerly, under 
 the latter, the shares could not be less than £10. 
 
 11. Formerly Only Petitioners Were* Incorporated 
 BY the Letters Patent. 
 
 Formerly the petition had to be signed by all the 
 subscribers for stock prior to the incorporation, as the 
 shareholders at the date of the issue of the letters 
 I)atent were those persons only who were named therein 
 and to whom stock was allotted thereby; and it was 
 those persons and others who might afterwards 
 become shareliolders who constituted the company. 
 This was decided in' Tilsonburg Agricultural Manu- 
 facturing Company against Goodrich, tried in the 
 Court of Queen's Bench, Toronto, in 1885 ya). In that 
 case the defendant with others agreed to apply for a 
 I)atent for a company for manufacturing purposes, under 
 R. S. O. (1877), c. 150, and signed a stock list 
 subscribing for certain shares and agreeing to pay 
 therefor as provided by the Act and the by-laws of the 
 company. Subsequently a petition purporting to be by 
 thirteen of the subscribers, but omitting the defendant's 
 name, w\as presented to the Lieutenant-Governor of 
 Ontario for a patent incorporating the petitioners and 
 (a) 8 Ontario Reports 565, Q. B. D. 
 
lX('()RFORATI(>\ OF COMPANY. 
 
 17 
 
 tribute 
 n\y uii- 
 t of its 
 ly that 
 8 chief 
 
 r, " is a 
 accord- 
 jects of 
 e advis- 
 he view 
 is now 
 • by the 
 r, under 
 
 PORATED 
 
 all the 
 
 as the 
 
 letters 
 
 therein 
 
 it was 
 
 erwards 
 
 ompany. 
 
 Manu- 
 
 iu the 
 
 In that 
 
 y for a 
 
 s, under 
 
 )ck list 
 
 to pay 
 8 of the 
 o be by 
 endant's 
 irnor of 
 ers and 
 
 " surh others as niijjht beconio shnreliolders in the com- 
 pany thereby created a body corporate,'' etc. The 
 stock list, however, subscribed by the defendant api)ear- 
 cd to have lieen filed in the ofllce of the Provincial 
 Secretary. The jtetitioners were accordinjjly inc()r])0- 
 I'ated, "and each an<l all such other person or persons as 
 now is, or are, ov shall at any tini(» hereafter become a 
 shareholder or shareholders in the said company under 
 the provisions of the said Act," etc. The defendant did 
 not subsequently to the incorporation subscribe for 
 stock, but on the contrary refnidiated his former sub- 
 scription: — Held, that the defendant was not a stock- 
 holder, and was, therefore, not liable for calls on the 
 shares which he purported to have subscribed for. 
 
 Also in Magopr Textile and Print Co. against 
 Price {(i), and in re London Speaker Printing Co. — 
 Pearce's Case (h). 
 
 This diflficulty has been dealt with by sei 9 of the 
 Ontario Companies' Act, which provides that the 
 Lieutenant-Ciovernor in Council may, by letters i)atent, 
 grant a charter to any number of persons, nov less than 
 five, who shall petition therefor, creating and con- 
 stituting such persons and any others who have become 
 subscribers to the memorandum of agreement, a body 
 corporate and politic for any of the purposes or objects 
 to which the legislative authority of the Legislature of 
 Ontiirio extends, except the construction and working 
 of railways, the business of insurance and the business 
 of loan and other companies under The Loan Corpora- 
 tions Act, 
 
 12. Commencement of Business, 
 
 A charter having been obtained and other prelimi- 
 nary matters settled, it \h competent to the company to 
 commence business forthwith. Under the Dominion 
 Act half of the total amount of the capital stock must 
 
 (a) 14 Supreme Court Reports 664. 
 
 (b) 16 Appeal Reports 508. 
 
 W.8.D.M,— 2 
 
!•( 
 
 
 18 
 
 shareholders' and directors' manual. 
 
 be bona fide subscribed before api»l,viiij( for a charter, 
 and it is not, as a rule, considered necessary to stipulate 
 beyond this, that any particular proportion of the stocli 
 shall be taken up before entering upon the objects of 
 the company, the persons who have subscribed the first 
 half being themselves most interested and best capable 
 of judging of the propriety of the step. lUit under the 
 English system, which makes no such provision, it is not 
 unusual for the shareholders to stipulate, in order to 
 protect themselves, that the business of the company 
 shall not be entered upon until a certain number of 
 shares have been subscribed. It was, indeed, at one 
 time discussed whether or not a company could com- 
 mence business until the whole of the shares had been 
 subscribed, but it has been settled that apart from ex- 
 press statutory provision there is no restriction of this 
 kind. 
 
 It is no defence to an action for calls to say that all 
 the shares have not been subscribed. Nor will a Court 
 in such case interfere to prevent business from being 
 commenced. And under che Dominion Act the inten- 
 tion doubtless is, that the company may commence their 
 transactions and call upon the shareholders to contri 
 bute, as soon after the issue of the letters patent as the 
 directors may deem expedient, whether or not a single 
 share has been subscribed for beyond the number neces- 
 sary to obtain the charter. And if no business is 
 entered upon within thvee years under the Dominion 
 Act, or within two years under the Ontario Act, the 
 charter will be held forfeited bv nonuser. 
 
 li' 
 I! 
 
 M^ 
 
 I. 
 ."it 
 
■harter, 
 il)ulate 
 e stock 
 ects of 
 he first 
 capable 
 dcr the 
 it is not 
 irder to 
 ompauy 
 luber of 
 , at one 
 Id coiu- 
 ad been 
 from ex- 
 I of this 
 
 that all 
 a Court 
 m being 
 le inten- 
 i€e their 
 contri- 
 it as the 
 single 
 er neces- 
 iuess is 
 )ominion 
 Act, the 
 
 CHAPTER 111. 
 
 1. 
 
 2. 
 3. 
 
 4. 
 
 5. 
 6. 
 
 8. 
 9. 
 
 DIRECTORS. 
 
 Intuoductouv. 
 
 Acceptance of Office 
 HY Directors. 
 
 Power to Fill Vacan- 
 cies. 
 
 Power to Remove Di- 
 rectors. 
 
 ProvisionalDi rectors. 
 
 Number of Board. 
 
 Preference Share- 
 holders TO Select 
 Directors. 
 
 Remuneration of. 
 
 Qualification of. 
 
 10. DlSt^UALIFICATION OF. 
 
 11. Acts of de facto Direc- 
 
 tors Valid. 
 
 12. Retirement of. 
 
 13. Election of. 
 
 14. Term of Office of. 
 
 15. Powers (>f. 
 
 16. Status of. 
 
 17. Right of, to see Ac- 
 
 counts, ETC. 
 
 18. Contracts between Di- 
 
 rectors andCompany. 
 
 19. General Remarks Con- 
 
 cerning Directors. 
 
 1. Introductory. 
 
 One of the peculiarities of companies, as distin- 
 guished from partnerships, is that the management of a 
 company's business is entrusted to a few chosen 
 individuals, and that the shareholders are deprived of 
 that right of personal interference which is enjoyed by 
 members of ordinary firms. The members of companies 
 form two bodies, whose interests are or should be the 
 same, but whose powers and functions are different; 
 the one body consists of the directors, in whom the 
 general powers of management are vested; and the 
 other body consists of the shareholders, to whom the 
 directors are accountable, and by whom they are gener- 
 ally appointed. Each of these bodies has its own sphere 
 of action, and its own rights and duties. 
 
 It is to be observed that the directors of a company 
 are all those persons who are constituted directors by 
 a company's act, chj.rter, or deed of settlement, and not 
 onlv such of them as choose to act. 
 
20 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 i! 
 
 lii 
 
 - ■! 
 
 2. Acceptance of Office by Directors. 
 
 An acceptance of the oflftce by one ;vho is elected 
 director is necessary to constitute him a director. Some 
 direct and positive act of acceptance is necessary. 
 
 Whether a person once a director has or has not 
 ceased to be so depends [except in the case of his death] 
 upon the regulations of the company. A director who 
 becomes bankrupt, lunatic, etc., or ceases to attend to 
 his duties, does not thereby necessarily vacate his oftice. 
 
 S, Power to Fill Vacancies. 
 
 The power to fill up casual vacancies is frequently 
 given to the remaining directors; in such a case they 
 can fill up a vacancy although a general meeting of 
 shareholders has been held since the vacancy occurred; 
 but if the number of continuing directors is less than 
 the minimum number requisite for the transaction of 
 any business, they can do no business, and therefore 
 they cannot fill up the vacancy. The by-laws of the 
 company may, however, allow the continuing directors, 
 however few, to fill up a vacancy, although not to 
 transact any other business until the vacancy is 
 filled up. 
 
 4. Power to Remove Directors. 
 
 Power to remove directors is often expressly con- 
 ferred on the shareholders. It has recently been de- 
 cided («) that a Joint Stock Company, whose directors 
 are appointed for a definite period, has no inherent 
 power to remove them before the expiration of that 
 period. If, therefore, a director is appointed for a de- 
 finite period, he cannot be removed before that period 
 has expired unless there is some special provision to 
 that effect. 
 
 The shareholders of a company cannot usually 
 exercise any control over the management of its affairs, 
 except at meetings duly convened ; for the directors of a 
 
 (a) Imperial Hydropathic Hotel Co. v. Hamison, 23 Chaucery 
 Div. 1. 
 
 
 ti 
 
DIRECTORS. 
 
 21 
 
 company are tbe servants, not of the individual share- 
 holders, but of the company; and where the manage- 
 ment of the directors is complained of, an aggrieved 
 shareholder should seek redress through the company, 
 and induce it to call the directors to an account. 
 
 Where the shareholders confirmed a by-law made 
 by the directors tixing their term of office at one year, 
 the shareholders were bound by it, and could not them- 
 selves pass another one to alter it; they must wait un- 
 til the next annual general meeting of the company and 
 put in a new set of directors vho would pass a new 
 by-law ((/). 
 
 5. Provisional Directors. 
 
 Until the first general meeting of the company, the 
 persons named in the letters patent or charter act as 
 provisional directors, whose business it is to manage 
 the affairs of the comi)any, and to call a geu'eral meeting 
 of its members, for the election of directors and the 
 further organization of the company as soon as conveni- 
 ently can be, with due regard to the delays and other 
 formalities precedent to such meeting. The Ontario Act 
 directs that such first meeting must be held within two 
 months of the date of tne letters patent. 
 
 At this tirst general meeting, the company will pro- 
 ceed with the organization of the company, and the 
 enactment of by-laws for its regulation and government. 
 
 6. Number of Board, 
 
 The uumbet' of directors required varies in the 
 different Provinces, but is generally lixed by the charter, 
 and certain formalities are prescribed for eitl.er the 
 increase or decrease of the number. A small board of 
 directors, is almost universally recommended in pre- 
 ference to a numerous one. " Five," says Cox [b), " is 
 ample for all purposes. The mistake of having large 
 boards for the sake of names — for there can be no other 
 
 (d) Stephenson v. Yokes, 27 Ontario Reports 091. 
 (b) Cox Joint Stock Companies, p. 56. 
 
 1 i 
 
22 
 
 SHAUEHOLDEUS' AND DIRECTORS' MANUAL. 
 
 !i| 
 
 ! ' 
 
 use in them — is the true reason why Joint Htock Com- 
 panies are so rarely enabled to compete successfully 
 with individuals. They want unity of purpose and 
 promptitude in action," etc. And another reason point- 
 ed out by the same writer arises from the question of 
 remuneration. " The directors," he says " are entitled 
 to liberal remuneration for the time and thoujjht they 
 devote to the affairs of the company. But the directors' 
 fees are seldom proportioned to the number of directors. 
 Whether the board be large or small, it is usual to vote 
 the same fee," etc. And other writers agree in the 
 advisability of small boards. " It is better to appoint," 
 says Healy («), ^' a small number of good men to manage 
 the company's business, and by substantial remunera- 
 tion make it worth their while to devote their best 
 energies to the discharge of their duties." 
 
 7. Preference Shareholders to Select Directors. 
 
 Under the Ontario Companies' Act the by-law 
 creating preference shares may provide that the holders 
 of shares of such preference stock shall have the right 
 to select a certain stated proportion of the board of 
 directors, or may give them such other control over the 
 affairs of the company as may be considered expedient. 
 
 8. Remuneration of. 
 
 Directors, in the absence of agreement or by-law, 
 cannot, from the nature of their position alone, lay 
 claim to any remuneration, however arduous may have 
 been their duties. They occupy the position, not of ser- 
 vants, but of managers and trustees. Directors have 
 no power to vote themselves fees or salaries for their 
 services beyond what the regulations of the company 
 may provide. 
 
 In the United States it is said that directors are not 
 usually compensated for their services as such. And in 
 a number of leading cases it has been held that the law 
 does not imply a promise on the part of corporations to 
 
 (a) Chadwyck-Healey Joint Stock Companies, p. 131. 
 
I 
 
 DIRECTORS. 
 
 m 
 
 pay their directors for services as such. There must be 
 a by-law or resolution of the board to compensate them 
 for their services before they can recover. But where 
 a director renders services as secretary under a resolu- 
 tion of appointment, which does not specify his remu- 
 neration, he may recover the reasonable value of such 
 services, and also of services rendered to the company 
 at the reciuest of the president and directors, as land 
 commissioner and as attorney. 
 
 In Fellows against the Albert Mining Company in 
 New Brunswick, the directors of a company passed a 
 resolution allowing their president a salary of twelve 
 hundred dollars for the, year current, and ordered that 
 a certificate of indebtedness under the corporate seal 
 should be issued to him in said sum, upon which the 
 president caused the corporate seal to be attached to 
 the certificate. There was no resolution of the stock- 
 holders voting the president remuneration for his 
 services, nor was there any provision, either in the Act 
 of Incorporation or the by-laws of the co^.pany, for such 
 remuneration. 
 
 Held, on an action brought on this certificate, that 
 the president was not by law entitled to receive pay for 
 his services, that the board of directors had no right to 
 pass the resolution referred to, that the act of afiixing 
 the corporate seal to the certificate was of no legal force, 
 and it was open to the company to resist payment in a 
 court of law (a). 
 
 And in Waddell against the Ontario Canning Co. 
 et ah, an action tried at Hamilton in 1889, where, in a 
 company consisting of seven shareholders, the plaintiffs, 
 four of the shareholders holding twenty-five per cent, of 
 the stock, claimed that there had been mismanagement 
 of the company's funds in the payment out of large 
 sums to the president and secretary, for salaries ur 
 services without any legal authority therefor, and in 
 the failure to declare any dividends though the company 
 
 (o) Steven's Digest, 340. 
 
24 
 
 .SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 I 
 
 had made large profits, and that no satisfactory investi- 
 gation or statement of the company's affairs could be 
 obtained though frequently applied for, and that it was 
 impossible to ascertain the company's true financial 
 standing. Under these circumstances an investigation 
 of the company's affairs was directed. At a meeting of 
 four of the directors, constituting the majority, held 
 after proceedings taken bj* the minority to disallow the 
 illegal payments made to the president and secretary, 
 and without proper notice to the minority- of such meet- 
 ing or its object, a resolution was passed ratifying the 
 payments made to the secretary; and at an adjourned 
 meeting, of which also the minority received no notice, 
 by-laws were passed ratifying the payments made to the 
 president and secretary: Held that the resolution and 
 by-laws were invalid, and could not be confirmed by the 
 shareholders, and an injunction was granted restraining 
 the company from acting thereunder, or from holding a 
 meeting of shareholders to ratify and confirm same («). 
 
 ' Where an Act of Incorporation! provides that no by- 
 law for the payment of the president or any director, 
 shall be valid or acted upon until the same has been 
 confirmed at a general meeting of the shareholders, this 
 applies only to payment for the services of a director 
 as a director, and for the services of the president as 
 presiding ojficer of the board (h). 
 
 That the remuneration of the directors is contem- 
 plated is clear, as the Acts of the various legislatures 
 make the remuneration of the directors one of the 
 matters for which the directors themselves may provide, 
 subject to confirnmtion by the shareholders at a general 
 meeting, — until which time, no by-law providing for 
 the '* payment of the president or any director shall be 
 valid or acted upon." 
 
 lender these circumstances, it is usual and expedient 
 to settle these matters at the first general meeting in 
 
 («) 18 Ontario Reports 41. 
 
 (b) Ontario Express and Transportation Co., The Directors' Case, 
 25 Ontario Reports 687. 
 
 ' 
 
DIRECTORS. 
 
 25 
 
 order to avoid difficu'ity thereafter. And in re London 
 Granite Co. («), it wad held, that there is no presumption 
 that their fees are to be paid out of the profits oulv, 
 and that where r.o profits were made they could re- 
 munerate themselves out of the capital. But though 
 directors are not entitled to recover remuneration' where 
 it has not bec^n provided for, they are entitled to 
 indemnity for losses and expenses incurred in discharge 
 of their duties. And in- Lambert ajjainst Northern 
 Railway of Buenos A: 3s Co. (ft), it was held that a 
 promise by directors to give their services gratuitously 
 did not ivrevent them from recovering the salaries 
 allotted to them under the previous contract with the 
 company, as defined by the Articles of Association. 
 
 9. Qualification of. 
 
 The rule is that a person to act as director in' a joint 
 stock company, shall be the bova fide owner of a certain 
 number of shares, as a guarantee of his interest in its 
 affairs. 
 
 But where a person accepts the office of director, 
 and has shares allotted to him in order to his qualifica- 
 tion, which he accepts, he cannot afterwards repudiate 
 his liability thereon. Questions like this have arisen 
 from time to time in different forms, but principally as 
 to the liability of the person as a contributory on shares 
 allotted to him for the express purpose of (lualification. 
 The rule deducible from all the cases appears to be, that 
 if a person is not qualified according to the by-laws of 
 the company, at the time of his election, the whole trans- 
 action will be null, although a sufficient number of 
 shares be afterwards allotted to him, in order to qualifv 
 him for the position. Nor will the rule be satisfied b"v 
 a transfer to him of nominally paid-up shares, liut U 
 u person accept an allotment of shares, and consent 
 that his name be placed among the number of directors, 
 he cannot escape liability with respect to such shares. 
 
 (a) Harvey Lewis' Case, 20 Law Times, New Series, 673. 
 
 (b) 18 Weekly Reporter 180. * 
 
26 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 10. Disqualification of. 
 
 The Canadian Acts make no provision for the dis- 
 qualification of directors wiiile holding office, though it 
 may be presumed that in the event of their ceasing to 
 own and hold the requisite number of shares, they 
 would be considered disqualified, and no longer entitled 
 to sit and act as directors. But a mortgage of his 
 shares by a director would not necessarily amount to a 
 disqualification. And, it appears, tliat by the laws of 
 the Provinces of Ontario and Quebec, the rule would be 
 the same with regard to a pledge or transfer of such 
 shares as collateral security. 
 
 In Phelps against Lyle (a), it was held, that a direc- 
 tor does not necessarily vacate his seat by becoming 
 bankrupt, unless so stipulated by the articles [or, by the 
 by-laws] of the company. 
 
 Nor does a prohibition in the articles against a 
 director voting " as a director in respect of any matter 
 in which he is personally interested " prevent him from 
 voting as a shareholder at a general meeting in respect 
 of such matter. 
 
 11. Acts of de facto Directors Valid. 
 
 Another point worthy of remark is that, with re- 
 spect to third parties at least, who act bona fide and 
 without notice, defects or irregularities in the appoint- 
 ment or election of a director, do not invalidate acts 
 done by him bona fide in that capacity. If it were 
 iierwise, the atfairs of a company would be always 
 subject to be thrown into confusion, if, indeed, it would 
 be possible for a company to carry on business, owing 
 to the lack of confidence which such a state of things 
 would naturally engender. 
 
 12. Retirement of. 
 
 Another point akin to this is the retirement of a 
 director during the pendency of the period for which he 
 was elected. 
 
 (a) 10 Aclolphu8 and Ellis Reports 113. 
 
 I 
 
DIRECTORS. 07 
 
 Has a director or aot the right to retire at will 
 during the pendency of such period? The cases give no 
 definite or decisive answer to this. A consideration of 
 the authorities and cases lead to the conclusion that 
 each case depends upon the circumstances connected 
 with it. 
 
 That is to say, that if a director wished to retire 
 from his office during the term thereof, and there was 
 no objection to it on the part of his co-directors, his 
 resignation would doubtless be accepted. 
 
 On the other hand, if a director wished to retire 
 merely to escape from the responsibilities of the position 
 at a time when the company was suffering from adverse 
 circumstances, or from difficulty or embarrassment of 
 any kind, or if upon any other ground the company 
 could show valid reason why he should not be allowed 
 to retire, there is no doubt that they would be sustained 
 in their objection by the courts. 
 
 13. Election of. 
 
 That the directors shall be elected by the share- 
 holders is in' accordance with one of the fundamental 
 principles of Joint Stock Companies, as distinguished 
 from ordinary partnerships. In the latter, every mem- 
 ber of the partnership is the agent of the others, and 
 entitled to take part in the affairs of the partnership 
 and to bind the others by his acts, in so far as such 
 acts relate to the business of the partnership. 
 
 Not so the members of a Joint Stock Company, 
 who, as members simply, are not entitled to interfere 
 in the management of its affairs, or to bind the others 
 in any way, but they are nevertheless not without a 
 voice in its transactions, and especially in' the election 
 of those who are to be the agents of the others, who are 
 to bind them by their acts, and to whom is intrusted 
 the conduct of the company's affairs. 
 
 The following cases re.specting the election' of direc- 
 tors may be found of interest. 
 
 1. At a meeting of the shareholders of a company, 
 the capital stock of which was held by a few, a chair- 
 
t 
 
 28 
 
 SHAKEHOLDEH.S ANJ) DlltECTOKS MANUAL. 
 
 mau was elected by a majority of the votes of those 
 present, without regard to the stock held by theui. Two 
 of the shareholders, who were also provisional directors, 
 and who were candidates for re-election, were appointed 
 scrutineers in the same manner, and directors were then 
 elected, excludinjjt the plaintiff. The plaintiff was presi- 
 dent of the company, and held a larjije amount of stock, 
 sufficient with that held by those who were favourable 
 to him to have controlled the vote if it had been taken 
 according to shares. It was the duty of the scrutineers 
 to decide as to what votes were valid, and they also, 
 with the aid of le{j;al advice, interpreted an instrument 
 under which the plaintiff had advanced a large sum of 
 money to start the company, and which provided for the 
 future disposition' of the shares of the company, held by 
 the plaintiff as a security for his advances, and allowed 
 certain persons to vote as being centals que tru.stent of 
 a portion of such shares: — Held, that the duty of the 
 scrutineers was so plainly in conllict with their interest 
 as candidates for the directorate that they were dis- 
 qualified from so acting, and the election was set aside, 
 and a new election ordered, with costs to be paid by the 
 defendants («). 
 
 2. An election of officers obtained by a trick or 
 artifice cannot be considered a hova fide election, but 
 when shares have been actually purchased and i)ai(l for, 
 the fact of their being purchased with a view to influence 
 the election is no objection (h). 
 
 3. The plaintiffs were a company incorporated un- 
 der The Canada Joint Stock Companies' Act, 40 Vict. c. 
 43. Bv section liJ), the directors were to be elected bv 
 the shareholders in general meeting assembled, at such 
 times as the by-laws of the company should prescribe; 
 and by section 3t), in default of other express provisions 
 therefor in the letter.^ patent or by-laws, such election 
 should take place yearly, upon notice; that at all 
 
 (it) Dickson against McMuiray, 28 Chy. 533. 
 
 (h) Toronto Brewing and Malting Co. against Blake, 3 Ontario 
 Beports 175. 
 
DIRECTORS. 
 
 29 
 
 ^'eneral nieetinjjs each shareholder who had paid all 
 calls should be entitled to vote on each share held by 
 him; and that all (iiiestions should be determined by the 
 majority of votes. By section 'M, the failure to elect 
 directors at the proper time should not dissolve the 
 company; but such election should take place at any 
 general meeting of the company duly called for the pur- 
 pose, the retirinfi directors to continue in office until the 
 election of their successors. JJy section' 'A-, power is 
 given to the directors to pass by-laws for, amongst other 
 things, the time, etc., of the holding of the annual 
 meeting of the company, the calling of meetings, regu' • 
 and special, of the directors and of the company, the 
 quorum at such meetings; but every such by-law, unless 
 contirmed at a general meeting of the company, should 
 only be in force until the next annual meeting thereof; 
 one-fo,urth in value of the shareholders could at all times 
 call a special meeting for the transaction of such busi- 
 ness as might be specified in the notice given therefor. 
 By a by law, passed by the directors, the last Tuesday 
 in September was fixed as the date of the annual general 
 meeting, and the quorum for such meeting was to con- 
 sist of five members; but at a special meeting they were 
 required in addition to represent one-third of the capital 
 stock. In 1884 there was no election of directors at the 
 appointed time, owing to the office where the meeting 
 was to have been held therefor being locked up and the 
 defendant refusing to attend the meeting or give up the 
 books, etc. ; and in October a special general meeting of 
 the shareholders was held, called on notice, stating the 
 object thereof, on a requisition by one-fourth in value of 
 the shareholders, and directors were elected, who ap- 
 pointed a new secretary. At the meeting there were 
 present three-fourths of the qualified vote and one-third 
 of the subscribed capital, but considerably less than' that 
 amount of the nominal capital. In an action by the 
 company against defendant for the non-delivery of the 
 books, etc., to the new secretary, the defendant set up as 
 a defence that he was still secretary, because, as he 
 alleged, the directors who appointed the new secretary 
 
80 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 were not duly elected, and that there was not a quorum 
 at the meeting to transact business: — Held, under the 
 circumstances, there was authority to call the special 
 general meeting for the election of directors; and that 
 it was duly called by the proper number of share- 
 holders: — Held, also, that the directors could by by-law 
 determine the quorum and all other formal proceedings 
 for the control and conduct of the meetings of the board 
 and shareholders; that there was a proper quorum 
 present at the meeting under the by-law; and if the 
 by-law had required such one-third to be of the whole 
 capital stock it would hr ve been ultra vires as opposed 
 to section 32. Per Rose, J., the words of section 31, 
 "any general meeting of the company duly called for 
 the purpose," properly describe a special meeting which 
 may be called as provided by section 32: — Held, also, 
 that on the evidence the defendant must be deemed to 
 have unlawfully detained the books, etc., that there was 
 an election of directors de facto and a suit in the com- 
 pany's name; and an officer of the company could not be 
 permitted to withhold what belonged to the company. 
 In any event the defence set up was not the proper way 
 of testing the election of directors, which should have 
 been by motion to stay or set aside the proceedings (a). 
 
 14. Term of Office of. 
 
 The term for which directors are elected is usually 
 one year. This is in practice by far the most ordinary, 
 if indeed, it be not the universal period or term of office 
 in this country. Under the English Act the system is a 
 different one. There one-third only of the directors retire 
 at the end of the year, and are replaced by the election 
 of others. This retiring third is determined for the first 
 two elections, before the system of rotation is establish- 
 ed, by ballot, in the same manner as their successors 
 are chosen. Though the object of this system is very 
 good, being simplj' to provide that a majority of the 
 
 (a) Austin Mining Co. against Gemmell, 10 Ontario Reports 696, 
 
 C. P. D. 
 
DIUECTORS. 
 
 81 
 
 directors shall remain from one year to another, so that 
 the management of the company shall not at any time 
 be thrown entirely into the hands of new directors, 
 in practice it is found that without this provision, except 
 in very unusual cases [when indeed the English system 
 would necessarily be found an inconvenience rather 
 than otherwise], the result is the same. 
 
 16. Powers of. 
 
 As a company acts entirely by its directors, as all 
 the operations of the company, whether decided upon 
 by the managing board or authorized by special resolu- 
 tion of the shareholders, are set in motion by the direc- 
 tors and officers of the company, no very distinct line 
 can be drawn between the powers of the directors and 
 the powers of the company itself. Though not exactly 
 identical they are so merged in each other as to make a 
 discussion of the one necessarily, a discussion of the 
 other. 
 
 In a word, whatever the company can do the 
 directors can do, subject to confiiiimtion or otherwise, 
 by a general meeting of the shareholders. The company, 
 itself cannot act in its own person, for it has no visible 
 personality. So that the only way in which it is possible 
 to speak of the powers of directors as distinguished from 
 those of the company, is in reference to the acts which 
 they may or may not do, or contracts which they may 
 or may not enter into without the previous authoriza- 
 tion or subsequent approval of the shareholders. The 
 powers of the company itself are, as we have seen, con- 
 fined to the particular objects specified in its act or 
 instrument of incorporation. Of the powers of the 
 directors in their relations to the company, some idea 
 may be obtained by considering first, ^the status of a 
 director. 
 
 16. Status of a Director. 
 
 The position of directors of a public company is that 
 of agents of the company, and in order to ascertain the 
 
T 
 
 32 
 
 SHAUEHOI.DEHS' AND DIHKCTOlls' MANTAF.. 
 
 pxtent of their authority it \h nocvHHwry to consid*'!* th(» 
 m iMTal law dt'liniiij? the rehitloim of principal and 
 agent. 
 
 The ruh'H governing the directors, the company and 
 the general public, in their several relations one with 
 another, are the rules which govern the relation of 
 principal and agent, and those with whom they deal, 
 everywhere, subject to the provisions of the act under 
 which the company was incorporated and of its letters 
 patent. Third parties, as well as members of the com- 
 pany, will be deemed to be ac«|uainted with all the pro- 
 visions of the instrument incorporating the company, 
 and any act of the directors exceeding their liniite<i 
 authority will be voic. unless it is capable of being and 
 be sanctioned by the '^mpany. The directors then are 
 the special agents of tiio company, in so far as they are 
 restricted in' their agency to the particular objects of 
 the company, and by the provisions of the letters patent, 
 but they are general agents also in so far as their 
 powers extend incidentally to all matters not specially 
 provided for, and not foreign' to the objects of the 
 company. 
 
 17. Right of a Diiiectou to See Accdunts, etc. 
 
 The directors of a company have no power, by any 
 resolution of their own, to exclude one or more of their 
 members from access to the company's books. This has 
 been decided in suits against directors who, in' answers 
 to interrogations as to the contents of the books, have 
 sworn ignorance of those contents and inability to ascer- 
 tain them in consequence of orders given by the other 
 directors to the officers having charge of the books, not 
 to allow them to be seen'. This answer is insufficient, 
 for the directors interrogated must, if necessary, enforce 
 their right to examine the books, and time will be 
 aflforded them for that purpose. A board of directors 
 cann'ot delegate to its officers, or to third parties, its 
 statutory powers to allot stock or make calls. 
 
 IS. Contracts Between Directors and Company. 
 In the case of Beatty against North Western Trans- 
 
DIUECTOKS. 
 
 83 
 
 I»oi'fatioii Coini>iUiy et al., in the Ontario Court of 
 Appeal, .1. II. It., one of the defendants, a director of the 
 defendant (•;)nipany, perMonally owned a veHsel, "The 
 Iniled Knipire."' valued by him at |ir)(M«»(», and wan 
 possessed of tlie majority of the shares of the company, 
 some of whicli In; had assi^ni'd to otliers of the defend- 
 ants in sucli numbers as «iualitied them for the position 
 of directors of tlie company, the dutieH of wiii<h tliey 
 diHchai'y:ed. 
 
 ri)on a proposed sale and i)nrcliase by the comjtany 
 of the vessel "The Iniled Empire," the l)oard of direc- 
 tors [including? J. H. B.] at their board meetiuK a(h)pted 
 a resoInti((n ap{)rovini; of the pnnhase by the company 
 of such vessel; and subsecpiently at a {general mcM'ting of 
 the shareholders, including' •«. H. H. and those to whom 
 he had transferred p(,rtions of the stock, a like resolu- 
 tion was passed, the pliiintilf alone dissent inj,': — 
 
 Held, that althoujj:h th(» purchase or the resolution 
 of the directors alone mij,'ht have been avoich'd, the 
 resolution of the shareliolders validated the transaction, 
 and that there is not any principle of equity to prevent 
 J. il. U. in such a case from exercising; his rij^hts as a 
 shareholder as fully as other members of the com- 
 I>any ((/). 
 
 In the absence of agreement there is clearly no duty 
 or obligation on the part of directors to pledge their 
 own' credit for ths benefit of the company (b). 
 
 Where certain shares were allott*^! to one of the 
 directors of a company at par, in consideration of wliich 
 he ottered to sujjply funds to meet a pressing demand 
 upon the company, and he voted on these shares at a 
 general meeting of the shareholders, and no opposition 
 was at the time made to his so doing: — Held, that the 
 shareholders must be considered to have ratiiied the 
 transfer, and could not afterwards object to it as im- 
 j) roper (c). 
 
 (a) 11 App. Rep. 205, and which judgment was affirmed by the 
 Privy Council, 12 App. Ce 8. 589. 
 
 (6) Christopher against Noxon, 4 Ontario Reports, 672. 
 (c) lb. 
 
 W.8 D.M.— 3 
 
Mill 
 
 84 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 It was nlloj^ed that he thus a(«|uiird such stock in 
 order to obtain (ontiol of tlic coniijany: — Scinblc, tliat 
 this would not be improper, if no iniproj)er means were 
 used by liim ; but that had lie made a profit thereby, the 
 company mij?ht perhaps liave claimed it (a). 
 
 An allotment of shares to a director, if a (juestion- 
 able act, may be ra^iiied by the company, and for this 
 purpose, as for all other acts within the power of the 
 corporation, the approval of a majority of shareholders 
 is sufficient (/>). 
 
 A director of a joint stock company havin};- a judg- 
 ment and execution of his own apiinst the projierty of 
 the company actin}»- in ii;ood faith, purchased the same 
 at a sale by mortpifi^ees, under a power of sale for 
 |8,4()<), and sold it in the following year for |;23,()00:— 
 Held, in winding-up proceedings, that he could not pur- 
 chase for his ov a benefit, but held the land as trustee 
 for the company and was accountable for any profit 
 received on a re-sale, and by reason of his refusing to 
 pay over or account for such profits, and in fact by his 
 appearing as a bidder at the sale and so dami)ing the 
 bidding, was guilty of a breach of trust within K. S. C. 
 c. 129, s. 83 ((•). 
 
 18. General Remarks Concerning Directors. 
 
 Can a man holding a plurality of responsible offic( s 
 conscientiously discharge the proper duties devolving 
 upon him from each position of trust, or does he 
 nominally pretend to do so? This question has been 
 asked by a shareholder, and, doubtless, many others of 
 the same class have often refiected upon the important 
 matter, dismissing their conclusions with a shudder and 
 a hope. 
 
 It is not uncommon to find one man, conducting a 
 large and legitimate busim^ss of his own, connected as 
 a director with two, three and more public companies 
 
 («) Christopher against Noxon, 4 Ontario Reports, 672. 
 
 (b) lb. 
 
 (c) lie Iron Clay Brick Manufacturing Co., Turner Case, 10 O. R. 113. 
 
DIRECTORS. 
 
 35 
 
 I 
 
 
 i 
 
 where lai'p:e financial interests demand carefnl watchinj; 
 and manajjement in every detail. 
 
 With the promoters of large finamial and commer- 
 cial companies the questions of ability and moral 
 responsibility are not as a rule discussed so far as re- 
 j;ards the directorate. Far more important is it con- 
 sidered that they shall place the company under the 
 shadow of great names. Men of inHuence, standing and 
 fortune are secured, often irresi)ective of age and ability. 
 In England the acquisition of one or two titles is usually 
 a desideratum in floating a new concern. The Earl of 
 This and the Marquis of That permit the use of their 
 names, and become the chief guinea-pigs in the cage of 
 directors. Of course very few of this class of directors 
 ever pretend to look into the business— -they are content 
 to meet once a week or so, chat over a snuill luncheon, 
 pocket a trifling fee, and overlook the books entirely. 
 They are the much-abused figure-heads. There is the 
 same class of useless directors in certain Canadian com- 
 panies, handling and managing large financial affairs. 
 
 A man nuiy be successful and clever in a business to 
 which he has been applying himself for years; but it 
 does not follow that he will be e(puilly useful or fortu- 
 nate in helping to conduct auother of which he knows 
 nothing. 
 
 There is another danger in men holding ofiices in 
 several companies formed for financial business. It is 
 l)ossible by collusion for directors to accommodate one 
 another or the institutions they direct, and a, l()o])hole 
 for fraud is left o])en, which should not be forgotten in 
 these days of commercial jugglery. 
 
 Shareholders should, therefore, disceuntenance such 
 an anomalv if thev wish their savim',s to descend to 
 their ottsj)ring, as the greed for prominence, more 
 particularly when pay is attached to it, beclouvls too 
 frequ(>ntly the sense of honor which ought to influence 
 the conduct o^ men holding trust i)ositions, and as 
 to whom the illustrious Hurke once <leclared that 
 " Those who execute public pecuniary trv.nts ought of all 
 men to he the viosi strictly held to their duty." 
 
 i 
 
mmmfm 
 
 CHAPTFR IV. 
 
 
 MEETINGS. 
 
 1. 
 
 Introductory. 
 
 10. 
 
 Procedure at General 
 
 2. 
 
 Scope of the Surject 
 
 
 Meetings. 
 
 
 — Notice. 
 
 
 1. Ciiaiuman. 
 
 8. 
 
 First Meeting. 
 
 
 2. Rei'oktb. 
 
 3. Poll. 
 
 4. e.\lloting. 
 
 4. 
 
 Ordinary and Extra- 
 
 
 
 ordinary Meetings. 
 
 11. 
 
 Adjourned Meetings. 
 
 5. 
 
 Where Meetings may 
 
 12. 
 
 Stockholders can Act 
 
 
 Be Held. 
 
 
 ONLY AT Corporate 
 
 6. 
 
 Quorum. 
 
 
 Meetings. 
 
 7. 
 
 Voting. 
 
 13. 
 
 Directors' Meetings. 
 
 B. 
 
 Who may Vote. 
 
 14. 
 
 Proceedings of Direc- 
 
 9. 
 
 The Majority of Votes 
 Cast Shall Elect. 
 
 
 tors. 
 
 1. Introductory. ' 
 
 The stockliolders of a corporation constitute the 
 origin, existence and continuance of the corporation 
 itself. 
 
 They elect its officers, control through the election 
 of directors its general policy, and within the charter 
 limits may prolong or dissolve its existence at their 
 pleasure. All these vital powers of the stockholders 
 can be exercised by them only in corporate meetings, 
 duly convened and properly organized for the trans- 
 action of business. Accordingly-, the method of calling 
 together a corporate meeting, the time and place of that 
 meeting, the notice to be given to the stockholders and 
 the various incidents relative to a proper convening of 
 the members of the corporation, are of great importance. 
 They constitute the subject of this chapter. 
 
MEETINGS. 
 
 37 
 
 2. Scoi'E OF THE Subject — Noitch 
 
 The business wliicli the stockliolders of a corpora- 
 tion iu ineetinj; asssembh'd liave the power to transact is 
 not extensive, bnt it is of great inij)ortai>ee. They eh-et 
 tlie directors, pass upon amendments to tlie cliarter, 
 check any ultra vires acts, de< ermine whether any in- 
 crease of tlie capital stock shall be made, make the bv- 
 laws and dissolve or continue tlie corporation. These 
 c(mstitute the chief functions of a stockholder's meet- 
 ing. They are extraordinary in their character, and 
 although they are exercised at long intervals, are of 
 vital importance. 
 
 When, therefore, no sufficient notice is prescribed 
 by charter, or statute or by-law, each stockholder is 
 entitled to an express personal notice of every corporal e 
 meeting. No usage can operate to excuse a failure to 
 give such a notice. 
 
 3. First Meetixg. 
 
 The Ontario Companies' Act directs that "the pro- 
 visional directors of every comiiany shall, by a regis- 
 tered letter addressed to each shareholder, call a general 
 meeting of the company to be held within two months 
 of the date of the letters patent, for the purpose of 
 organizing the (nmipany for the commencement of 
 business. This first general meeting shall be held at 
 such convenient place as the directors may determine. 
 U/) If the said meeting is not called by the jirovi- 
 sional directors within the time required by this 
 section, any three or more shareholders in the 
 company shall have power to call the meeting 
 and to proceed to the organization of the com- 
 pany." 
 
 4. Ordinary and Extraordinary. 
 The general meetings of a comi)any may be divided 
 into two kinds, viz.: ordiiwiry and extraordinary. The 
 former are convened at regular and stated jteriods, as 
 established by the letters patent or by-laws of the com- 
 pany, as annually or semi-annually. The latter, those 
 
38 
 
 SHAREHOLDERS AND DIRECTORS MAXUAL. 
 
 ■Hi 
 
 which are oonvoned at any other time for the transaction 
 of special business not foreseen or provided for at 
 ordinary general meetings. 
 
 5. Where Meetings May Be Held. 
 
 By the common law of England it appears to have 
 been taken for granted that the general meetings of a 
 corporation would always be held within the jurisdiction 
 from which its charter emanated, as no absolute rule 
 appears to have been laid down with regard to it. It 
 may be that in that country no case has arisen in which 
 a, corjwration has pretended to hold a regular meeting 
 of all its members beyond the limits of such jurisdiction. 
 Even the Companies' Acts are silent on the subject, 
 saying merely that " subsequent general meetings [i.e., 
 meetings subsequent to the first at which such arrange- 
 ments could be made] shall be held at such time and 
 place as may be prescribed by the company." In this 
 country, however, it is not hard to conceive of Joint 
 Stock Companies, the greater part of whose stock is held 
 in the United States, for instance, or vice versa and bj' 
 reason of which, it might be considered at some time 
 desirable to hold general meetings in that jurisdiction 
 in which the majority of the shareholders were found. 
 
 In the Ignited States i)arti<ularly it can be readily 
 imagined that comi)anies exist everywhere, the bulk of 
 whose stock is held in another State, or other States, 
 from that in which the company had its birth. 
 
 Hence, we are not at all surprised to find that the 
 question has been raised as to the legality of a general 
 meeting held outside the jurisdiction in which the com- 
 pany was created, and to discover that it has been laid 
 down, " That all votes and i)roceedings of persons pro- 
 fessing to act in the capacity of corporations, when 
 assembled beyond the bounds of the State granting the 
 charter of the corporation, are wholly void" (a). And 
 the Code of California goes much further than this, and 
 provides that, " The meetings of stockholders and board 
 
 -ijr 
 
 (a) Angell & Ames Corporatione, sec. 498. 
 
MEETINGS. 
 
 39 
 
 of directors of a corporation must be hold at its oftioo 
 or principal place of business." lint tlioujjli this is the 
 more rej^ular and desirable mode, it is not i)retended 
 that by the general law of corporations, genin-al meet- 
 ings of the members must be held at its chief office or 
 place of business unless so provided by its by-laws or 
 charter. And hence we And it stated by an authority 
 already cited (a) that, " Where according to the by-laws 
 and usages of a society, their meetings for the trans- 
 action of business are opened by a presiding otlicer, wlio 
 holds his ottice for a fixed tent' and no meeting is con- 
 sidered duly organized unless (ii)eiied by him, and such 
 officer is prevented by the violence of members of the 
 association from discharging his duty at the accustomed 
 place of meeting, he and such of the society as think 
 proper to accompany him, may retire to some convenient 
 place adjacent and there open' the meeting, and their 
 acts and doings will be obligatory upon the society,'' 
 etc. And in McDaniels against The Manufacturing 
 Company (/>), " Where the by-laws of a cori)oration re- 
 quiivd the meetings of the corporation' to be held, at the 
 counting-room of the corporation, and it appeared from 
 the records that a meeting was held at the dwelling 
 house of the general agent and clerk, without stating 
 that it was at the counting room of the corporation, if 
 was held, that the Court would presume Ihe counting 
 room was, for the time being, at that plac(\'" 
 
 The Canadian Acts usually contain sections pre- 
 scribing that the general meeting of shareholders shall 
 be held within the limits of the jurisdiction from which 
 the charter emanated, leaving it to the regulations or 
 by-laws of the comi»any itself to prescribe the exact 
 place at which they shall be held. 
 
 6. Quorum. 
 The Canadian Acts empower the directors to make 
 by-laws, subject to confirmation by the shareholders, 
 fixing the quorum. The Ontario Act, sec. o(i, provides 
 
 (a) Angell & Ames Corporations, sec. 41)7. 
 (h) 22 Vt. 274. 
 
:?i.,,-rn,':i,j.vr.'y< 
 
 ■ ■•■ ^ 
 
 40 
 
 SHAllEUOLDERS AND DIUECTOUS MANUAL. 
 
 |i 
 
 '] ! 
 
 that at a special meeting called upon a requisition of the 
 shareholders, the quorum shall be ascertained as follows: 
 
 " If the shareholders at the time of the meeting do 
 not exceed ten in number, the quorum shall be three; if 
 they exceed ten there shall be added to the above 
 quorum one for every four addilional members up to 
 fifty, and one for every ten additional members after 
 fifty, with this limitation, that no quorum shall in any 
 case exceed twenty." Another useful i\\\e, provided by 
 the following section, is " If within one hour from the 
 time api)()inted for such special general meeting, called 
 upon, or pursuant to, requisition aforesaid, a quorum is 
 not present, the meeting shall be dissolved." 
 
 7. Voting. 
 
 The rules governing the deliberations of the meeting 
 are the same as those governing the proceedings of deli- 
 berative assemblies generallj^, except with respect to the 
 voting, for which there are special rules in' all Joint 
 Stock Companies' regulations, or all Joint Stock Com- 
 panies' Acts. That rule usually is that each share repre- 
 sented shall carry a vote. This is a very simple rule, but 
 one involving a little trouble in determining beforehand 
 to how nmny votes each member present is entitled. 
 
 The votes of the " two-thirds in value of the share- 
 holders " who may vote for a by-law authorizing the 
 borrowing of money, etc., on the property of the com- 
 pany are, where there has been no default after a call, to 
 be computed upon the face value of the number of 
 shares held, and not upon the amount paid upon such 
 shares (a). 
 
 The freedom of every shareholder to vote as he 
 thinks best for his own interests is unrestricted, and in 
 the absem-e of anything to the contrary in the articles 
 [or by-laws] of the company, mny vote upon a question 
 in which he is i)ersonally interested. So that where the 
 question was whether or not the comjjauy should adopt 
 
 {a) Purdom v. Ontario Loan and Debenture Co., 22 Ontario 
 Reports, 5»7. 
 
MEETINGS. 
 
 41 
 
 a bill which had boon flU'd to inipoaoh Iho title of somo of 
 the shiii'oholdoi'H, it was hold that Iho sharoholdors in 
 question wore entitled to vote. 
 
 (S Who may Vote. 
 
 A lunatic or idiot may accordin}^ to the English 
 articles referred to, vote by his guardian or trustee. 
 And so with minors. Itut as between Iho shareholder 
 and the comi)any, the jtorson entitled .j the right of 
 voting is the [xMson legally entitled to the shares, the 
 person whose name is on the register. The company 
 have no right to iniiuire into the beneficial ownership. 
 And if stock be held jointly by two or more persons, any 
 one of them i)rosent at a meeting may. in the absence of 
 the other, or others, vote thereon; but if more than one 
 joint-stockholder be jiresout or be represented by proxy, 
 they must vote together on the stock jointly held. But 
 in re Wedgewood Coal and Iron Co (a), it was held that 
 holders of debentures which pass from hand to hand by 
 deliver^-, must produce them at or before a meeting 
 called to vote upon a reconstruction scheme, in order to 
 be entitled to vote at such mooting. 
 
 Again, a i>erson is by all the Companies' Acts, 
 entitled to vote on shares held by him in trust, and 
 semble, even where he is trustee for the company itself, 
 if his name appears on the register as the liolder of such 
 shares in trust. And the chairman also, it would appear, 
 may vote on his shares as any other member, though he 
 has the casting vote in case of a tie, besides. And a 
 person, though not present, may vote by proxy, accord- 
 ing to the universal practice of Joint Stock Companies, 
 though no such right exists at common law. The object 
 of this privilege is clearly to allow those who are unable 
 to be present at a general meeting, cither from sickness, 
 distance, or any other caus(», to exorcise, through or by 
 means of others, the right which their shares give thom 
 of influencing the attairs of an institution in which their 
 means or fortunes are involved. 
 
 (a) {j Ch. D. 627. 
 
' 
 
 . il I 
 
 42 hhaueholdeiis' and directohs* manual. 
 
 9. The Majoiuty of Votes Cast Shall Elect. 
 
 It is the well sett led rule in corporations havinj; a 
 capital stock divided into shaivs that a nuijority of the 
 votes cast at any election shall elect. And this majority, 
 moreover, need not be an actual numerical majority of 
 all the votes which all the stockholders have, but only 
 the majority of the votes cast. 
 
 The question who is entitled to vote upon a parti- 
 cular share of stock is, as a ^ct'uei'al rule, answered by a 
 reference to the corporate transfer book. 
 
 He who is there ref>;istered as the owner of the stock 
 is entitled to vote upon it. 
 
 10. Procedure at General Meetings. 
 
 The Ontario Companies' Act directs that the Presi- 
 dent of the Company shall i)reside as chairman at every 
 ^jeneral meetinjf of the company. It further provides, 
 that if there is no president, or if at any meeting he is 
 not present within fifteen minutes after the time appoint- 
 ed for holding the niieeting, the shareholders present 
 shall choose some one of their number to be chairman. 
 
 At the time appointed for the meeting, the President 
 should at once take the chair. If he is not present, the 
 members, after the lapse of the proper interval, should 
 elect a chairman. This will be effected by passing a 
 
 resolution, duly projjosed and seconded, " That Mr. 
 
 be appointed chainnau' of this meeting." Some leading 
 shareholder will propose this. 
 
 The chairman, having taken the chair, will ascertain 
 that a proper quorum of members is present. This de- 
 pends on the by-laws. Sometimes a specified number 
 forms a quorum, and sometimes a specified number hold- 
 ing a certain amount of the ciipital. Very commonly 
 the (luorum for an ordinary meeting is different from 
 that of an extraordinary meeting. In order to ascertain 
 that a quorum is i)resent, it may be necessary to refer 
 to the register of members and stock ledger, and accord- 
 ingly they sli aid be at hand for reference. 
 
MEETINGS. 
 
 43 
 
 If thorp is not a quorum present within tlio time 
 fixed by the regulations, the meeting must be dissolved 
 or adjourned, according as may be provided by the regu- 
 lations. 
 
 If, however, it appears that ca i)roper quorum is 
 present, the chairman will announce the fact, and will 
 then call on the secretary to read the notice convening 
 the meeting. This having lunni done, the secretary, 
 according to the practice? of some companies, will be 
 required to read the minutes («) of the last general meet- 
 ing; and the chairman will then say, '* Gentlemen, with 
 your approval, I propose to sign these minutes <as cor- 
 rectly entered.'' l^pon this, debate may arise, but no dis- 
 cussion of the policy of the proceedings record^'d in the 
 minutes so read should be permitted; the only (piestion 
 should be whether they are a correct record of what 
 paswHl, and the chairman should conline the discussion 
 to this point. The minutes, if found correct, or when 
 corrected, will be signed by the chainnan. The object 
 of signing is to make them evidence, admissible in a 
 Court of law, and is a record for the company, and to 
 shew ratification, etc. 
 
 After these preliminaries, the meeting will proceed 
 to transact the business for which it was convened. 
 
 At an ordinary meeting the first step will Ix^ for tlu» 
 chairman to refer to the directors' report, which will 
 probably be taken as read, and make a sp<HHh in relation 
 thereto, concluding with a motion, " That the report and 
 a(!Ounts be ado])ted." This having been seconded, the 
 <hairman will put the question to the meeting as fol- 
 lows: The question is, "That the report and accounts be 
 received and adopted." This is the stage for discussion, 
 and members will probably rise and sj^eak in support of 
 or in opposition to the motion. The chairman should 
 name those who rise to address the meeting. 
 
 When the discussion has ended, the chairman will 
 rise and reply to any criticisms which have been nmde, 
 (a) See proper mode of entering minutes infra. 
 
44 
 
 SHAUEHOLDEUS AND DIHECTOHS MANUAL 
 
 : 
 
 III 
 
 and to any relevant fiuestionB tlial have been asked, and 
 will in conclusion llnally put the (jucHlion thus: "The 
 question is, that the report he adopted. Those who arc 
 in favor of the motion' signify the same by an upliftetl 
 hand — 'M), and the contrary — 10. I declare this motion 
 carried " (or " negatived ")• 
 
 The reticulations very commonly provide that every 
 motion shall be decided in the tirst instan^'e by a show 
 of hands, and where this is the case a show of hands 
 must be taken; but if there is no such provision, the 
 chairman nmy if he thinks lit, take the sense of the meet- 
 inj( by callinj; on those in favour of the motion to say 
 " Aye," and on those who are apiinst the motion to say 
 " No." If there is no sound of " No '' he will declare the 
 motion carried; otherwise he will call for a show of 
 hands, and declare the result accordingly. 
 
 Upon a show of hands the chairnmn will look to the 
 number of hands only, and will not take into account 
 the votes which the owner of each represents in person 
 or as i)rox3-. 
 
 Though it is not uncommon to declare the number of 
 hands in favour of or against a motion, the chairman is 
 not bound to make such declaration. 
 
 The chairuKin having declared the result, a poll may 
 be demanded in accordance w'ith the regulations. 
 
 If a poll is demanded, the Ontario Companies' Act 
 provides " that it shall be taken in such manner as the 
 by-laws prescribe, and in default thereof, then as the 
 chairman may direct. In' the case of an equality of 
 votes, at any general meeting, the chairman shall be 
 entitled to a second or casting vote." 
 
 Generally speaking it is more convenient, if the regu- 
 lations allow, to take the poll at once, but there may be 
 cases in wiiich an adjournment is desirable, p.r/., where it 
 will require miany hours to take the poll. 
 
 If tlie company has many shareholders it is not un- 
 usual to appoint a scrutineer or two to take the poll, and 
 in some companies the bj'-laws expressly require such 
 appointment. In a small company the poll is often taken 
 by the chairman. 
 
MEETINGS. 
 
 45 
 
 In taking: the poll it is usual to raiiso a list of share- 
 hohh'rs to be made out from the register, thuH: — 
 
 NAMES OF 
 
 SlIAItt:- 
 HOLIlEItB. 
 
 NrMDKU 
 
 OF 
 BHAltKS. 
 
 NUMHER 
 OF 
 
 VOTES. 
 
 OIlHEnVATIONS. 
 
 VOTES GIVEN. 
 FOR. AGAINST. 
 
 At the time appointed for taking the poll, the share- 
 holders who vote personally will come up to the voting 
 table and write their names on sheets of i)aper headed 
 "For" or '^ Against •' the motion, as the case may be. 
 A member voting as proxy for another will write down 
 his own name, and also that of the perso. whose proxy he 
 is, e.(7., "John Smith, by W. Jones, his proxy." How- 
 ever, sometimes it is arranged that a member signing his 
 own' name shall be deemed to vote for himself and for all 
 those whose proxy he is. 
 
 The votes having been taken, the chairman or scruti- 
 neers will enter them in the list of votes, in the column 
 " For " and " Against," as the case may be. If, on refer- 
 ence to the books or otherwise, a vote tendered is, tor 
 any reason, found to be invalid, c.r/., because the voter is 
 in arrears for calls, or the proxy is not produced, the 
 cliairman or scrutineers will reject the same and put a 
 note in the column of observations stating the reason for 
 rejection. 
 
 The poll having been closed, the numbers will be 
 added up and the result ascertained. 
 
 If the poll is to be by ballot it is usual to prepare 
 ballot papers beforehand. These, after being initialed 
 
49 
 
 NTIAREHOLDBBa AND UUUiJDTOiUi MANUAL. 
 
 I 
 
 on tho back bv the chsnrnian' or KciMitinccr, arc handod 
 to the in(Miib<'i's. the ballotH bchifj: ho arran^'cd that <'a<"h 
 Hhandioldcr nhall luivc one votr for every share of stock 
 owned by him. After llie HliarehohU'r has marked hiH 
 ballot it \H r<'turm'd to the chairman or scrutineers, and 
 the poll havinjj; been closed, the ballots foi" or af^ainst 
 will be counted and the result ascertaim'd. 
 
 The <hairnuin will then stat<» the result to the meet- 
 ing, and declare that the motion has been carried or 
 negatived, as the case may be. 
 
 If at a general meeting the chairman ])erceives that 
 the tinw? of the meeting is being wasted by a can'tanker- 
 ous shareholder, and that the nueeting wants to vote, he 
 may move, or get some one else to move, " That tlie 
 question l>e now put," and if this is decided in the 
 affirmative, will act accordingly. A meeting is not 
 bound to hear a member, nor is the chairman bound to 
 find him a hearing. A chairman should rule a meeting 
 fairly and finnly. He should bear in mind that if the 
 majority of the members of the comimny are with him, 
 a minority will not be able to ui)set the proceedings 
 merely because some slight irregularities have occurri'd 
 at the meeting. 
 
 11. Adjourned Meetings. 
 
 An adjourned meeting is but a continuation of the 
 meeting which has been adjourned; and when that meet- 
 ing was regularly called and convened and duly ad- 
 journed, the shareholders may, at the adjourned meeting, 
 consider and detennine any corporate bu.iress that 
 might lawfully have been transacted at the original 
 meeting. But where there is an absence of good faith, 
 and an adjourned meeting is held in such a way as to 
 prevent certain of the stockholders from knowing of it, 
 the proceedings are invalid. Where the original melt- 
 ing was duly called and convened, the stockholders are 
 not entitled to any other notice of the adjourn-ed meet- 
 ing than that which is implied in the adjournment. 
 
meetings. 47 
 
 12. Stockholdeus can Act only at Corpouate 
 
 Meetings. 
 
 StockhoIdcrH ciui hold clccllons jiihI trariHjKt thi' 
 oilun* hiiHiiM'ss wliidi lli«»,v iis a body arc (lualillcd to 
 transact onl.v at a, corjutratc meeting duly callcMl and con- 
 vened. Consciiucntly, all votes taken elsewhere than at 
 su<'li a nieetinj;, and all sejtarate consents, either oral or 
 in writing;, whereby the stockholders asstinie to bind the 
 company, are invalid and void. 
 
 18. DiRECToHs' Meetings. 
 
 There has been some controversy and doubt as to the 
 necessity of ^ivin^ notice of directors' nieetin^s. Many 
 eases apply to directors' nuH'tinf^s the same rules that 
 apply to stockholders' meetinpjs. Other cases hold that 
 less formality and strictness is retpiired in callinj; a 
 directors' meetinf^. Probably the former rule is safer, 
 although the latter rule will utimately i)revail. 
 
 There has also been a question wheth.er directors 
 could vote and act as a board without comin}^ together. 
 Man}' atteni.i)ts have been made to sustain a vote of the 
 directors which they had separately and singly agriH'd 
 to. The law, however, is now clear that such He])arati' 
 assent is void. Directors are elected to meet and confer, 
 and to act after au opportunity for an interchange of 
 ideas. The^- cannot vote or act in any other manner. 
 
 I*os8ibly these differences of opinion may \ye recon- 
 ciled by the principle of law that the acts of a board of 
 directors may be validated by acquiescence, even though 
 the board was summoned irregularly or proceeded 
 irregularly. 
 
 Directors, of course, cannot act or vote by proxy. 
 
 A majority of the whole board of directors constitute 
 a quorum, subject to the by-laws of the company. When 
 the meeting iS properly called and a majority attend, 
 that majority may proceed to transact business. If a 
 majority are pi sent, a majority of that majority bind the 
 board and company, although they are a minority of the 
 whole board. 
 
48 
 
 WIIAREHOLDERS AND DIRECTORS MANUAL. 
 
 I !l 
 
 In the case of the Toronto Brewing and Maltinpf 
 ConiiKiny against lilalve (</), the K. S. <)., (1877) c. I'jd, 
 re(iiiiros tliat companies incorporated thereunder sliall 
 not liave less than three directors, \vlio sliall not be ap- 
 pointed directors unless they are shareliolders, and it 
 was ])rovided by the bylaws of the plaintilT's company 
 that a director should not only be (pialitied when elected, 
 but that he should continue to be so. The plaintiff's 
 coni])aivy was managed by three directors, and oue of 
 them disi>osed of his stock: — Held, that he thereui)on 
 ceased to be a director, and the directorate then became 
 incomplete and incompetent to manage the allairs of the 
 company. Semble, also, even assuiu'ng that a (quorum 
 (2) of the directors could manage the business, yet, where 
 neither the statute nor the by-laws gave ♦^he President a 
 casting vote, resolutions jiassed by such a vote, at a 
 meeting attended only by the I'resident and one other 
 director, were invalid. 
 
 14. Proceedings of I)i hectors. 
 
 The regulations generally i)rovide that the directors 
 may meet for the desj)atch of b'isiness, adjourn, and 
 otherwise regulate their meeting as they think fit, and 
 determine the quorum necessary for the transaction of 
 business, and that until otherwise determined, a specific 
 number {v.ff., three) shall form a quorum. 
 
 The quorum is usually fixed with reference to the 
 nuu'ber of directors, r.f/., if there are five directors, three 
 is the usual quorum. 
 
 The object of fixing a quorum is to avoid the neces- 
 sity of recpiiring all the directors to concur in the trans- 
 action of business. In some regulations the word quorum 
 is not used, but it is provided that no business shall be 
 transacted unless a certain number of directors are 
 present. In substance it comes to the same thing. Of 
 course the regulations of the directors differ consider- 
 ably. The following are of a very simple character: 
 
 (a) 2 Ontario Reports 175, p. 263. 
 
MEETINGS, 
 
 m 
 
 nc 
 
 1. A board meeting,' shall be held every day at o'clock. 
 Such meetinj^s shall be called ordinary board meetings. Other meetings 
 shall be called special. 
 
 2. Every meeting shall be held at the head office of the company. 
 
 3. An ordinary meetinj^ shall be competent to transact the following 
 business, namely : To, etc. All other business shall be transacted at i)> 
 special meeting. 
 
 4. Any director may, and upon the requisition of any director the 
 secretary shall convene a special meeting ; not less than hours 
 notice shall be given thereof to each director. Every such noiice shall 
 be given as follows, etc. The notice must state the time fixed for the 
 meeting. 
 
 5. The quorum of an ordinary meeting shall be two directors, and 
 of a special meeting three directors. 
 
 6. No cheque for more than $ ' shall be signed at a meeting 
 unless directors shall be present. 
 
 7. The company's seal shall not be affixed to any document, except 
 in pursuance of a resolution of the board, and the sealing shall be 
 attested by two directors, and countersigned by the secretary. 
 
 8. A meeting at which not less than directors are present, may 
 suspend or modify these regulations. 
 
 The regulations will be adopted by passing a resolu- 
 tion, *' That the following regulations as to board meet- 
 ings be adopted," and the resolution and regulations will 
 be recorded in the minute-book of the directors' proceed- 
 ings. 
 
 As to the chairman : 
 
 The regulations generally provide for the election of 
 a chairman of the board of directors. And whether this 
 is provided or iiot, the directors usually appoint one. Ju 
 some cases, a deputy-chairman is appointed, and in the 
 absence of the chairnum he will preside. In his absence, 
 the directors present at any meeting will elect on^ of 
 their number to the chair. 
 
 At a meeting of the directors, commonly called a 
 board ineeting, the secretary will be called on to read the 
 minutes of the last meeting, and if found correct, the 
 chairman will sign the same. 
 
 No discussion should be permitted as to the policy of 
 the proceedings recorded. If a director objects thereto 
 
 W.S.D.M. — 4 
 
50 
 
 SHAREHOLDERS' AND DIRECTORS' MANUAL. 
 
 he can, after the minutes have been signed, move a reso- 
 lution impeaching such policy; sometimes, however, the 
 directors' regulations require a special notice or quorum 
 for such a resolution. 
 
 The chairman will then call attention to the business 
 to be transacted. Generally a memorandum paper (a) 
 (previously prepared by the secretary) is produced. 
 
 The chairman will refer successively to the different 
 items of business, and they will be dealt with as the 
 meeting thinks fit. If any difference of opinion exists, 
 the chairman will put the question to the vote, and the 
 decision of the majority will bind the nutting, unless the 
 regulations otherwise provide. The regulations ge^H^rally 
 give the chairman a casting vote, in case of an equality 
 of votes. In some companies the decisions of the meet- 
 ing as to the several items of business are expressed in 
 appropriate resolutions, duly proposed, seconded, and 
 passed. In others a less formal procedure is adopted, 
 and after a discussion of each item, the chairman gives 
 directions to the secretary or manager in relation there- 
 to, with the assent, expressed or implied, of the other 
 directors who are present. In any case the proceedings 
 are recorded by the secretary in the minute-book of the 
 directors' proceedings. 
 
 (a) See form infra. 
 
CHAPTER V. 
 
 BY-LAWS, BOOKS, AUDITORS, CONTRACTS, SEAL 
 
 
 1. By-laws, Effect of. 
 
 2. Difference Between a 
 
 Resolution and a By- 
 law. 
 
 3. Method of Drafting a 
 
 By-law. 
 
 4. Books to be Kept. 
 
 1. Hkcoru of Letters 
 
 Patent, etc. 
 
 2. Keoisteii of 
 
 HOLDERS. 
 
 3. Reqistek 
 
 TORS. 
 
 4. Heoister 
 
 fers. 
 
 5. Stock Ledger. 
 
 G. Books of Account. 
 
 7. Minute Books. 
 
 8. Mode of Entering 
 
 Minutes. 
 
 5. Where Books are to be 
 
 Kept. 
 0. Statement of Income 
 AND Expenditure to 
 be Made. 
 
 7. Inspection of Books. 
 
 8. Auditors. 
 
 1. Duties of an Auditor. 
 
 of 
 
 of 
 
 Share- 
 
 DlREC- 
 
 Trans. 
 
 2. First, How Appointed. 
 
 3. Qualifications of. 
 
 4. Commence.ment op Au- 
 dit. 
 
 5. The Cash Book. 
 
 6. Vouchers. 
 
 7. Reconciliation State- 
 ment. 
 
 8. Cash in H.\nd. 
 
 9. Other Books. 
 The Balance Sheet. 
 Audit Should be Tho- 
 rough. 
 
 Position of Auditors 
 WHEN Accounts In- 
 correct. 
 
 Suc^iESTioN OF Better 
 Methods of Book- 
 keeping. 
 
 9. Method of Drafting, 
 Signing and Sealing 
 Corporate Deed or 
 Contract. 
 
 10. Necessity of Seal. 
 
 11. Seal. 
 
 12. Corporate Instruments 
 
 Made in Name of Of- 
 ficer, Enforceable 
 Against Company. 
 
 10. 
 
 11. 
 
 12. 
 
 13. 
 
 i 
 
 ^ 
 
 1. By-laws, Effect of. 
 
 'A joint stock company, as we have seen, has power 
 to make by-laws within the terms of its instrument of 
 incorporation', and of the Act under which it was 
 formed, for its reguhition and government; and, as 
 every shareholder is a member of the company, he must 
 be held to be conversant with all its rules and by-laws, 
 or at least to have had notice thereof, and to be bound 
 by them. i 
 
il 
 
 52 
 
 SHAUEHOLDEUS AND DIRECTORS MANUAL. 
 
 According to Blackstone, one of the important 
 features of a corporation is tlie power to malce by-laws. 
 A by-law is a permanent rule of action, in accordance 
 with which the corporate affairs are to be conducted. 
 
 2, Difference Between a Resolution and a By-Law. 
 
 A by-law differs from a resolution in that a resolu- 
 tion api)lies to a single act of the corjtoration, while a 
 by-law is a permanent and continuing rule, which is to be 
 applied on all future occasions. 
 
 3. Method of Drafting a By-law. 
 
 It IB desirable that every by-law should have a 
 preamble in addition to the enacting clause — as given in 
 the table of by-laws herein (a). 
 
 4. Books to re Kept. 
 
 As a matter of course and necessity, every enter- 
 prise of any importance, whether individual or associate, 
 must include books in which a record of its proceedings 
 and of its affairs are kept. But jjarticularly so in con- 
 nection with joint stock enterprises, in which the means 
 of a lesser or greater number of persons taking no active 
 part in the management; of its affairs, and who are 
 dependent upon such books for a knowledge of its affairs, 
 are involved; and also where the liability of the mem- 
 bers indivitdually towards the creditors of the enterprise 
 is limited to the amount unpaid on their shares. 
 
 These causes together render the keeping of books 
 by Joint Stock Companies a matter of so much import- 
 ance that the legislatures have not only made it com- 
 pulsory to keep certain books, but have described in 
 detail what such books shall contain and exhibit, and 
 imposed penalties for neglect of such provisions. And 
 the importance of such provisions is so obvious that 
 these, or similar ones, are now found in almost every 
 Joint Stock Companies' Act. 
 
 (a) Infra, ■ . 
 
1? 
 
 ROOKS, ETC. 
 
 53 
 
 These books are: — 1. A blank book in wliich a copy 
 of the letters i^atent and of any sni)pk'mentai'y letters 
 patent, must be written. If the company is incori)orated 
 by special Act, the chai)ter and year of such Act. 
 
 2. Register of Shareholders. — The Ke^ister of Share- 
 holders fiivos particulars of all persons who are, or have 
 been, shareholders. A properly kept indi^x to the Stock 
 Ledger giving the occupation and addresses of the share- 
 holders will, if thought desirable, answer the purpose. 
 
 3. lief/ister of DirecLors. — Gives names and ad- 
 dresses of the directors with dates of election and 
 retirement. 
 
 4. .' ffister of Transfers. — The Register of Trans- 
 fers, as its name implies, gives particulars of the changes 
 which take place in the ownership of shares. 
 
 5. Stock Ledger. — In the Stock Ledger is shown the 
 aggregate number of shares held by each shareholder, 
 with all other particulars. 
 
 The Acts do not prescribe any particular system of 
 keeping these books, but only require that they shall 
 contain the particulars above noted. 
 
 If the number of shares and members is small, these 
 live books may conveniently be bound under one cover; 
 but if large, it is better that they be in separate books. 
 Sample pages of these books will be found among the 
 forms given in this book. 
 
 6. Books of Account. — It need li.irdly be said that 
 under any system the usual cash book, journal and ledger 
 are indispensable. The Ontario Comi)anies' Act requires 
 the directors to have proper books of account kept, con- 
 taining full and true statements 
 
 («) Of the company's financial and trading trans- 
 actions; 
 
 {})) Of the stock-in-trade of the company; 
 
 (c) Of the sums of money received and expended 
 by the company, and the matters in respect of which 
 such receipt or expenditure takes place, and, 
 
 id) Of the credits and liabilities of the company; 
 
54 
 
 shareholders' and directors' manual 
 
 li'i ! 
 
 ! ! !:M 
 
 I 
 
 (c) And also a book or books containing minutes of 
 all the proceedings and votes of the company, or of the 
 board of directors, respectively, and the by-laws of the 
 company, duly authenticated, and such minutes shall be 
 verified by the signature of the president, or other pre- 
 siding officer of the company. As a good and simple 
 system of accounts is extremely desirable, it will in any 
 case of doubt be expedient to take the advice of a pro- 
 fessional accountant as to what other books are requisite, 
 and as to the mode of keeping them. 
 
 7. Minute Books. — Every company should cause 
 minutes of all resolutions and proceedings at general 
 meetings, and at meetings of its directors or managers, 
 to be entered in books provided for the purpose, and 
 such minutes, if signed by the chairman of the meeting, 
 or of the next succeeding meeting, are admissible as 
 evidence in all legal proceedings. 
 
 8. Hfode of Eiiterhuf Minu(r.<t. — The usual course is 
 for the secretary to take, in a book kept for that pur- 
 pose, notes of the proceedings of each meeting, whether 
 a general or board meeting, and afterwards to make a 
 clear record of thorn in the Minute Book, and to read the 
 entries at the next general or board meeting, as the case 
 may be. The chairman then puts them to the vote and 
 signs them if approved; or, if any amendment is re- 
 quired, that is first made, and initialled by him, and the 
 minutes are then signed. 
 
 Every resolution should be in writing and marked 
 by the chairman or secretary, with the result of the vote, 
 and be initialled by him. These resolutions should be 
 carefully filed and preserved for future reference. 
 
 It is genierally advisable to have separate Minute 
 Books for general and board meetings. The former may 
 fairlj- be open to the inspection of members, but the 
 Directors' Minute Book, containing as it does a record of 
 the private affairs of the company, should not be 
 accessible to any but the directors and the secretary. 
 
 The following will give some idea of the mode in 
 which minutes are entered: — 
 
 ;v 
 i 
 
 * 
 
MINUTES, ETC. 
 
 55 
 
 I 
 
 company 
 (at the head office 
 
 th 
 
 The Fourth Ordinary Meeting of the 
 (Limited), held the th of , 
 
 of the company) at o'clock. 
 
 Mr. in the chair. 
 
 The notice convening the meeting was read by the Secretary. 
 The minutes of the general meeting of the company, held the 
 ultimo, were read by the Secretary and signed by the Chairman. 
 
 It was resolved unanimously that the report of the Directors and the 
 accounts annexed thereto be taken as read. 
 
 Upon the motion of the Chairman, seconded by Mr, , 
 
 it was resolved, after discussion (or nem. con., as the case may be). 
 Upon, etc., it was resolved that a dividend, etc. 
 Upon the motion, etc., it was resolved that Mr. 
 be and he is hereby elected a director in the place of Mr. 
 Upon, etc. (vote of thanks). 
 
 A. B., 
 
 Chairman. 
 
 If an amendment be moved, tlie minutes will run 
 thus : — 
 
 It was moved by the chairman, and seconded by Mr. , 
 
 That, etc. 
 
 An amendment was thereupon moved by Mr. and 
 
 seconded by Mr. (Here set it out ; e.y.), 
 
 " That the report be received, but not adopted, and that a committee 
 of five shareholders be appointed, with power to add to their number, to 
 inquire into the formation and past management of the company, and 
 with power to call for books and documents, and to obtain such legal 
 and professional assistance as may be necessary, such committee to 
 report to a meeting to be called for day, the th 
 
 of ." . 
 
 The amendment was put to the meeting and negatived. The original 
 question was then put to the meeting, and declared by the Chairman to 
 be carried. 
 
 5. Where Books are to be Kept. 
 
 Section 10, s.-s. (c), of the Ontario Companies' Act 
 directs that the principal books of account and the cor- 
 poration records shall be kept at the head oflSce of the 
 company. 
 
 6. Statement of Income and Expenditure to be Made. 
 
 The Ontario Companies' Act directs that at each an- 
 nual meeting, or, at least, once in every year, and at 
 
l!|lf^ 
 
 £6 
 
 SHAIIEHOLDEHS' AN'O DIRECTORS' MANUAL. 
 
 I '!! i 
 
 intervals of not more than lifteen months, the directors 
 shall, at a general meeting duly called, lay before the 
 company a statement of the income and expenditure of 
 the company for the past year, made up to a date not 
 more than three months before such annunl or general 
 meeting, and shall also lay before the conii)any such 
 further information respecting tlio company's linancial 
 position and profit and loss account as the by-laws or 
 the charter of the company may riMjuire. 
 
 7. Inspection of Books. 
 
 " Such books (a) shall during reasonable business 
 hours of every da}', except Sundays and holidays, be kept 
 open for the inspection of shareholders and creditors of 
 the company, and their personal representatives or 
 agents at the head ofiSce, and every such shareholder, 
 creditor, agent or representative, may make extracts 
 therefrom." 
 
 According to this section, now found in nearly all 
 our Joint Stock Acts, the company may itself decide the 
 hours during which those entitled to do so may inspect 
 the books specified therein, and take extracts therefrom, 
 provided they be not limited to less than two hours per 
 day. 
 
 In the United States the same general rule holds 
 good, viz., that a stockholder in any Joint Stock corpora- 
 tion- is entitled, during the usual hours of business, not 
 only to inspect the books but to take extracts therefrom ; 
 nor can the directors by resolution exclude one of the 
 members from such inspection, although they believe 
 him to be hostile to the interests of the institution. 
 
 " But with respect to a mere stranger unconnected 
 in interest, such books are to be considered as the books 
 of a private individual, and no inspection can be com- 
 pelled." And in Williams against College, etc.. Road 
 Co. (/>) it was said that a demand for an opportunity to 
 
 (a) These books are those numbered from 1 to 6 inclusive only. 
 
 (b) 45 Ind. 170 Su. Ct. 1873. 
 
"1 
 
 AUDITORS. 
 
 67 
 
 I 
 
 inspect the stock book must be accompanied b}' a notice 
 tliat the person making the demand is entitled to an 
 inspection, in order to warr nt him in sning for a re- 
 fusal. In a rercnt case (a) it was lield that the corpora- 
 tion was compellable b.y mandamus to allow an inspec- 
 tion' by the stockholder's agent as well as by himself. 
 
 8. AUDITOUS. 
 
 In companies having a large number of sliarehold- 
 ers it would be impossible for each shareholder to jx'r- 
 sonally examine the accounts and books of the company 
 and satisfy himself that they were correct. Agents or 
 representatives are, therefore, either a])pointed or elected 
 annually, to ascertain that the moneys have been ac- 
 counted for, that the expenditures were warranted, that 
 the unexpended portion of the funds is invested as stated 
 in the accounts, and that these accounts are correct, and 
 that the statement of assets and liabilities indicates the 
 true position of the company. This agent or representa- 
 tive of the shareliolders is called the auditor, and in a 
 treatise for joint stock companies it is not inappropriate 
 to point out the duties and responsibilities of those who 
 have to investigate the books and affairs of a company 
 before the statements prepared by the officers are pre- 
 sented to the shareholders for their approval. 
 
 1. Dutiesof an Auditor. — The duties of an auditor 
 are onerous, responsible, and sometimes disagreeable. 
 He may differ with the directors as to the proper manner 
 of stating certain accounts, or he may be charged by 
 them with interfering with what they may consider their 
 particular duties; but if he is satisfied liis suggestions 
 would be beneficial to the company he should endeavour 
 to have them carried out. Usually, however, he will 
 find the directors prepared to give him every informa- 
 tion and facilitate as far as possible the prosecution of 
 his audit. 
 
 If, however, false accounts have been prepared, the 
 
 (a) State v. Bienville Oil Works, 28 La. Ann. 204. 
 
68 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 auditor has a very unpleasant and difficult task. Ob- 
 stacles are thrown in his way, and every means possible 
 adopted to prevent the discovery of tlie fraud. Under 
 such annoying circumstances the auditor should be firm; 
 he should require satisfactory explanation of every ob- 
 jectionable item, and only after corrections necessary to 
 make the accounts absolutely and entirely .accurate are 
 made should he affix his certificate to them. 
 
 In a recent English case (a), Lopes, L.J., gives the 
 
 following definition of the duties of an auditor: — 
 
 " It is the duty of an auditor to bring to bear on the wor!i -"e has to 
 perform that skill, care and caution which a reasonably competent, care- 
 ful and cautious auditor would use. What is reasonable skill, care and 
 caution must depend upon the particular circumstances of each case. 
 An auditor is not bound to be a detective, or, as was said, to approach his 
 work with suspicion, or with a foregone conclusion that there is something 
 wrong. He is a watch dog, not a bloodhound. He is justified in believ- 
 ing tried servants of the company in whom confidence is placed by the 
 company, He is entitled to assume that they are honest, and to rely 
 upon their representations provided he takes reasonable care. If there 
 is anything calculated to excite suspicion, he should probe it to the 
 bottom ; but, in the absence of anything of that kind, he is only bound to 
 
 be reasonably cautious and careful It is not the duty of an 
 
 auditor to take stock ; he is not a stock expert ; there are many 
 matters in which he must rely on the honesty and accuracy of others. 
 He does not guarantee the discovery of all fraud." 
 
 In another English case, cited in the law reports 
 as the Leeds Estate, Building and Investment Co. against 
 Shepherd (h), the defendant-auditor contended that his 
 only duty was to see that the balance sheet represented 
 and was a true result of what appeared in the books of 
 the company; that behind the books he could not go, and 
 that when he found in the books that debts were due to 
 the company, all he could or was bound to do, was to 
 ask the directors and manager whether they were good 
 debts. These ideas of the duty of an auditor were very 
 emphatically condemned by the Court; and the auditor 
 who propounded them was adjudged to be financially 
 responsible to the creditors of the company for his mis- 
 interpretation of the law, and for his consequent neglect 
 
 (rt) Kingston Cotton Mill Co. No. 2, (1896) 2 Ch. 288, 289. 
 
 (b) 36 Chan. D. 787. 
 
AUDITORS. 
 
 59 
 
 to perform the duties he had undertaken; the learned 
 Judge stating in his finding: " It appears from his own 
 evidence that the duties of the auditor were not in re- 
 ality discharged by him." In giving judgment the learned 
 Judge thus defined the duties of the auditor of a com- 
 pany: 
 
 " It was, in my opinion, the duty of the auditor not to confine himself 
 merely to the task of verifying the arithmetical accuracy of the balance 
 sheet, but to inquire into its substantial accuracy ; and to ascertain that 
 it contained the particulars specified in the articles of the association, 
 and consequently a proper income and expenditure account, and was 
 properly drawn up, so as to contain a true and correct representation of 
 the state of the company's affairs." 
 
 2. First, how appointed. — The first auditors are ap- 
 pt 'nted usually by the directors, or they may be ap- 
 pointed by resolution of the shareholders. They hold 
 office for a year and are eligible for re-election. 
 
 3. Qualifications of. — It is desirable that the auditor 
 should be familiar with the Acts under which the com- 
 pany, of which he is the auditor, is incorporated, and 
 special attention should be given to those sections re- 
 lating to the Books, Accounts, and Annual Statements, 
 and to the appointment and duties of the Auditor. Of 
 course, the initial qualification of every auditor is a 
 thorough knowledge of the theory and practice of com- 
 mercial bookkeeping. So much depends upon the skill 
 and judgmert of an auditor in the infinite variety of cir- 
 cumstances ^,ith which he will be confronted, and there 
 are so frequently occasions when he may be called upon 
 to demonstrate his views, that a. special training for such 
 duties will be found invaluable. In a work of this 
 nature no exhaustive treatment of the subject would be 
 possible, and therefore only general principles are stated. 
 There are, however, standard publications and works of 
 reference easily procurable, which should form a part of 
 the equipment of every auditor. 
 
 4. Commencement of audit. — Before entering upon his 
 first audit it would be convenient for him to have a list 
 of all books kept by the company, both financial and of 
 
60 
 
 SHAUEHOLDEUS AN'I) DIUECTOIIS' MANTAL. 
 
 record, and tht' Ontario Act directs that siicli a list must 
 be delivered to him. 
 
 At Ihe fiiht audit of the account h of ai company, the 
 share capital should be invest ipated, and the auditor 
 should ascertain that the shares issued are not in excess 
 of the amounts authori/.ed bj the charter or the private 
 Act by which the company has been iiicoritorated. 
 
 The Ajjplicafions for Shares and Letters of Allot- 
 ment should be che(k<'d against the amounts shown in 
 the cash book as havinji: been received on Capital Ac- 
 count, and it should be ascertained that these amounts 
 appear among the l!.a])ilities to shareholders in the Bal- 
 ance Sheet. 
 
 Sometimes in small companies the prospectus directs 
 that the payments on application for shares are to be 
 sent to the oflice of the company instead of to its bank. 
 The auditor should then be particularly careful to ascer- 
 tain that they have been proju'rly accounted for. The 
 Stock Ledger, the Transfer liook, the stubs in the Instal- 
 ment Scrip and Stock Certificate Books should be ex- 
 amined. The auditor should also ascertain that all mort- 
 gages, or bonds issued of the nature of a mortgage, are 
 duly recorded. Having satisfied himself as regards the 
 share cajjital, he ma^' then turn his attention to the Cash 
 Book. 
 
 5. Tlie cdsh hook. — The debit or income side should 
 be checked with the most independent source the auditor 
 can find available, for example, the Counterfoils of Re- 
 ceipt Books, Collectors' Books, the Counter Cash Book, 
 etc., etc. 
 
 The charges on the credit side of the Cash Book 
 should be checked with the vouchers for their payment. 
 
 G. Vouchers. — The auditor will find it greatly facili- 
 tate his work if lie makes it a rule not to accept any 
 vouchers or other papers intended for his inspection 
 which are not properly arranged beforehand. It some- 
 times happens, that on the auditor asking for the vouch- 
 ers for the cash payments, he is handed a bundle of 
 receipted accounts, and on attempting to check them 
 
Al'DITons. 
 
 61 
 
 with tlio Casli Book he nsccitjiliiK tluU many nre iniHsin^. 
 Much time \h in eonseipience h)Ht in h)olvinj; for theHC, or 
 in obtainin}^ (lui>li('at<'s, wliilo if llu' voucliers were i»re- 
 vionsly arranj^cd. miHsin;^ ones woiihl he found, or fresli 
 ones obtained before llie fommen'(<'ment of tlie audit. 
 
 A voucher, to be acceptable to an auditor, should not 
 only be an acknowledgement of money i>aid, but there 
 should be the ])roper authority for the i)aynu'ut, which 
 is usually the vote of the directors. Of course certain 
 payments must e at the discretion of the cashier, man- 
 ager, etc., as for instance frcif^ht charjjes, duties, etc. A 
 che(]ue jiayable to order and endorsed by the payee is 
 evident-e of jtayment to him, or a written receipt is evi- 
 dence of payment; but neither of these should suffice an 
 auditor unless he has seen the proper record of the au- 
 thorization. Auditors should place their initials upon 
 all vouchers and papers submitted to them. This will 
 prevent a dishonest man from usin<jj them ajjain. In 
 larj^e companies where nuiny iiundreds of voucliers have 
 to be checked, a rubber stamp with the word " audited " 
 thereon is often used. The auditor should satisfy him- 
 self that the expenditure has been charged against the 
 proper accountis. The balance, as fihown in the Cash 
 Book, should be checked with the balance in the Bank 
 Pass Book. 
 
 7. ReconcilUitlon Staiemeiii. — Where these do not 
 agree, a Reconciliation Statement, which may be entered 
 in the Cash Book, should be prepared for the auditor. 
 This should commence with the balance as shown in the 
 Cash Book, to which should be added the amounts of the 
 cheques outstanding. From the total thus obtained 
 should be deducted the amount of the cheques and de- 
 posits, if any, paid into the bank, not given credit for in 
 the Pass Book, and the result should be a balance iden- 
 tical with that shown in the Pass Book. The auditor 
 should ascertain at the bank if the book shown be the 
 actual document. 
 
 8. Cash in Hand. — Under the heading "Cash in 
 Hand," should be stated the amount of the balance of 
 
1 11 
 
 62 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 f:; M 
 
 • 
 
 the Petty Cash Book not accounted for by any expendi- 
 ture, and which should, therefore, be in possession 
 of the cashier. As the Auditor seldom commences his 
 duties before at least several days have elapsed after 
 the date on which the books are closed he can only check 
 the correctness of this balance by ascartaining that the 
 cashier has in hand the amount unaccounted for by him 
 in the Petty Cash Book at some subsequent date. 
 
 It is the custom in many oifices to require the cashier 
 to pay into the bank on the day on which the books are 
 closed the balance of cash in his hands. This not only 
 proves that the cashier has the money in his possession, 
 but also spares the auditor a somewhat disagreeable 
 duty. 
 
 When a company has been formed for the purpose 
 of acquiring and carrying on an established business, 
 the consideration may be either money, shares (fully paid 
 or otberwise) or partly money and partly shares. In 
 any case the consideration can only be entered in the 
 Books of Accounts as if it were paid for in cash, under 
 some appropriate heading, such as " Purchase of Busi- 
 ness," etc. 
 
 9. Other Books.— After the Cash Book has been 
 finished, the Day Book and Journal entries should be 
 compared and verified. Then the Ledger entries should 
 be carefully checked with the books from which they are 
 brought. 
 
 In regard to the liabilities in respect of purchases, 
 the posting in the Ledger should be checked through the 
 subsidiary books, so as. to ascertain that the balances 
 representing the accounts unpaid at the date at which 
 the books are closed are all brought to the debit side of 
 the balance sheet. 
 
 10. Thf, Balance Sheet. — The balance sheet i^ the 
 most important statement laid before tbe shareholders, 
 as, if properly drawn up, it shows the exact financial 
 position of the company. 
 
 '*.'-l 
 
i 
 
 BALANCE SHEET. 
 
 63 
 
 On one side are placed the liabilities, not only to the 
 creditors, but also to the Partners or Shareholders them- 
 selves, while on the other side are enumerated the assets 
 and the property of the company'. 
 
 Before giving his certificate to the correctness of 
 this statement, the auditor must examine in detail, each 
 item on both sides, and satisfy himself that the liabili- 
 ties have not been understated, nor the assets over- 
 estimated, as, without intending to deceive the share- 
 holders, or to act in any way dishonestly, it is quite pos- 
 sible for the directors and officials of a company to pre- 
 sent the Balance Sheet in a more favorable light than is 
 warranted by the facts. 
 
 The liabilities as shown in a company's Balance 
 Sheet may be classed under two heads: 
 
 (1) Liabilities to the Shareholders. 
 
 (2) Liabilities to the Public. 
 
 The former coisists of the capital represented by 
 shares. The detj.ils showing the particulars of the capi- 
 tal should be clearly stated, and when it is divided into 
 more than one class of shares this should be shown. 
 
 Any sums paid in advance of calls shoulc' p'so be 
 stated. 
 
 The amount representing the Shareholders' Capital 
 as before stated requires investigation. The capital paid 
 in money will, of course, be standing at the credit of the 
 Ledger Account posted from the Cash Book, but it must 
 not be taken as necessarily correct by the auditor and 
 passed without inquiry. 
 
 Sums due on mortgages and debentures, if any, 
 should be kept distinct from the sums due to ordinary 
 creditors. 
 
 Under " Sundry Creditors," or some similar heading, 
 should be included all the sums due to those creditors 
 of the company who are ^ot mortgagees oi debenture 
 holder's, and who do not hold security for payment of 
 the same. 
 
64 
 
 SHAUEHOLDEUS AND DIUECTCJUS MANUAL. 
 
 ' 
 
 The .iiitlitor should then inspect the securities re- 
 pr'sentiu}^ the assets, and ascertain that they are in the 
 possession of the company, free and uucmumbered by 
 mortgajjfes or any charges, unless their being so is clearly 
 stated in the audit. 
 
 11. Audit should he thorough. — A thorough and effi- 
 cient audit should embrace an examination of all the 
 transiictions of a company, and an auditor acting on this 
 principle would ascertain that all had been diJ.y entered 
 and discharged. A purchase made, a sale effected, or any 
 matter of business transacted, and once entered in one 
 of tlu.' subsidiary books, becomes part of a system with 
 which it is so incori»orated, that it cannot be omitted, 
 overlooked or cancelled without so disarranging the 
 organization that an efficient auditor would at once 
 detect either the carelessness or the fraud. 
 
 12. Position of Auditor when accounts incorrect. — 
 Where from any cause an auditor cannot certify to 
 the accounts he has audited, and differences have arisen 
 between the directors and himself which he has been 
 unable to remove, his best plan under these circum- 
 stances is to address to the members a full report on the 
 accounts, setting forth clearly therein the points at issue 
 between the directors and himself, and then sign the ac- 
 counts as auditor in the usual manner, subject to this 
 report. 
 
 13. Suggestion of better methods. — An auditor should 
 be able not only to check and verify the accounts placed 
 before him, but a^so, if he finds the books are kept in a 
 careless manner or on a bad system, be able to suggest 
 a better method, the adoption of which mignt not only 
 save expense, but also ensure greater accuracy in record 
 ing the transactions of the com]»any. In his anxiety to 
 do his duty towards the shareholders, the auaitor should 
 be careful not to interfere in the management of the 
 com])any by insisting on the adoption of any changes 
 in the system of bookkeeping, the running of the office, 
 
BY-LAWS, ETC. 
 
 65 
 
 lid 
 
 ■d 
 
 a 
 
 1st 
 
 ly 
 
 Id 
 
 to 
 lid 
 
 or in any other matter. He should endeavour to intro- 
 duce his reforms by friendly suggestions, and by putting 
 them forward gradually. The principal duty of the 
 auditor is to ascertain that the accounts, as presented to 
 the shareholders, show accurately the state of the com- 
 pany's afl'airs, and by performing this duty conscienti- 
 ously and efficiently, he can best serve tlui interests of 
 the shareholders whose servant he is. 
 
 9. Method of J)|{akting, Signing and S'm.ing Coui'o- 
 RATE J)eed or Contract. 
 
 A deed or contrac't of a corporation should be drawn 
 so that the name of the corporation appears in the body 
 of the instrument, and not the name of the offlcer or 
 agent who signs, seals or acknowledges it. Tlie name of 
 the corporation should be signed to the instrument, and 
 then should follow the word " by " and the name of the 
 officer or jierson who makes the signature. 
 
 10. Necessity of Seal. 
 
 The old idea of the necessity of evidencing every 
 ai)pointment of a servant or agent, or every contract into 
 which a company enters by instrument under seal, has 
 long been departed from, and the departure is recogniz-ed 
 and ratified by law in all cases where the inconvenience 
 of so doing amounts to a practical necessity. Indeed, so 
 far from requiring every such appointment, authority, or 
 contract to be under seal at the present day, the rule is, 
 that in a large number of cases such appointments are 
 made without any writing at all. This does not apply 
 however to municipal corporations. 
 
 11. Seal. 
 
 The Courts will hold any device or form to be the 
 corjtorate seal if there was an intent to bind the corpora- 
 tion and a seal of some kind was used. 
 
 It is no longer necessary that the impression of a 
 corporate seal shall be nuHle upon wax or other adhesive 
 substance — an impression upon the paper itself being 
 w.s.n.M. — 5 
 
< i 
 
 nil 
 
 66 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 held sufficient. It is not necessary that express authority, 
 or authority under seal, be given to an officer or agent to 
 affix the corporate seal to an instrument; such powers 
 may be inferred from the general powers of the officer or 
 agent, the usual course of business and similar circum- 
 stances. 
 
 The mere affixing of the corporate seal is of itself 
 sufficient execution of a contract or deed, when properly 
 affixed by a person duly authorized, and no signature at 
 all need be made or used, but such signature is always 
 advisable. 
 
 If an instrument or contract appears to be signed by 
 the proper officer and the corporate seal appears to be 
 affixed, the courts will presume that the seal is the cor- 
 porate seal and was affixed by proper authority, when 
 proof is given that the officer signed and sealed th^ in- 
 strument; but this presumption may be overthrown by 
 proof that the seal was affixed without proper authority. 
 The corporation, by ratification and otherwise, may easily 
 cure a defect as to the sealing. A defo< ' in the acknow- 
 ledgment or attestation is overlooked the courts if 
 there is sufficient to indicate the intent lo acknowledge. 
 
 12. Corporate Instruments Made in the Name of 
 AN Officer or Agent Instead of in the Name of 
 THE Corporation may be Enforced by or Against 
 the Corporation. 
 
 This is now the well established rule. 
 
 3 
 ■s 
 
 I 
 
CHAPTER VI. 
 
 STOCK. CALLS, ETC. 
 
 1. Definition of Capital 
 
 Stock; of Corpora- 
 tor, Subscriber, 
 Shareholder and 
 Stockholder; of 
 Share of Stock; of 
 Debenture. 
 
 2. Price of Shares. 
 
 3. Classes of Stock, Com- 
 
 mon AND Preferred ; 
 Deferred; Over- 
 issued; Watered or 
 Fictitious. 
 
 4. Methods of Issuing 
 
 Watered or Ficti- 
 tious Stock. 
 
 1. Opinions as to Wa- 
 
 tered Stock. 
 
 2. Is Fictitious Paid- 
 
 up Stock Void. 
 
 3. EXPUESSLY FoKniDDEN 
 
 BY QcEiiEc Act. 
 
 4. Stockholders May 
 
 Complain of Issue 
 
 OF. 
 
 5. Certificate of Shares. 
 
 6. Company Should Re- 
 
 quire Surrender of 
 the Outstanding 
 Certificate. 
 
 7. Alleged Loss of the 
 
 Old Certificate. 
 
 Allotment of Stock. 
 
 Methods of Issuing 
 Stock. 
 
 Preferential Stock. 
 
 When Shares are not 
 Paid in Cash. 
 
 Paid-up Shares. 
 
 Right of Transfer of 
 Shares. 
 
 Precautions Respect- 
 ing Transfers of 
 Shares. 
 
 8. 
 9. 
 
 10. 
 11. 
 
 12. 
 13. 
 
 14. 
 
 15. 
 
 16. 
 
 17. 
 
 18. 
 
 19. 
 
 20. 
 
 21. 
 22. 
 
 23. 
 
 24. 
 
 25. 
 26. 
 27. 
 
 28. 
 
 29. 
 
 Transferor Must 
 have Paid Calls. 
 
 Registry of Transfer, 
 HOW made. 
 
 Definitions of Pledge, 
 Mortgage and Lien. 
 
 Pledge of Stock, how 
 
 MADE. 
 
 Liability of Members 
 on Stock. 
 
 How Liability may be 
 Incurred. 
 
 How Repudiated. 
 
 The Liability of an 
 Agent as Transfer- 
 or OR Transferee. 
 
 Liability, how Termin- 
 ated : BY Payment in 
 Full ; by Surrender 
 OF Shares; by bona 
 fide Sale. 
 
 The Various Remedies 
 FOR Non-payment of 
 Shares. 
 
 Forfeiture of Shares. 
 
 Notice in Case of. 
 
 Tender by Stock- 
 holder before For- 
 feiture. 
 
 Improper Cancella- 
 tion of Stock. 
 
 Calls. 
 1. 
 
 2. 
 3. 
 4. 
 
 0. 
 7. 
 8. 
 
 9. 
 
 Meanino OF Term. 
 What are. 
 
 How MADE. 
 
 Call is Generally 
 Neckssary. 
 
 When a Call is Un- 
 necessary. 
 
 Notice of Call. 
 
 Interest ON Arrears. 
 
 Calls most be Impar- 
 tial AND Uniform. 
 
 When no Call has 
 been made. 
 
68 
 
 shareholders' and directors' manual. 
 
 1 in ' ' 
 
 1. Definition of Capital Stock; of Corporator, Sub- 
 scRiHER, Shareholder and Stockholder ; of Share 
 of Stock ; of Dkrenture. 
 
 Capital Stock is the .sum fixed by the charter or in- 
 strument of incorporation as the amount paid in, or to bo 
 paid in, by the stockholders for the prosecution of the 
 business of the corporation and for the benefit of cor- 
 porate creditors. 
 
 A Corporator is one of those to whom a charter is 
 granted, or of those who file a certificate of incorporation 
 under a general incoi'ijorating statute. A Subscriber is 
 one wlio has agreed to take stock from the corporation 
 on the original issue of such stock. A Shareholder in 
 this country means the same thing as a stockholder, and 
 the terms are used interchangeably to indicate one who 
 owns stock in a corporation and has been accepted as a 
 stockholder by the corporation. 
 
 A Share of stock may be defined as a right which its 
 owner has in the management, profits and ultimate 
 assets of the corporation. It is said that " the right 
 which a shareholder in a corporation has, by reason of 
 his ownership of shares, is a right to meet at stockhold- 
 ers' meetings, to require that the corporate property 
 shall not be diverted from the original purpose, to par- 
 ticipate according to the amount of his stock in the 
 surplus profits of the corporation on a division, and 
 ultimately on its dissolution, in the assets remaining 
 after payment of debts." 
 
 A Debenture is a written acknowledgment of debt, 
 and is generally made by an issue of a certain number 
 of Bonds for fixed amounts, such as !|100, |500, |1,000; 
 it is payable at the end of a fixed term, and has attached 
 to it a number of coupons for the payment of the inter- 
 est. The debentures are generally secured by a mort- 
 gage or pledge of a certain portion or all of the assets of 
 the company, the mortgage being made to Trustees and 
 containing provisions for the collection of the debt and 
 protection of the debenUire holders in case default is 
 
 I 
 
\i 
 
 STOCK, CALLS, ETC. 
 
 69 
 
 ter- 
 ort- 
 of 
 and 
 nd 
 is 
 
 made by tlio corporation in the payment of the deben- 
 ture or of the interest tliereon. 
 
 The Debentures are payable to bearer, but provision 
 is generally made for registration, whereby the negotia- 
 bility of the debenture may be restricted at the wish of 
 the holder thereof. ' 
 
 2. Price of Shares (a). 
 
 "Whether a company's shares are being sold at par, 
 that is the full value, at a premium, or at a discount, 
 they are always at par in the company's books, and on 
 the par value the dividend is paid. The first ishue of 
 shares at the inception of a company, except possibly 
 a mining company, will always be at par; subsequent 
 issues may be offered at a premium if the old stock is 
 above par in the market. After the stock authorized by 
 the charter has been taken by subsciibers, a company's 
 shares are no longer within its own control. It has none 
 to sell, and their real value will be the investing public's 
 estimation of them, based upon the cfliciency of the com- 
 pany's management, the past earnings, and an esti- 
 mate of its powers in that direction in the future. If 
 you desire to buy stock in a company wliose shares have 
 all been taken up, you must find some holder willing to 
 sell, either by your own seeking or the employment of a 
 stock broker. What you pay for your shares is a private 
 bargain between yourself and the holder, with which 
 the company cannot interfere. If the company whose 
 shares you buy is a large and important concern, like 
 a loan company' or a bank, the stock will be quoted on 
 the Stock Exchange, and you will be guided in your 
 purchase by the latest (juotations. 
 
 3. Classes of Stock. 
 
 The capital stock of a corporation may be either 
 common or preferred. By Common Stock is meant that 
 stock which entitles the owners of it to a ^wo rata divi- 
 sion of profits, if any there be; one shareholder or class 
 of shareholders having no advantage, priority or prefer- 
 ence over any other shareholder or class of shareholders 
 (rt) Johnsons Joint Stock Conipanj' IJook-keeping. 
 
i 
 
 ii 111 
 
 70 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 in the divisiou. By T>refGrred Stock is meant stock 
 which entitles its owners to dividends out of the net 
 profits before or in preference to tlie holders of the com- 
 mon stock. Common Stock entitles the owner to a pro 
 rata share of dividends equally with all other holders 
 of the stoclv except preferred stockholders; while Pre- 
 ferred Stock entitles the owner to a priority in divi- 
 dends. 
 
 By Deferred Stock or bonds is meant Stock or 
 Bonds, the payment of di\idends or iyiterest upon which 
 is expressly postponed until some other class of share- 
 holders are paid a, dividend, or until some certain obliga- 
 tion or liability of the corporation is satislied. 
 
 By Over-issued or Spurious Stock is meant stock 
 issued in excess of the full amount of capital stock 
 authorized by the charter of the corporation. Such 
 siock in void even though issued in good faith. 
 
 By Watered or Fictitious Stock, is meant stock 
 which is issued as fully paid up, when, in fact, the whole 
 amount of the par value thereof has not been paid in. 
 If any amount less than the whole face value of the 
 stock has not been paid, and the stock has been issued 
 as full paid, then the stock is watered to the extent of 
 the deficit. Watered stock is, accordingly, stock which 
 pui'ports to represent, but does not represent, in good 
 faith, money paid in to the treasury of the company, or 
 money's worth actually contributed to the working 
 capital of the concern. The issue of such stock may be 
 lawful, but it is generally in fraud of the rights of some 
 interested party, as r.</. creditors of the corporation, 
 certain shareholders or classes of shareholders, or the 
 public. 
 
 4. Methods of Issuing Watered or Fictitious 
 
 Stock. 
 
 There are three different ways in which watered 
 stock m/ay be and is issued. 
 
 First: By discount in cash. Second: By taking 
 property at an overvaluation. Third: By means of an 
 invalid stock dividend. 
 
 I 
 
STOCK, CALLS, ETC. 
 
 71 
 
 ked 
 an 
 
 An issue of p.iitl-up stock for cash, upon payment of 
 only part of the par value of the stocJ^, is not often 
 made, inasmuch as the real nature of the transaction is 
 readily discovered an<l easily remedied. 
 
 A second method of issuing stock as paid up when 
 it is not actually jiaid up, is by its issue for property 
 taken at an overvaluation. This method is the most 
 fre<iuently employed, the most ditlicnlt to prove, and the 
 least easy to remedy. 
 
 The third method of issuing tictitiously paid-up 
 stock is by a wrongful us(? of the power to issue stock 
 dividends. It seems to be generally conceded that if the 
 capital stock and the actual property of the corporation 
 is not permanently increased to the extent of the par 
 value of the stock distributed as a dividend, then that 
 the issue of stock by such dividend is irregular, and 
 under certain circumstances fraudulent. 
 
 1. There are various opinions as to the character 
 of stock issued as paid up, when in fact it has not been 
 I)aid for. The customary expression is that such an 
 issue is a fraud upon the law and the stockholders; or 
 that it is against public policy; or is a fraud on subse- 
 quent purchasers of the stock so issued. Other cases, 
 and cases of high authority, hold that an issue of stock 
 as full-paid up stock under an agreement that the lull 
 par value shall not be paid, is not necessarily a fraudu- 
 lent transaction, but thst under an Act such as The 
 Ontario Companies' Act, the person t.aking the stock is 
 liable on it for the full amount both to the company 
 and its creditors, notwithstanding the agreement that it 
 is to be considered fully paid up, 
 
 2. Is fictitious paid-up stock void? Is stock void 
 when fictitiously issued as paid up ? It is settled that 
 it is not; and it may be stated, as a well-established rule, 
 that stock issued as paid up, when it has not been fully 
 and faii'ly i>aid up, is not absolutely void, unless it is 
 declared to be void by constitutional or statutory pro- 
 visions, but may involve the parties concerned in serious 
 liabilities. . 
 
 I 
 
1 
 
 i 
 
 i 
 
 ■'J 
 
 1.1 
 
 72 
 
 SHAUEiroLDEHS AND DIHECTOHS MANUAL. 
 
 .*?. The Doniinion Act declares tbat " No bylaw for 
 the allotment or sale of stock at any ^jreater discount 
 or at any less premium than what has been previously 
 authorized at a jjeneral meeting * * shall be valid 
 or acted ujton until the same has been conllrmed at a 
 }j;eneral meeting." This provision is now omitted from 
 the Ontario Comi)anie8' Act, while the (Quebec Act ex- 
 pressly forbids " the practice, commonly known as water- 
 ing of stock," and provides " that all stock so issued 
 shall be null and void." It further recites that ''Every 
 form and manner of lictitious capitalization of stock in 
 any Joint Stock ('ompany, or the issuing of stock which 
 is not represented by a legitimate and necessary expen- 
 diture in the interest of such company, and iiot repre- 
 sented by an- amount in cash paid into the treasury of 
 the company, which has been expended for the promo- 
 tion of the objects of the company, is prohibited, and 
 all such stock shall be null and void." 
 
 •4. Stockholders, being such when an issue of paid- 
 up stock is improperly made, and not assenting to or 
 acquiescing in it, may bring suit in a court of equity to 
 annul and set aside the whole transaction. The dissent- 
 ing stockholders' rights and remedies herein, in their 
 scope and details, are similar to the rights and remedies 
 of stockholders in other cases of ultra vires acts or fraud 
 to the injury of the company. 
 
 5. Certificate of Shares. 
 
 A certificate of shares is from one point of view a 
 mere muniment of title, like a title deed. It is not the 
 share itself, but evidence of the ownership of the share; 
 that is to say, it is a written acknowledgment by the 
 corporation of the interest of the shareholder in the cor- 
 porate property and franchise; it operates to transfer 
 nothing from the corporation to the shareholder, but 
 merely affords to the latter evidence of his rights. It 
 should be clearly apprehended that the certificate is not 
 the share, but merely written evidence of the ownership 
 of shares. Accordingly, it follows that shares have no 
 " ear-marks " — that one share cannot be distinguished 
 
STOCK, CAIXS, ETC. 
 
 73 
 
 r 
 
 t 
 t 
 p 
 o 
 
 from anothor Mliaro — but tlint it is only tho rortifloates 
 which ai'c (lislinjiuisliablo ono from (lie other by llicir 
 jiumbcis ami in other ways. Tho certificate, therefore, 
 lias value in itself only as evidence, and, ai)art from the 
 sliares which it represents, it is utterly worthless. And 
 even as evidence it is not in every case essentia'.; it is 
 merely a convenient voudier, which the shareholder 
 should be entitled to receive if he asks for it. Onv ele- 
 ment of its value to the shareholder is that it is prima 
 facie evidence of his title. 
 
 The rif^ht of every shareholder to demand and re- 
 ceive from the company a certificate is generally con- 
 ceded. \\'h(ni certificates are executed by a part only 
 of the ofUcers required by law to sign them, they may 
 be void, lint a cei-tificate issued to an oilicer of the cor- 
 poration who is a shareholder, although the certificate 
 is signed by that o<licer, is valid. It is not, however, 
 essential to the existence of the corporation that cer- 
 tificates of stock shall be issued. Without a certificate 
 the shareholder has a complete power to transfer his 
 stock, to receive dividends, and to vote, and he is indi- 
 vidually liable as a stockholder. 
 
 A certificate of slock may be the subject of a legacy, 
 a contract of sale, a pledge, or a gift. In New York 
 making out and mailing the certificates has been held 
 to constitute a due issuing thereof. And in Maryland, 
 the stub of a book from which certificates have been 
 detached is evidence of their regular issue. 
 
 6. Company Should Requihe a Suiiulndeh of the 
 Outstanding Cekiificate. 
 
 If a company permits a registry of a transfer of 
 stock, and issues new certificates to the transferor 
 without requiring a surrender of the old certificate, it 
 assumes a dangerous position, and one which it is not 
 obliged to assume. If the certificate which is not 
 delivered up is in the hands of a honajide purchaser for 
 value without notice, he may hold the corporation liable 
 for allowing a registry of trans':^r to another without 
 requiring a delivery of the certificates. It is negligence 
 
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 SHAREHOLDERS AND DIRECTORS* MANUAL. 
 
 ! I 
 
 llii 
 
 and a breach of duty on the part of the company to 
 allow a registry without a surrender of the old cer- 
 tificate. It generally refuses to do so, as is its duty, 
 and is sustained by the law in its refusal. There are 
 occasions, however, where the law compels the company 
 to register the transfer without a surrender of the old 
 certificate. When so compelled, the company cannot be 
 held liable by the purchaser of the outstanding cer- 
 tificate, but he must seek his remedy against others. 
 Such compulsory registry, excusing the company, may 
 exist in cases of alleged loss of the old certificate, a 
 decree of a court compelling the registry, and, under the 
 latter, an attachment or execution against the stock. 
 
 ■ 7. Alleged Loss of the Old Certificate. 
 
 According to the rule of nearly all the States a cor- 
 poration is not obliged to issue a new certificate of stock 
 to the owner of an old one, which he alleges he has lost, 
 unless such person gives to the corporation a suflScient 
 bond of indemnity to protect it against liability in case it 
 turns out that the old certificate was not lost, but was 
 sold and passed into honajide hands. 
 
 8. Allotment of Stock. 
 
 A common method (and, indeed, the almost uni- 
 versal method in this country) of " taking shares " is by 
 subscription of the company's stock-book or memo- 
 randum of agreement, which will bind the persons sub- 
 scribing, to take from the company as many shares as 
 they have subscribed for, whether or not the shares are 
 actually allotted to them. 
 
 Another method is by letter of application for so 
 many shares, which, however, must be accepted before 
 the applicant is bound. And this acceptance is not 
 complete by the mere entry of the applicant's name in 
 the share-book as the owner of a certain number of 
 shares, but the acceptance must be communicated to the 
 applicant, in order to create a contract binding on him. 
 The question is determined on the well-established prin- 
 ciples which govern ordinary contracts. 
 
STOCK, CALLS, ETC. 
 
 75 
 
 9. Methods of Issuing Stock. 
 
 There are in general three methods of issuing stock. 
 It may be issued, first, by means of subscriptions^ pay- 
 able in cash, the subscription being made in writing, or 
 by acts equivalent thereto. Second, the issue may be 
 by means of subscriptions, payable in labor, property, 
 or both. Third, the issue may be by a stock dividend. 
 
 First method: Issue by money subscription. An 
 issue of stock by means of a subscription, payable in 
 cash, is the most honest and safe method of issuing 
 stock. In the absence of any agreement to the contrary, 
 an ordinary subscription for stock is deemed a cash sub- 
 scription, and payment in money may be enforced. The 
 subscription contract is generally made by a writing 
 duly signed by the subscriber. , 
 
 Second method: Issue for property, labor or con- 
 struction work. The issue of stock for labor, property, 
 contract work, or any valuable consideration other than 
 money, has given rise to much controversy and litiga- 
 tion. In England a long line of decisions, under the 
 Companies' Acts, has established the principle that stock 
 need not necessarily be paid for in cash, but that it may 
 be paid for in money's worth. If the property is taken 
 at a valuation made without fraud, the payment is as 
 effectual and valid as though made in cash to the same 
 amount. 
 
 Performance of contract of payment in property. 
 Subscriptions payable in property are not subject to 
 cal!s, and a demand for the property must be made by 
 the corpu.ation. Upon failure of the subscriber to fur- 
 nish the property, or upon insolvency of the corporation, 
 such subscriptions become payable in cash. A payment 
 of part of the subscription in cash does not waive the 
 right of the subscriber to pay the balance in property. 
 The stock may be issued to a contractor before his work 
 in payment therefor has been completed. All the pro- 
 visions of the law must be strictly complied with. 
 
 Thii ^ method of issue: By stock dividend. The 
 third method of issuing stock is by a stock dividend. It 
 
76 
 
 SHAHEH()Lr)?:US' AND DIRECTORS' MANUAL. 
 
 is allowabk when an amount of cash or property equal 
 to the amount of the par value of the stock so divided 
 is added permanently to the capital stock of the cor- 
 poration. A stock dividend can be made only when the 
 whole of the cajutal stock has not been issued, or when 
 it may be increased. The company can never increase 
 the capital stock beyond the amount limited by legis- 
 lative enactment. In England it has been a question of 
 doubt wiiether stockholders can be compelled to accept 
 a dividend of stock. 
 
 10 Preferential Stock. 
 
 The various Joint Stock Acts give companies power 
 to issue preferential stock, and the following case arose 
 under cap. 150, K. S. O. 1877. 
 
 The defendants, a company incorporated under the 
 Ontario Joint Stock Companies' Letters Patent Act, R. 
 S. O. (1877), c. 150, as amended by 41 Vict. c. 8, s. IG, 
 with a capital stock of |!300,000, in shares of |1,000 each, 
 acting under section 17a of the Act, which authorized 
 the issvie of any part of the capital stock as preference 
 shares, passed a by-law in 1877 for the issue of |75,000 
 as such preference shares, which were to have prefer- 
 ence and priority as respects dividends and otherwise as 
 therein declared, namely : 1. " The company guarantees 
 eight per cent, yearly to the extent of the preference 
 stock, up to the year 18S0, and over that amount (eight 
 per cent.) the net dividends will be divided among all 
 the shareholders pro rata." 2. "Should the holders of 
 prefereu-ce bonds so desire, the company binds itself to 
 take the stock back during the year 1880, at par, with 
 interest at eight per cent, per annum, on receiving six 
 months' notice in writing, etc." The plaintiff subscribed 
 for and w^as allotted live shares, amounting to |5,000, 
 which he paid up; but, contending that the by-law was 
 \LUra i'ire<i by reason of the above conditions, and the 
 issue of shares therefore void, brouglit an action to re- 
 cover back the money paid therefor: — Held, that the 
 first condition of the by-law was not ultra vires, as its 
 proper construction was, not that the interest was to be 
 
 . %... ^ — 
 
STOCK, CALLS, ETC. 
 
 77 
 
 paid at all events, and so possibly out of capital, but 
 only if there were profits out of which it could be paid; 
 but that the second condition was nlfra vires for that 
 the Act neither expressly nor impliedly authorized the 
 company to accept a surrender or cancel the shares, 
 repaying Ihe amount thereof: — Tleld, however, that the 
 l)laintilf could not recover, for, notwithstanding one or 
 both of the conditions were invalid, the shares* them- 
 selves were valid, there being authority to issue prefer- 
 ence shares, and the i)laintift' having subscribed for 
 preference shares, and having got them, he became .a 
 shareholder of the company (a). 
 
 11. When Shahes are not Paid in Cash, 
 
 By section 27 of the Dominion Act it is provided tliat 
 all shares shall be held to be payable in' cash, '' unless 
 otherwise determined by a contract duly made in 
 writing, and filed with the Secretary of State at or before 
 the issue of sucli shares," The Ontario Companies' Act 
 also requires that whci'e shares have been paid for by 
 transfer of i)roperty, evidence of the said transfer must 
 be furnished the Provincial Secretary. These provisions 
 have the effect of closing one avenue to fraud on the part 
 of i)romoters and directors of companies incorporated 
 thereunder. Under the former section, it is no longer 
 permissible to accept shares in a com])any in order to get 
 rid of a property acquired for the i)urpose of making n 
 large profit at the expense of the company, or in order 
 to secure the custom of the company, on the understand- 
 ing that they are to be paid for in goods as wanted. At 
 least it is only permissible to do so by a regular formal 
 contract registered with the Secretary of State, in order 
 that any one who may be interested may inquire into the 
 nature and terais of such contract, and govern them- 
 selves accordingly. The object of the provision broadly 
 stated is, to avoid bogus allotments, or, to speak more 
 accurately, to put it out of the power of persons accept- 
 ing such allotments to avoid liability by pleading an 
 
 (a) Long against. Guelph Lumber Co., 31 C. P. I'iy, C. P. D. 
 
78 
 
 SHAREHOLDEUS' AND DIRECTORS' MANUAL. 
 
 agreement between themselves and the directors, that 
 the shares so allotted we^e to be paid for otherwise than 
 in cash. On the other hand, it would necessarily be con- 
 sidered too great a restriction of the company's actions 
 and transactions to prohibit that which might be for the 
 benefit of all concerned, and to take away from it the 
 ri^ht which exists between individuals of making any 
 agreement consistent with public policy and good 
 n)orals. Thus, it might be for the interest of all parties 
 that shares should be allotted to an individual or a firm 
 in consideration that they should be paid for in a certain 
 manufacturing material, for instance, at a certain rate, 
 to be delivered from time to time as required by the 
 company. 
 
 This was the agreement in several cases recently 
 reported, and which, though regarded as perfectly right 
 and proper as between the company and the parties, was 
 held not to relieve the latter on a winding-up from 
 liabilitv in cash to the creditors for the total amount 
 unpaid on their shares. 
 
 12. Paid-up Shares. 
 
 But where no consideration passes to the company, 
 and the shares allotted purport to be paid-up shares, 
 there is of course nothing to set off, and there being no 
 contract registered, the allottee will be held liable on 
 them. Thus, in a certain case (a), two persons in July, 
 186G, signed the memorandum of association for one 
 share each at the request of the promoter, and on the 
 understanding that they should not be called upon to 
 pay anything in respect of them ; and in 1867, when they 
 were asked to pay calls, they requested the directors to 
 cancel the shares, and the directors did so. The direc- 
 tors had power under the articles to cancel shares on 
 r.on-paymenL of cills. Several years afterwards, the com- 
 pany being ordered to be wound up, the parties and their 
 executors (one of them being dead) were placed on the 
 list of cont*ibutories by the litiuidator, and on a contesta- 
 tion, the action of the liquidator was maintained. 
 (a) Esparto Trading Co., 28 W. R. 146. 
 
STOCK, CALLS, ETC. 
 
 79 
 
 And in the United States it has been held that the 
 officers of a corporation are chargeable with fraud if they 
 receive, in payment of stock, property at a valuation 
 known to be in excess of its real value, and in considera- 
 tion thereof issue paid-up certificates of stock. But if 
 the shares are transferred, and the transferee knows 
 nothing of the circumstances, the certificate of the com- 
 pany thai they are paid-uj) shares will carry him free. 
 Thus, under a contract not registered, shares in the com- 
 pany were allotted to the person with whom the company 
 made the contract, and were duly registered by the 
 company as such. The shares wore subsequently trans- 
 ferred for value as fully paid-up shares to a person who 
 had no notice of any irregularity in their issue. On the 
 winding up of the company, held, that the company was 
 estopped from denying that the shares were fully ])aid 
 uj), and that the official liquidator could not have the 
 transferee put ui)on the list of coutributories as a holder 
 of shares not fully paid up. 
 
 And in McCracken against Mclntyre, decided in the 
 Supreme Court of Canada (a), the result was the same. 
 In that case certain shares in a company incorporated by 
 letters patent issued under 27 & 28 Vict. c. 23, were 
 allotted, by a resolution passed at a special general 
 meeting of the shareholders, to themselves in i)roportion 
 to the number of shares held by them at that time, at 
 forty per cent, discount, deducted from their nominal 
 value, and scrip issued for them as fully paid up. G., 
 under this arrangement, was allotted nine shares, which 
 were subsequently assigned to the appellant for value as 
 fully paid up. Appellant enquired of the secn^tary of 
 the company, who also informed him that they were fully 
 paid-uj) shares, and he accepted them in good faith as 
 such, and about a year afterwards became a director in 
 the company. The shares appeared as fully paid up on 
 the certificates of transfer, whilst on each counterfoil in 
 the share book the amount mentioned was, — shares, 
 "£— !i?300, $600." Held, reversing the judgment of the 
 
 («) 1 Supreme Court of Canada, 479. 
 
80 
 
 SHAUEHOLDEllS AM) DIRECTORS MANUAL. 
 
 )> I 
 
 Court of Appeal for Ontario, that a person purchasing 
 shares in good faith, without notice, from an original 
 sliareliolder as shares fully paid up, is not liable to an 
 execution creditor of the company, whose execution has 
 been returned niUla bona for the amount unpaid on vhe 
 shares. But in Cricknien's '^•ase («), held, that if the 
 tranf^fereo take the shares with notice of the facts, he is 
 liable; but if he take them for value in the ordinary 
 course of business, the burden of proving that he had 
 notice will be on the person urging it against him. 
 
 13. Right ok Tuansfeu of Shakes. 
 
 The right of transferring one's share and member- 
 ship, or any portion thei'eof, to another, at will, is of the 
 essence of an incorporated company as distinguished 
 from an ordinary partnership. But this " freedom of 
 transfer " being open to abuse has, for the protection of 
 the public and the avoidance of fraud, invariably been 
 placed under special restrictions, either by law or by the 
 regulations of the company, or both. The Imperial Act, 
 18G2, leaves the matter entirely in the hands of the com- 
 l)any, merely saying, that the shares may be transferred 
 " in manner provided by the regulations of the com- 
 pany." The words " in niiinner," however, maj' be pre- 
 sumed to refer to the form of transfer. But whatever it 
 be, a form of some kind or other is recommended to be 
 signed by the parties, particularly by the purchaser. 
 
 14. Precautions Respecting! Transfer of Shares, Etc. 
 
 In considering a question of transfer, it is in all 
 cases important to notice whether the contract refers to 
 paid-up shares (on which no liability remains), or to 
 shares respecting which the holder is still liable in whole 
 or in part. For, while the transfer of paid-up shares is 
 comparatively unfettered, it is not only the right, but 
 the duty, of the directors to refuse registration of a 
 transfer of unpaid shares, where the proposed transferee 
 is a person of no apparent means, and the transfer is 
 
 (a) L. R. 10 Ch. 614. 
 
STOCK, CALLS, ETC. 
 
 81 
 
 presumably made for the purpose of avoiding liability. 
 For this i)urp()S(> Ihrn every api»lieation to rcf^Lster a 
 transfer of shares sliould be broujrlit before a regular 
 meeting of the IJoard of Directors, and granted or 
 refused by the majority in the ordinary manner, on 
 evidence of the fitness of the person projtosed as trans- 
 feree to be substituted in the place of the holder for the 
 shares mentioned. 
 
 It is evident, moreover, that the majority, or whoever 
 they are, who undertake the responsibility of consenting 
 to the transfer, may be deceived by the i)arties asking 
 for the registration; and, with the best intention in the 
 world, may order the registration of a transfer to a 
 totally irresponsible person. What would be the result 
 in such a case? The practice of the courts would have 
 to be looked to for an answer. For, although no such 
 liability is attached to the directors under the Imperial 
 Statutes, the question has frequently arisen as against 
 the transferor. The result of the decisions under those 
 Statutes is, that where the consent of the directors has 
 been obtained by misrepresentation, and the facts were 
 such, that had they known them they would have refused 
 the transfer, the transfer will be set aside and the trans- 
 feror still held liable. 
 
 In in ?'ethe European Arbitration (a leading case), it 
 was held that if the transferor, without having made 
 any misrepresentation, kmnv in fact that his proposed 
 transferee was not a proper and solvent person, then the 
 transfer would be set aside and the transferor rendered 
 liable (a). 
 
 In this case Lord Westbury said very forcibly: — " I 
 do not care a rush whether the directors inquired or not, 
 or whether there was misrepresentation or not: but if I 
 find the man who desires to dispose of his shares in favi-r 
 of A. B. knows very well in his mind at that time that 
 A. B. was an insolvent man, or a dishonest man, or an 
 improper man, to introduce into the partnership, I shall 
 
 - {a Bnckley, 3rd ed., pp. 20-26 ; and Healey, p. 54. 
 
 W.fi.D.M.— 6 
 
82 
 
 shareholders' and directors' manual. 
 
 hold that the iKTsonal knowkHlRo on the part of the in- 
 dividual disposiuj; of hiH Hhares forl)ade hiiu to do what 
 he deHiivi to do, and tliat hi« persisting; in doin^ it, rely- 
 infi; on the Iffnorance of the directors, and conccaliu}; 
 what he knew, was a fraud upon the directors." The 
 above, it must be observed, refers to a case where the 
 directors had power to control the transfer. 
 
 15. Transferor Must Have Paid Calls. 
 
 Under ('anadia:i Acts every transfer made of shares 
 in a company' formed under them, while calls thereon 
 remain unpaid, is absolutely without effect. The effect 
 of this rule must be to avoid a good deal of doubt and 
 ditliculty as to the validity of such a transfer, and also 
 to avoid t<'mi)lation on the part of the directors to regis- 
 ter transfers in order to avoid payment of calls which 
 have been made. But as doubt may arise thereunder, as 
 to when a call is made, or is payable, it may be of use to 
 refer to some of the decisions which have been rendered 
 on this j-oiut. In Dawe's case {a), it was held that a call 
 is owinj; from the day on >\iuch it is made, although it 
 be paynble on a subsecpient day. And by Art. 5 of 
 Schedule 1 attached to English Act of 1802, and also by 
 see. 53 of the Dominion Act, " A call shall be deemed to 
 ixave been made from the time when the resolution of the 
 directors authorizing such call was passed." 
 
 An otherwise valid transfer of shares allotted to the 
 transferor upon which he has not paid anything, no 
 calls having been made at the time of transfer, is not in- 
 valid, because the ten per centum upon allotted stock 
 directed by section 45 of the Act to be " called in and 
 made payable within one year from the incorporation of 
 the comi)any has not been paid." 
 
 The last mentioned section is directory merely {h). 
 16. Registry of Transfer, How ]\rADE. 
 
 A registry of transfer is made by surrendering an 
 
 (rt) In re China Steamship Co., 38 L. J. 512. 
 
 [h) Ontario lavestmeiit Association v. Sippi, 20 Ontario Reports, 
 440. 
 
STOCK, CALLS, ETC. 
 
 88 
 
 old certiOcatc of stock to tho corporation, making an 
 entry of the trauHfer on the corporate iCKistrv, and 
 takiuj,' from the cori)oration a new certilicate issued in 
 the name of the transferee, 'Hie entry is f,'enerally nuide 
 by a corporate officer, but lu^ may insist on its beini,' made 
 by the person applying for transfer. The object of 
 obtaining the registry is to obtain a right to vote, to 
 receive dividends, and various otlier incidental stock- 
 holders' rights; also to cut olT corporate liens and the 
 rights of third parties who may attach or claim the 
 stock. If there is a reasonable legal doubt as to the 
 right of the ai»plicant to obtain registry, the corporation 
 may refuse it, and thus obtain the protection' of being 
 compelled to make it by legal proceedings. If two 
 parties claim the stock, each denying the right of the 
 other, the corporation may interi)Iead, provided there is 
 a reasonable legal doubt as to who is entitled to the 
 stock. If the corporation imjtroperly refuses to register 
 a transfer when recjuested, the applicant may have his 
 remedy in damages. The instruments of transfer should 
 be numbered in consecutive order, and a record of their 
 number and date made in the Register of Members 
 against the names of the transferors. They should be 
 retained by the company as evidence of the transaction, 
 and of the transferee having undertaken to be bound by 
 the rules of the company. 
 
 It fre(]uently ha])pens that a transfer of shares takes 
 l)lace by way of gift, as. for instance, from a husband to 
 his wife, or from a father to his children, without any 
 money actually passing. In such cases a formal instru- 
 ment of transfer must be executed by the jiarties before 
 the tran-saction can be registered, a '' nominal considera- 
 tion *' [one dollar is the usual amount] is generally in- 
 serted in the instrument. 
 
 In i-ases of tran«mi.<sion of shares from a deceased 
 shareholder certain formalities have to be observed 
 before any alteration can be made in the register. In the 
 first place, the probate of the will or the letters of ad- 
 ministration should be produced to the company, and the 
 secretary should endorse the fact of their production 
 
% li i 
 
 84 
 
 SHAHEIIO[J)ERS' AND DIHEC'TOHs' MAN'I'AL, 
 
 I 
 
 Upon those (hnuniciilH. ITc sliouhl also iiuikc nn ontry in 
 tlic rc^'islci" of the «l«'ii1h of the shaicliohlcr, and of the 
 name and adilicss ( f the acting; cxcciitoi' ov adniiniHtra- 
 toi*. Jn duo couiso llu' shaics will be citlior Iransfonrd 
 to the legatees or next of kin, or converted iut(» money. 
 In either case tlie executor or adininiHtrator will sign as 
 transferor, but of course tlie transferee will act on his 
 own behalf. 
 
 17. Definitions of Pledoe, Mortoaoe and Lien. 
 
 A jdedf^e may be defined to be a delivery of personal 
 property as a security for some debt or enj;atj;ement. A 
 mortj^aj^e of personalty, on the other hand, is a sale with 
 the condition attadied, that, if the moit^iijior ])erfornis 
 some act, the sale shall be void. In a pledge, the title 
 remains in the jiledgor, and the pledgee has a special 
 property in the thing i)ledged. In a mortgage, the title 
 passes to the mortgagee, subject to being revested in the 
 mortgagor ujjon jiayment of the debt. 
 
 In jth'dges. the thing ]dedged must be delivered to 
 the jdedgee. In mortgages, generally, the oossession of 
 the thing UKU'tgaged remains with the mortgagor. 
 
 A pledge differs also from a lien. A pledge, by im- 
 plication, gives the jiledgee a power to sell on due notice, 
 in case the debt is not paid on maturity, while a lieu 
 gives merely the jwwer of detention until the debt is 
 paid. 
 
 LS. How a Pledge of Stock Arises or is Made. 
 
 A i)ledge of stock is generally made by a delivery of 
 the certificates of stock indorsed in blank to the pledgee, 
 and a memorandum in writing to the effect that the stock 
 is held in pledge is generally signed and given to the 
 pledgor, and a copy thereof attached to the certificates 
 of stock. 
 
 19. Liability of Members on Stock. 
 
 Under the Canadian Acts the principle of liability 
 "limited by shares" has been adopted purely and 
 ^ iply, and this is the onlv form of company which 
 
STOCK, CALLS, ETC. 
 
 80 
 
 can be created under these Acts. And the reason is 
 prolinbly tliis. It is by far the 8inii>h'st form, the best 
 known, and lln' most readily understood. And \vh<»re no 
 iillcrnative is itrcscntcd no doubt can exist as to tlio 
 extent lo whicli the mendx'rs in any company formed 
 under it a)'(' liahle. If tlie sliares of any lioldcr are fully 
 paid up he bears no liability whatever in respect tln^reof 
 for the alfairs of the ccmipany. 
 
 Neither the directors nor all the other stockholders 
 combined, in corporate meeting assembled or otlu*rwise, 
 can compel a dissent iufj; stockholder, whose stock is 
 fully paid u[>, to pay any more money into the corporation 
 or subject him to further liability on his stock. 
 
 He is, as far at least as the outsid<? world is con- 
 cerned, as though he was a perfect stranger to it. A 
 member today and interested, it may be to the extent of 
 thousands of dollars, in its prosperity, entitled U> take 
 part in its meetings and intlueuce its atfairs, to-morrow 
 he may have severed all connection with it, and care not 
 one straw whether it succeeds or fails. And while the 
 shares remain in his hands his only liability in respect of 
 them is, that he may lose some portion of what he may 
 have paid for them, a portion generally determined by 
 the attairs of the company and the " condition of the 
 market.-' 
 
 This liability to loss, however, is always set otf by a 
 corresponding chance of gain, of the balance of which the 
 holder (or some one for him) may judge and may govern 
 himself accordingly, His liability, in short, is that of 
 the holder of any other merchantable commodity, which 
 may fall or rise in value according to the mark<'t, and no 
 other. But with the holder of unpaid shares the case is 
 somewhat different. 
 
 He is still liable in respect of Inem to the amount 
 which has not been paid in, and is, as will be seen here- 
 after, subject to an action at law for such amount, either 
 at the suit of the company or its creditors. And this 
 liability, to pay, is always exigible, subject only to the 
 formality on the part of the company to make what are 
 
HmBOmMUUBM 
 
 86 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 known as "calls" for the whole or a part of that which 
 remains due. The creditors of the company alfeo may 
 require payment of the balance due at any time on 
 evidence that the amount of the claim cannot be realized 
 from the assets of the company, or mi^ht, under the Acts 
 providing for such a case, cause proceedings to be talccu 
 with a view of winding up the company, when all 
 amounts un^iiid on stock may be called in by the 
 Liquidator, Receiver or Assignee. 
 
 After the issue of Letters Patent in 1880, incor- 
 porating the company and naming certain persons as 
 shareholders, these persons stated to certain of the 
 directors of the company that they would not accept their 
 stock, and would have nothing more to do with the com- 
 pany, but no proceedings were taken by them to relieve 
 themselves from liability, and no proceedings were taken 
 against them until the company was wound up in 1891. 
 
 Held, distinguishing Nicol's Case, 29 Ch. D. 421, that 
 as these persons had not a mere inchoate right to receive 
 shares, but were actually shareholders and members of 
 the company by virtue of the charter, mere statements 
 of this kind, and the lapse of time, and the failure of the 
 directors to enforce payment of the shares, did not re- 
 lieve them from their liability as shareholders. 
 
 In re Haggert Bros. Manufacturing Co., Peaker and 
 Eunions' Case, 19 A. R. 582. 
 
 20. How Ltarility May be Incurred. 
 
 This liability may be incurred in several ways: 
 
 By subscription of the share list before incorpora- 
 tion, ]irovided the subscriber has been made a corporate'.- 
 according to the terms of his subscription. 
 
 By subscription or allotment subsequent to incor- 
 poration. 
 
 By purchase. 
 
 21. How Repudiated. 
 
 And this liability may be repudiated on the ground 
 
STOCK, CALLS, ETC. 
 
 87 
 
 Of conditions not agreed to, attached to the ullot- 
 ment. 
 
 Of misrepresentation, concealment or fraud on the 
 part of the company or its agents, bv which the person 
 i- night to be held was induced to undertake the liability, 
 provided always that the proper proceedings are prompt- 
 ly taken. 
 
 But it may be laid down as a rule that no shareholder 
 can' escape liability or repudiate his membership by 
 reason of irregulariries on the part of the directors or 
 dissatisfaction with their management of the company. 
 His proper course in such case is to sell out at the best 
 advan .ge he can. And even though the company m.ay 
 have done acts amounting to, or rather which would 
 authorize a forfeiture of its charter under the Act, or 
 under its special Act, if created by special Act, without 
 first taking proceedings to have such forfeiture pro- 
 nounced. 
 
 But suppose the company had forfeited its charter 
 by its acts, and the forfeiture had been pronounced, 
 would that relieve the shareholder, even though a non- 
 consenting member to the acts in question, from his 
 liability? It does not appear that that could be, either. 
 Indeed, such a pretension would be too absurd to be 
 entertained for a moment. The liability of a shareholder 
 for the balance unpaid on his shares is due really to the 
 creditors of the company. It is .a lisibility to contribute 
 to the assets of the company, or, in other words, to the 
 security which the creditors have for their claims. The 
 shareholder is a guarantor of the undertaking of the com- 
 pany to the amount unpaid on his shares. And if, in 
 consequence of irregularities on the part of a majority of 
 the comi)any, or rather of a majority of the members 
 present at any regular meeting, he could repudiate his 
 liability, then all those who did not cou'sent to such 
 irregularities might do so, and the creditors would find 
 a great portion — perhaps the greatest portion — of their 
 security suddenly wiped out. So that the most a plea of 
 forfeiture could effect would be to defeat the right of the 
 
IS' 
 
 1 ii: 
 
 i 
 
 11 
 
 88 
 
 SHAUEHOLDEUS AND DIHECTOllS MANUAL, 
 
 company to such action (which it would undoubtedly do 
 if the forfeiture had been pronounced), and to postpone 
 the obligation to pay until the rights of the creditors 
 could be enforced in a more regular manner. 
 
 22. The Liability of an Agent as Transferor or 
 
 Transferee. 
 
 Sometimes a subscription for stock is made by one 
 person as the agent of another, and the stock is entered 
 on the corporate books in the name of the agent. In such 
 a case it is the rule that corporate creditors may hold 
 either the principal or the agent responsible on the 
 stock. But an agent who is compelled to assume and 
 pay charges on the stock may recover from his principal 
 the amount so paid. Where a transfer is made, not lo 
 the princii)al himself, but to an agent, the latter is but a 
 nominal holder, and is subject to the rules applicable to 
 such. The transferee of an agent, when suit is brought 
 by corporate creditors to enforce a denmnd against the 
 stock, cannot set up that the agent had no power to 
 transfer the stock to him. If he has received the certifi- 
 cates and appears as a stockholder on the books of the 
 corporation, he is, as between himself and creditors of 
 the corporation, a shareholder. 
 
 23. Liability, How Terminated. 
 
 The liability of a shareholder may be terminated and 
 discharged 
 
 By payment in full. 
 
 By surrender, where provided for by the charter or 
 regulations of the company. But where such power is 
 not specially provided for in some manner, it does not 
 appear to exist. " In the absence of special authority 
 of this kind," says Ilealy, " there is no inherent power 
 in directors to accept a surrender of shares; nor is the 
 acceptance of the surrender a matter lying between the 
 majority and the minority." 
 
 The right or power of a company to accept a sur- 
 render of its own shares involves the power to deal in 
 them. And as such power, if it exist at all, can exist 
 
STOCK, CALLS, ETC. 
 
 89 
 
 only tor the benefit of the company, any acceptance of a 
 surrender of shares not wholly jiaid up would simply be 
 a matter of biirj^ain as for a transfer between two in- 
 dividuals. Assuming such pow(!r to exist, the company 
 could say to the shareholder, " You have paid so much 
 on your shares, and . t the present market value they are 
 worth so much; we will accept your shares for the 
 balance due on them; [vv uj) or down, as the case may 
 be], and guarantee you against any further liabilii}' in 
 respect of them.'' That this is simply dealing in its omu 
 shares is therefore evident, and nmy be still further in- 
 ferred from this, that to accept a surrender of shares and 
 retain them in their hands would be reducing the capital 
 of the company, which it has no power to do, except in 
 the manner provided for in the Act. They would there- 
 fore have to be re-issued to other parties on such terms 
 as they could, which would amount, as before stated, to 
 a mere trading in- its own shares. 
 
 Without an express power in the letters patent or 
 charter of the company a holder of unpaid shares can not 
 be relieved of liability by the company. 
 
 The liability of the holder may be terminated also by 
 a bonaji'le sale and transfer of his property in the shares 
 to another, provided, as has been pointed out, that such 
 other is accepted by the company, and an entry of the 
 transaction made in the books of the company before a 
 winding up is commenced. But as long as a person's 
 name aj)pears upon the books of the company as a stock- 
 holder, the presumption is that he is owner of the stock, 
 and in an action to enforce payment of a call, the burden 
 of proof is upon him to show that he is not a stockholder. 
 
 24. The Various Remedies for Non-payment 
 
 OF Shares. 
 
 When a subscriber fails or refuses to pay for the 
 shares of stock for which he has subscribed, the corpora- 
 tion generally has several methods of enforcing the 
 contract. 
 
 First, there is the common law at n to collect the 
 subscription as a debt. This remedy always exists. 
 
1 
 
 fill 
 
 ^ i 
 
 i: 1 
 
 1 'i i 
 
 1' 
 
 90 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 I ill 
 
 Second, the corporation may sue on the subscription, 
 obtain judgment, and then proceed to sell the stock 
 under an execution levied to collect the judgment. Third, 
 the corporation may bring an action at law tor breach of 
 contract, the measure of damages being the ditference 
 between the value of the si :»ck at [he pnce which the 
 subscriber was to pay and t e ms-rket value at the date 
 of tlio refusal to pay. A i. ^h and very important 
 remedy is that of forfeiture. It is effected in one of two 
 ways: the forfeiture may be by a strict foreclosure of the 
 stockholder's stock, that is, the taking of his stock by 
 the corporation' itself ; or it may be by a public sale of 
 the stock for non-pajment of the subscription. The 
 remedy by public sale of stock is by statutory authority 
 only. 
 
 25. Forfeiture of Shares. 
 
 The power to forfeit shares, by which no change is 
 effected in the liability of the holder, must be regarded 
 as totally distinct from that of accepting the surrender 
 of shares and relieving the holder from ixnj further 
 liability, and must be strictly pursued. 
 
 26. Notice in Case of Forfeiture. 
 
 A notice to the delinquent subscriber that his shares 
 will be forfeited at a day named is generally requisite 
 to effect a forfeiture (a). The subscriber is entitled to 
 full knowledge of the fact that, unless he pays up within 
 a specified time, he will lose his stock. The requirements 
 of the statute or charter, with respect to the contents of 
 the notice, and the length of time which is to elapse 
 between the notice and the forfeiture, must all be strictly 
 complied with. It is accordingly held that the notice 
 must state correctly the amount due, for non-payment of 
 which the stock is to be forfeited. The time, also, within 
 which payment is to be made must be accurately stated, 
 and also the place where the sale is to be made. The 
 mode of giving notice of a contemplated forfeiture of 
 stock is generally specified in the statute authorizing the 
 forfeiture. 
 
 (a) See form infra. 
 
STOCK, CALLS, ETC. 
 
 91 
 
 27. Tender, by Stockholder, Before F( p.feiture. 
 
 Where the amount due on a subscription, for non- 
 payment of which a forfeiture is about to take place, is 
 tendered to the proper officer of the coi-poration at any 
 time before the sale actually takes place, the forfeiture is 
 not valid. This rule is based on justice, and, while pro- 
 tecting the corporation and the public, it relieves the 
 stockholder from the hardship of a harsh ai.d summary 
 remedy'. 
 
 28. Improper Cancellation of Stock. 
 
 In Fuches against Hamilton Tribune Printing and 
 Publishing Co. (a). 
 
 One C. subscribed for 100 shares in the H. company, 
 the subscription list being headed: "We subscribe for 
 and agree to take the number of shares of the capital 
 stock of the H. company set opposite our signatures, and 
 to pay on account thereof 50 per cent, to the secretary- 
 treasurer of the companj^ in quarterly payments of 12^ 
 per cent, each, of the amounts subscribed for by us 
 respectivelj', the first of such payments to be made on 
 February 1st, 1882." C. was at the first shareholders' 
 meeting elected a director, and remained so until the 
 final winding up of the company. One of the by-laws of 
 the company provided for the calling of t^e second 50 
 per cent, of the stock subscribed at any time after 
 November 1st, 1882, on thirty days' notice. In August, 
 1883, the president of the company arranged with G. 
 that he should sign for eighty shares on the terms of a 
 new stock-book which had been opened, and that C.'s 
 original stock was to be treated as cancelled. 
 
 C. accordingly signed the new book. This arrange- 
 ment with C. was never communicated to the share- 
 holders of the company. In January, 1884, a winding-up 
 order was made, and C. was subsequently declared a con- 
 tributory to the amount of 100 shares. C now appealed, 
 claiming to be a contnbutory only to the amount of 80 
 shares, on the ground that the arrangement of August, 
 
 (a) Copp's Case, 10 O. K. 497. 
 
 :l I 
 
) 1 
 
 III 
 
 •i 
 
 92 
 
 SHAllEHOLDEKS AND DIRECTORS MANUAL, 
 
 3 883, was a valid compromise, entered into with liim 
 because he subscribed orij^iiially on the uud^rstandiug, 
 (Ih) that the company was not to go into operation be- 
 fore all stock was subscribed for; (2nd) that only 50 per 
 cent, of his subscription would have to be paid: — lEeld, 
 that whether directors have inherent power to com- 
 promise with shareholders or not, there was nothing to 
 support the compromise here set up. Aii to (let)' C.'s 
 actions as director were totally at variance with this 
 contention; and as to (2nd) the subscription was uncondi- 
 tional, and though expressly providing for payment of 5t) 
 per cent., it was not inconsistent with the balance being 
 paid when required. Moreover, the by-laws, at the 
 adoption of which C. was present, recognized the right 
 to call up the whole stock, and C. appeared to have made 
 no dissent. 
 
 29. Calls. 
 
 1. Meaning of Term. — The term " call " is used in- 
 differently to denote a demand made upon the share- 
 holders for a contribution, or the amount or sum of 
 money demanded. 
 
 2. What are. — But though used to denote both the 
 demand and the money demanded, it is used exclusively 
 with reference to the liability of a shareholder on his 
 shares. All moneys, however, paid in on account of 
 shares are not necessarily calls. 
 
 The liability of a shareholder to contribute to the 
 assets of a company until his shares are fully paid up is 
 a debt which is always due, and subject to be called 
 when and how the directors may determine. But, though 
 this is the case, it is usual to make by-laws to regulate 
 the length of notice to be given, the time which shall 
 elapse between two successive calls, the amount of each 
 call, etc. 
 
 A call however, may be illegal as being made for a 
 purpose not warranted by the constitution of the com- 
 pany, that is to say, for something not within the objects 
 of the company, as, for instance, to purchase stock iu 
 
STOCK, CALLS, ETC. 
 
 m. 
 
 other companies where tne power to invest in tlie stoclc 
 of other conipjinies. is denied by the Act under wliieli it 
 is formed, or by iis h'ttei's paiei.t. And if it be sliown 
 that the call has been made for an iUej-al pi.rno.se, such 
 cnll cannot be enforced. A v^all is not irregular because 
 prospective, that is to say, because made before the 
 money was actually required, but when it was aj)parent 
 that it would be recpiiri'd about the time called for. 
 
 3. IIoxv m<((le. — A call is nuide by the directors 
 passinjJT a resolution " That a call of | per share, pay- 
 }'J)le to Mr. , the treasurer of the company, at the 
 company's office, street, etc., on the day of , 
 189 , be and the same is hereby made." The by-laws of 
 the company should prescribe whether such resolution 
 can be passed at an ordinary nieetinj^ of the directors, or 
 whether a meeting should be called for the purpose. 
 This resolution should be duly entered in the minutes of 
 the meeting. 
 
 4. Call is generally necessary. — As a general rule, a 
 call must be made in order to render a subscription or 
 any part thereof due and payable to the corporation. A 
 contract of subscription, unlike other contracts to pay 
 money, is a promise to jtay; but, by implication of law, 
 the p.ayment is to be only at such times, and in such part 
 payments, as may be designated by the corporate authori- 
 ties in a formal declaration known as a " call." In other 
 words, the subscription is a debt payable at a future 
 time. The time when it shall be paid is indehnite until 
 fixed by a call. 
 
 5. When a call is unnecessary. — If, however, a sub- 
 scription contains a promise to pay upon a certain day, 
 no call is necessary; but the subscriber is bound to pay, 
 at all events, upon the day named. 
 
 6. Notice of call. — The length of notice required to be 
 given of a call is generally provided for by the by-laws of 
 the company, but the call itself dates from the passing 
 of the resolution, and not from the time the notice is 
 given or received. And if a certain time must elapse 
 between two successive calls, that time must be reckoned 
 
ill!' 
 
 94 
 
 SHAIIEIIOLDEUS' AND DIRECTORS* MANUAL. 
 
 exclusive of the day on which the resohUious were 
 passed. 
 
 Where the charter of a company provided tliat one 
 month's notice of callfc' " shall be given,'" it was held that 
 sending such notice by post was not a compliance with 
 this provision (a). 
 
 7. Interest on arredrft. — Itut though a call is deemed 
 to have been made on the day the resolution was passed, 
 it is not so for the computation of interest on arrears, 
 which runs at the legal rate of six per cent, per annum 
 from the day appointed for payment. 
 
 8. Calls must be impartial and uniform. — A call can- 
 L'>t be made so as to alTect a part only of the subscribers. 
 It must be nuide on all alike, or it will be void. The 
 Courts will not allow the directors of a company so to 
 proceed as to require some stockholders to pay calls, and 
 not to re(iuire others to do the same. Any such attempt 
 will be promptly set aside and rectified. 
 
 9. When no call has been made— Um\(}r ordinary 
 circumstances there is no liability to pay for shares un- 
 til a call is made, and notice thereof given to the share- 
 holder, and until that time the Statute of Limitations 
 does not begin to run against the company. Therefore 
 persons named in the charter issued in 1880 as share- 
 holders were in 1891 held liable to pay the amount of 
 their shares, no fonnal call having in the meantime been 
 made. Haggert Bros. :Mfg. Co., Teaker and Ruuions' 
 Case, 19 A. R. 582. 
 
 (a) Ross a{»ainst Machar, 8 0. R. 418. 
 
CHAPTER V^II. 
 
 DIVIDENDS. 
 
 1. Regulations Respecting. 
 
 2. Nature of. 
 
 3. Cannot be Enforced 
 
 Until Declared. 
 
 4. Stock Dividends. 
 
 5. Discretion of Directors 
 
 AS to Declaring Divi- 
 dends. 
 
 6. To WHOM THC Corpora- 
 
 tion is to Pay the Divi- 
 dends. 
 
 7. To Whom the Dividend 
 
 Belongs. 
 
 8. Dividends Must be 
 
 Equal and without 
 Preference. 
 
 9. When Declared is a 
 
 DebtDue Absolutely 
 TO THE Shareholder. 
 10. Right of Company to 
 Apply Dividends to 
 the Payment of 
 Debts Due to it by 
 the Shareholder. 
 
 1. Regulations Respectin':^ Dividends. 
 
 The English Act heaves tlic (incstion' of dividends 
 entirely to the regulations of the eoin])any. " The right,'' 
 says Thring, '* of a shareholder to dividends is, of course, 
 governed by the regulations of the company." It is so in 
 effect by all Cai.adian Acts; that is to say, the right to, 
 rate and time of payment, with all other questions in- 
 cident thereto, are matters entirely within the com])any's 
 control. The Acts impose a heavy liability upon 
 directors who pay dividends out of that which belongs 
 to the creditors, i.e., out of capital. 
 
 2. Nature of. 
 
 The term " dividend " really means and refers to 
 that which is to be divided among the shareholders, and 
 that only which properly belongs to and can be divided 
 among the shareholders, is the fund created by the net 
 
II 
 
 III 
 
 |3i i 
 
 I J; 
 
 i 'm 
 
 96 
 
 SHAUEHOLDEUS' AND DIUECTOUs' MANIAL. 
 
 jtroflts of tlio company. It is for this and tliis only tlioy 
 liavo invj'stcd in i(s shares, and if. contrary to their cx- 
 j)('ctations, llicre arc no profits for a time, tiien they must 
 wait until there are; or if thero is no reasonable expecl.a- 
 tion of there beinj,' any, then the company should be 
 wound up, and after the creditors have all been paid, the 
 shareholders may divide the stirjdus assets amonp them- 
 selves, lint, havinfj induced and obtained credit on Ihe 
 strenffth of the cajtital fund which they have <ontributcd. 
 it would be manifestly unjust to allow them to withdraw 
 such capital or any part thereof, either by the name of 
 dividends or any other name, when they see that their 
 expectations are not likely to be realized. 
 
 As lonp: as the com])any is earninj; sufficient to pay 
 a satisfactory dividend, there is no temptation to draw 
 upon the capital for that purpose; but as soon as it falls 
 below that, the interest of all, but especially of the largo 
 shareholders, creates a stronj? temptation to pay hof/vf^ 
 projitfi out of capital in order to maintain the credit of 
 the company and the ])rice of its shares. And it is this 
 temptation, clearly, which has caused the Legislatures 
 to remove the question out of the domain of company 
 regulation, and, by one short provision, make every pay- 
 ment of dividends out of anything but the actual profits 
 of the company illegal, involving serious liabilities on all 
 concerned. The cai)ital should be kept intact in the in- 
 terest both of the creditors and shareholders of the com- 
 pany, and the net profits only are all that the share- 
 holders can claim when paid to them until the company 
 is wound up. 
 
 The proper and legitimate way of arriving at a state- 
 ment of profits is, says liuckley (a), to take the facts as 
 they stand, and, after forming an estimate of the assets 
 as they actually exist, to draw a balance so as to ascertain 
 the result in the shape of profit or loss. If this be done 
 fairly and honestly, without any fraudulent intention or 
 purpose of deceiving any one, it does not render the divi- 
 dend fraudulent that there was not cash in hand to pay 
 
 (n) Buckley on the Companies' Aits, p. 414. 
 
 k 
 
J)iVIf>KNI)S. 
 
 97 
 
 it, or tliat the coinpauy were even oblifijed to borrow 
 money for that purpose, and the fact that an exa}?- 
 gerated valne was put upon assets whicli were tlu'n in 
 jeopardy, and were subseiiuenlly lost, does not render the 
 bahince shr'et delusive and fraudulent. A case known as 
 Stenifers, which appears to be a leading one on the (|ue8- 
 ion of dividends, was that of a company formed for 
 blockade running, where the articles itrovidcd that no 
 divid<!nds should be payable except out of the prolits 
 arising from the business of the company, etc., and it 
 was decided that a dividend i)aid on a balance sheet in 
 which the ships engaged in the trade and other risks 
 were bona Jide eatimntvd at the full nominal value, must 
 be considered to have been paid out of ')i'<*hts, although 
 the company had actually to borrow money to pay it {<t). 
 
 3. D[viDENi).s Can'not he Evfohcki) Until Declaukd. 
 
 The declaration of dividends is pai-t of the internal 
 management of the company, which is governed in its 
 ultimate arrangement by the will of a majority of the 
 shareholders. And, therefore, it has been said that '' till 
 a dividend is declared, a shareholder has no legal title, 
 nor even an equitable riglit thereto, which can be en- 
 forced by suit."" 
 
 4. Stock Dividends. 
 
 A stock dividend, as the name imports, is a dividm-d 
 of tlie stock of the corporation. Such a dividend is law- 
 ful when an amount of money or property ('(juivalent in 
 value to the full par value of the stock distributed as a 
 dividend lias been accumulated and is i>ermanently add- 
 ed to the capital stock of the corporation. Corporations 
 fre(iuently make a dividend of this character when im- 
 provements of the corporate i)roperty or extension of the 
 business have b<'en made out of the jn-olits earned. It 
 is also made when the corporate plant has increased in 
 value, and it seems better to issue new stock to represent 
 the excess of value than to sell the increase and declare 
 
 (a) L. R.4Ch. 47."). 
 
 W.S.D.M. — 7 
 
 , 1 . #* J I 
 
08 
 
 sn.vin:ii(iiJ)Ki!s and kiukctohs manual. 
 
 a caHli (lividi'inl. In (his country these divldendH nro 
 freciuenlly made, iin<l Jirc constjiiitly snstiiined hy the 
 courts. The shareliohh'i's, having; voted (o declare su<'li 
 a divi(U'nd, may, at any lime before tiu> certilicates are 
 issued, reconsider the matter and revoke tlie dividend. 
 
 I'referred sliandiolders are entith'd to share equally 
 with the common shareholders in the distribution of 
 stock by a slock dividend. 
 
 5. Discretion of the Diuectors as to Declarino 
 
 Dividends. 
 
 In p^eneral it is for tln' directors, and not the share- 
 holders, to determine whether or not a dividend is to be 
 declared. ^Vlien, therefore, tlu' directors have exentised 
 this discrelion, and declared or refused to di'clare a 
 dividend, there will be no interference by the couits 
 with their decision, unless they are }i;uilty of a wilful 
 abuse of their discretionary powers, or of bad faith, or of 
 a n( jflect of duty. Accordingly, the directors may, in the 
 fair exercise of their discretion, invest j»rotits to extend 
 and develop the business, or for the payment of i)robable 
 future indebtedness, ilionsh it is not yet due. The free 
 exercise of their discretion cannot be interfered with by 
 the contracts of i)romoters or oripnal incorporators as 
 to the disposition of corporate prolits. 
 
 Nevertheless the discretion of the directors iu' the 
 matter of decla'"^g or refusing!; to declare a dividend is 
 not absolute. Tl ^ourts exercise a supervisory power in 
 this matter, and where there is a clear abuse of power 
 in refusing- to declare the dividend, a court of equity will, 
 at the instance of any shareholder, compel the pro])ep 
 authorities to declare and i>ay the dividend. Laches on 
 the part of the sha'vholders in failing to commence their 
 suit to compel the j)ayment of a dividend until the cor- 
 poration becomes insolvent is fatal. And the court will 
 also consider that the aggrieved shareholders may, if a 
 majority, refuse to re-elect the directors at the next 
 election, or may sell their shares. 
 
DIVIDENDS. 
 
 99 
 
 6. To Whom the Coiu'ouation is to Pay tiik Dividend. 
 
 Tlu' (iiH'Htion iiH to whom a dividend sliull W paid 
 nftt'i* it has bct'ii rrmilailv declared is one wliicli soine- 
 tinicH involvei* tlic eorporaliou iu e()nMi«lerable dillicully. 
 It \h not always eas.v to decide whicli one of twj or more 
 claimants is entitled to the dividend. 
 
 The general ruh* is that the corporation may pay the 
 dividend to the person in whose name the stock stands 
 registered upon the e(>rporate stock-book. It ma}' do so 
 without encpiirin}^ whether he has transferred the stock, 
 and without re«iuirinj; the production of the certiticate. 
 
 Moreover, it is a well s<'t tied rule that the corpora- 
 tion is protected in payinj; dividen<ls to a recorded share- 
 holder, altliou};h he may have transferred his siiares. 
 lUii after notice of a transfer the corporation may pay 
 the dividend to the transferee, although no registry has 
 bi'C'n made. 
 
 The right to dividends does not, however, depend 
 upon the issue of the certiticate, and the own<'r of shares 
 may claim his dividends thoiigh no «ertitlcate has ever 
 been issued by the corporation. The h -irs of a stock- 
 holder must, ill order to entitle themselves to dividemls, 
 I»rocure a transfer of their ancestor's shares into their 
 own names on the corporate books. .Moreover, the cor- 
 poration is protected if it pay dividends to the adminis- 
 trator without notice of a transfer by him. 
 
 Dividends on stock held by a married woman must 
 be paid according to the law of the domicile of the cor- 
 poration, and not according to the law of the domicile of 
 the married woman. 
 
 A husband by collecting dividends on his wife's 
 shares does not thereby reduce the stock to possession. 
 
 Even "though the cori>oration closes its transfer-book 
 several days before a divide ^d is declared, nevertheless 
 those are entitled to the dividend who apply for registry 
 on or before the day of the declaration of the dividend. 
 
 7. To Whom the Dividend Belongs. 
 As between the vendor and vendee of shares of 
 
m 
 
 
 100 
 
 SHAUKIIOLDERS AND DIUECTOKS MAXl'AL. 
 
 stock, it is a settled rule that the vendee is entitled to all 
 the dividends on the stock which are declared after the 
 sale of the stock. Even though the transfi^r has not been 
 recorded, the transferee has a right to the dividends as 
 against the transferor. The law, moreover, refuses to 
 investigate the question when the dividend was earned. 
 In contemplation of law tlie net profits are earned at the 
 instant the dividend is declared. But of course any 
 agreement between vendor and vendee, modifying or 
 changing this rule, will be upheld. It is a proper subject 
 for a contract, and a valid contract may be made in 
 reference to it. When a dividend is made payable on a 
 day subsequent to t)ie day on which it is formally de- 
 clared, it belongs to the stockholder who owns the shares 
 on the day the dividend is declared, and not to the owner 
 at the time it is payable. A dividend declared but pay- 
 able at a future day may be assigned apart from the 
 stock itself. A transfer of stock passes all dividends 
 declared subsequently to the transfer, although the 
 dividend was earned before the transfer was made. 
 
 A legatee of shares takes the stock as it was at tlie 
 time of the testator's death. All dividends declared 
 previous to that event go to the administrator. Where 
 stock is bought deliverable at the seller's option, the 
 dividends dedareu between the day of the purchase and 
 the delivery belong to the purchaser. So also an offer to 
 sell shares, which is subsequently accepted, entitles the 
 purchaser to dividends received by the owner while the 
 offer was open. But a contract to sell on demand entitles 
 the vendor to dividends declared before the demand is 
 made. 
 
 1 
 
 
 
 ■^^ :U 
 
 1; 
 
 8. Dividends Must be Equal and Without Piiefeuence. 
 
 Dividends among stockholders of the same class 
 must be always equal and without preference. If the 
 company has issued preferred stock, the holders thereof 
 con*ititute a class by themselves, and shareholders of that 
 class will be entitled, as a class, to dividends in prefer- 
 ence to holders of the common stock. But as between 
 
DIVIDENDS. 
 
 101 
 
 sliaroholdora of the same class there can be no discrim- 
 ination, and profits set aside for dividends must be 
 evenly divided amonj; the stockholders according? to tlie 
 amount of stock lield by each shareholder. There can be 
 no discrimination in the payment of dividends between 
 the lar{?e and small stockholders of a company. After 
 payinjj a dividend to a part of the shareholders the cor- 
 poration cannot refuse to pay the rest upon the fjround 
 that by so doiuj:: the capital stock will be impaired, or 
 that all the surplus earnings have been either ]>aid out 
 as dividends or invested in permanent improvements. 
 
 9. A Dividend When Declared is a Debt Due Abso- 
 lutely TO THE Shareholder. 
 
 When a dividend out of the earnings of the company 
 has been regularly declared and is due, it becomes 
 immediately the individual property of tiie shareholder. 
 
 10. RlOHT OF THE CORPORATION TO AlM'LV DIVIDENDS 
 
 TO THE Payment of Debts Due ro it by the 
 Shareholder. 
 
 It is well settled that if, at the time a dividend be- 
 comes payable, the stockholder owes tne corporation any 
 debt, the dividend due to th.at shareholder may be 
 applied in liquidation of the indebtedness; and if the cor- 
 poration is sued for the dividend it may set up the debt 
 by way of set-off or counter-claim. This, however, 
 amounts to a corporate lien on the stock as far as 
 dividends are concerned; and it is doubtful whether it 
 could be upheld where the registered stockholder has 
 sold and transferred his certiticale of stock before the 
 dividend is declared. 
 
CHAPTER VllJ. 
 
 THE STOCKHOLDER'S RELATION TOWARDS THE 
 CORPORATION, AND HIS LIABILITY TO 
 CORPORATE CREDITORS UPON UNPAID 
 SUBSCRIPTIONS. 
 
 1. Relation of Stockhold- 
 
 ers Towards the Cor- 
 poration. 
 
 2. The Expulsion OF Stock- 
 
 holders. 
 
 3. In the United States 
 
 Unpaid Subscriptions 
 A Trust Fund for the 
 Benefit of Creditors 
 
 Unpaid Subscriptions 
 can be reached only 
 after j u d g m e n t 
 against the company, 
 AND Execution re- 
 turned Unsatisfied. 
 
 1. Relation of Stockholders Towards the 
 Corporation. 
 A coi'por.ition may contract with its stockliolders to 
 the same extent and in the same manner that it may 
 with any other persons. 
 
 A stoclvholder, as a creditor of the corporate may 
 obtain security for his debt in exclusion of other ere- 
 
 *-■ 
 
 ditors. 
 
 A stockholder has no lejjal title to the property or 
 profits of the corporation until a dividend is declared, or 
 a division made on the di.ssolution of tlie corporation. He 
 may sue the corporation or be sued by it. Moreover, lie 
 has a direct interest in the corporation, and at times may 
 take the part of the corporation in prosecuting or de- 
 fending its suits. 
 
 2. The Expulsion of Stockholders. 
 
 The law forbids the directors or stockholders of a 
 corporation having a capital stock from depriving a 
 stockholder of his rights as such stockholder. He cer- 
 tainly cannot be deprived of his right to dividends 
 ecpially with other stockholders. He cannot be deprived 
 of his right to vote. And it is clear that his various 
 rights jis a stockholder cannot be taken from him by any 
 or all of the other stockholders. In this res])ect a cor- 
 poration having a capital stock is clearly different from 
 a corporation formed for religious, social, charitable and 
 
STOCKHOLDER H RELATION TO THE CORPORATION. 103 
 
 other similar purposes. The former is for purposes of 
 gain, and the proi)erty which is represented by stock 
 cannot be talcen from a stockholder by exiK'Hinj:? him 
 from the corporation, 
 
 3. In THE United States Unpaid Subscriptions a 
 
 Trust Fund for the Benefit of Creditors. 
 
 The capital or cai)ital stock of a company is the 
 aggregate of the par value of all the shares into which 
 the capital is divided ujjon the incorporation; it is the 
 fund or resource with which the corporation is enabled 
 to act and transact its business, and upon the faith of 
 which persons give credit to the company and become 
 corporate creditors. The public, in dealing with a com- 
 pany, has the right to assume that its actual capital, in 
 nione^' or money's worth, is equal to the capital stock 
 which it purports to have, unless it has been impaired 
 by business losses. The public has a right also to assume 
 that the capital stock has been or will be fully paid up, 
 if it be necessary in order to meet corporate liabilities. 
 Accordingl}', the courts go very far to protect corporate 
 creators, and in the Ignited States it is a well-settled 
 doctrine that capital stock, and es])ecially unpaid sub- 
 scriptions to the capital stock, constitute a trust fund 
 for the benefit of the creditors of the company. There 
 are three methods by which stockholders seek to avoid 
 their liability to corporate creditors: flrst, by a cancella- 
 tion or withdrawal from the contract; second, by a release 
 from their obligation io pay tlu; full ])ar value of the 
 stock; L.l.'d, by a transfer of the stock. In each of these 
 cases, however, a court of equity does its utmost to pro- 
 tect the corporate creditors, and a rigid scrutiny will be 
 made in the interest of creditors into every transaction 
 of such a nature, though the directors are not trustees 
 for the creditors of the company. 
 
 4. Can ije Reached only After Judgment Aoainst the 
 Company and Execution Returned Unsatisfied. 
 
 The unpaid balances of subscription are not the 
 primary or regular fund for tne payment of corporate 
 debts. Credit is given to the company, not to the stock- 
 
i 
 
 104 
 
 .SHAREHOLDERS AND DIRECTORS MANUAL, 
 
 hoklors; «ind it is the natural order of business that the 
 creditors of the company are to be paid by the company 
 from funds in the corporate treasury. Ordinarily, cor- 
 porate creditors liave no knowledge or concern about the 
 subscription list, and unpaid or partially paid subscrip- 
 tions are a matter entirely between the company and the 
 subscribers. Ho long as the company meets its obliga- 
 tions in the ordinary course of business, corporate credi- 
 tors h{ive no need to concern themselves about unpaid 
 subscriptions to the stoclv. But when the company is in 
 default and embarrassed, or for any reason fails to pay 
 its debts, then its creditors have rights with reference to 
 such unpaid subscriptions. They then have the right to 
 know whether all the subscriptions for stock have been 
 fully paid in, and, if not, they have the right to compel 
 such payment. 
 
 It accordingly becomes important to know at what 
 point, in their efforts to collect what is due them, corpo- 
 rate creditors may cease to pursue the oompnnv and 
 pi'oceed directly against its delinquent members. The 
 well-established rule upon this point is that a corporate 
 creditor's suit to enforce payment of unpaid subscrip- 
 tions can be properly brought only ;i/ter a judgment at 
 law has been obtained against the company and an 
 execution returned unsatisfied. This rule is of such im- 
 portance that, by statute, a creditor's right to proceed 
 against a stockholder on his unpaid subscription is 
 allowed only after the remedy against the company itself 
 has been exhausted. By this is meant that judgment 
 shall have been duly recovered against the company, and 
 execution issued and regularly returned unsatisfied. 
 Nothing short of that exhausts the remedy against the 
 company. 
 
 This rule is founded in reason and a wise public 
 policy relative to the transaction of business, since the 
 corporate funds are the corporate creditor's primary 
 resource, even where the liability of the individual share- 
 holder is declared to be prinuiry, like that of an original 
 contractor or partner. When a company is ordered to 
 be wound up, all proceedings by creditors may be stayed. 
 
•iii..^ 
 
 CHAPTER IX. 
 
 FRAUDS OF DIRECTORS, PROMOTERS, Etc. 
 
 Classes of Stockhold- 
 ers' Wrongs. 
 
 Director or Other Cor- 
 porate Officer Inter- 
 ested IN Construction 
 Company and Secret 
 Gifts to. 
 
 Frauds by Promoters on 
 
 THE CoRPORA'nON. 
 
 Purchases by Directors 
 from the Corporation, 
 AND Purchases at 
 Foreclosure Sales. 
 
 Loans by the Directors 
 TO the Corporation, 
 ]\[ortgages by the Cor- 
 poration to Directors, 
 
 AND THE Right of a 
 Corporation — Sol- 
 vent OR Insolvent — 
 TO give a Mortgage or 
 
 ASSIGNMENT OF ITS PRO- 
 PERTY TO A Director in 
 ORDER to Prefer the 
 Payment of his Debt. 
 
 Frauds by a IMajority 
 of the Stockholders 
 UPON the ]\Iinority. 
 
 Directors must useordi- 
 NARY Care and Dili- 
 gence in the Manage- 
 ment OF THE Corpora- 
 tion AND THE Transac- 
 tion of its Business. 
 
 1, Classes of Stockholders' Wrongs. 
 
 Stockholders' wrongs, arising from a broach of trust 
 bj' directors, a majority of the stockholders or third 
 persons, are divisible into three classes. They are, lirsl, 
 fraudulent acts; second, ulfra vires acts; third, negli- 
 gence of corporate directors. 
 
 There is another 'ass of grievances — that of in- 
 ternal dissensions in the corporation and dissatisfaction 
 with its policy and acts. These, however, are latrd lyircs' 
 of the directors or majority of the stockholders. The law 
 gives no remedy for such dissensions, since the stock- 
 holder has the corporate elections as a remedy, and since 
 the m.ajority are to rule so long as they do so without 
 fraud and within the powers of the corporation. 
 
lOG 
 
 SHAIIEIKJLDEU.S' AND DIUECTOUS' MANUAL. 
 
 2. DiuECToii OR Othek Coufouate Officeu Inteuested 
 
 IN C<JNSTUUCTION CoMl'ANY AND SECRET GlFTS TO. 
 
 Tlio law is well settled that a director (lannot become 
 a contractor with the corporation, nor can he have any 
 personal or pecnniary interest in ji contract between a 
 third person and the company of which he is ji director. 
 And it is also a well established principle of law that a 
 director commits a breach of trnst in accepting a secret 
 gift or secret i)ay from a person who is contracting or 
 has contracted with the corj)oration, and that the cor- 
 poration may compel the director to tnin over to it all 
 the money or i)roj)erly so received by liim. So, also, 
 where a director receives a commission from one who 
 obtains a benefit from the corporation through the 
 director's inliuence, the latter may be comi>elled to pay 
 over the commission to the corporation. 
 
 3. Frauds by Promoters on the Corporation. 
 
 A promoter is a person who brings about the incor- 
 poration and organization of a cori)oratiou. 
 
 lie brings together the persons who become interest- 
 ed in the enterpi-ise, aids in procuring subscrii)lions and 
 sets in motion the nuichinery which leads to the forma- 
 tion of the corj»oration itself. 
 
 A promoter is considered in law as occu])ying a 
 fiduciary relation towards the cori»oration. He is an 
 agent of the corporation, and is subject to the disabilities 
 of such. There arc two classes of cases in which he may 
 be guilty of a bi'each of his duties to the company. 
 
 First, where he sells ])ro])erty to the cori)oration. If 
 he purchased the i»roperty before he began promoting 
 the com])any he may sell to the com])any at an advance 
 without disclosing his i)rofit. Hut if he ])urchased after 
 he began ]tromoling and then sold to the company, the 
 sale is vali<l only when he informs the directors that the 
 property belongs to him, and when, also, the directors 
 are conii)elent, independent, and im]»artial judges as to 
 whether the purchase ought or ought not to be made. 
 
FRAUDS OF DHIKCTOIIS, PROMOTERS, ETC. 
 
 107 
 
 If tlu' jnoiiiotcr concciils the fact that he is Rolliu}; 
 his own pi'oiH'i'ty to the company, the hitter may rescin<l 
 the saU", or, if the ]»romot<'r was sucli at tlie time he 
 purchased the i»ro]ierly, (he c()n:i»aiiy may I'ecover from 
 the i)romotei' llie ju-olit made h\ liim. If llie promoter 
 owns the ]»roperty at tlie time of forminjj; the company 
 and sells it to the comjtany at an advance over its cost 
 to him, and then induces i>ersons to subscribe by stalinj; 
 that lie made no i»rofit thereby, he is liable in ecpiity to 
 account to them for the injury they have sustained. 
 
 Second, a promoter may commit a breach of trust 
 by accej)tinj'' a commission or bonus from a person who 
 sells i)roi)erty to the corymration. The comi)any may 
 comjiel him to turn it into the corporjite trejisnry, or the 
 comj>any may rescind its purchase of the ]>roi)erty. 
 
 The law is ri«,nd in its protection of the corporation 
 and stockholders. 
 
 If the commission or bril)e paid to the promoter 
 consisted of shai-es of stock, then the com]»any may re- 
 cover from him the amount received by him upon a sale 
 of the shares and all dividends previously received, 
 tojicther with interest ; (>r, if he still holds the sliP.res, the 
 comj)any may recover the hi}»hest price which the shares 
 of the con)j)any have touched in the interval between the 
 j-ift and the action, together with interest. The sub- 
 scribers for stock may sue the directors for fraudulent 
 representations if they knew that the promoter was 
 secretly receiving' lar^e illej:;al ])rottts. 
 
 4. Purchases ry Directors from the Corporation and 
 Purchases at Fokeci.osure Sales. 
 
 One of the most irecjuent frauds ]>erpetrated u])on a 
 corporation and its stockholders is where one or more of 
 the directors i)urchase property from the corporation 
 directly or indirectly or particii)ate in the profits of such 
 a purchase. 
 
 It has been held that a director's purchase of pro- 
 perty from the corporation is voidable at the option of 
 the corporation, even though the director paid as much 
 as or more than the property is worth. 
 
108 
 
 KHAUEHOLDKKS AND DIHECTOHS MANUAL. 
 
 Similar nilos prevail in rcfjfard 1o a dircclor's pur- 
 diase of corixirate pro[)orty at a foreclosure sale thereof. 
 He cannot be a purchaser, either directly or indirectly, 
 at the foreclosure sale. This is the rule whether the 
 foreclosure is instituted by those interested in tlie cor- 
 poration or by third ])artles. If the director purchases 
 at sucli a foreclosure sale he Holds tlie inoperty as trus- 
 tee for the benefit of the corporation^ and the stock- 
 liolders. Upon being repaid the i)rice he ji;ave tlierefor, 
 he must make over the proi)erty to the corporation. 
 
 A director cannot purchase cor[)orate pro])erty sold 
 under execution, nor purchase, either in liis own name or 
 the name of another, corporate pro[»erty sold for the 
 payment of taxes. The corporation may reclaim the 
 property upon payment to the director of the amount he 
 paid therefor. A similar rule applies wliere a director 
 allows or briufj^s about a forfeit ur(> of a lease wliicli the 
 company liolds as lessee, and thci takes a new lease of 
 the siime property in his own nainc. 
 
 5. Loans hy Directors to the Couporation ; Mortgages 
 BY THE Corporation to the Directors, and the 
 Right of an Insolvent Corpouation to give a 
 Mortgage or Assignment of its Prc^perty to a 
 Director in order to Prefer the Payment of His 
 Dert. 
 
 There is no question that a corporation, while 
 solvent, may borrow money of a director, and may 
 give a mortgage to secure its payment. The giving 
 of the mortgage is viewed witli suspicion; but 
 it is legal when it is perfectly free from actual 
 fraud. But where the corporation is insolvent an 
 entirely dilferent question arises. There has been 
 difference of opinion in the courts, but the weight 
 of authority clearly and wisely holds that an in- 
 solvent corporation cannot i)ay a debt due to a director 
 in preference to debts due otliers, either by turning out 
 pro[>erty to him or by giving him a mortgage on cor- 
 porate assets. 
 
^n 
 
 FHAUUS OF DIUECTOUS, PUOMOTEHS, ETC. 
 
 100 
 
 0. FuAUDs HY A Majority of the Stock ii()IJ)i:i{s ui'on tiik 
 
 MiXOIUTY. 
 
 In iuMition io frauds ai'isinjj by I lie ill('j,'al purrliasf 
 of tlu' corporaU' projM-rt.v by a niajoiity of the stocU- 
 hoblers there may arise other fraudulent acts by the 
 majority. Tlie hiw requires of them the ulmo.st good 
 faith in their control and numajicment of the corporal ion 
 as regards the minority, and in tliis resjx'ct the nmjority 
 stand in much the same attitude towards the minoi-ity 
 that the directors sustain towards all the stockiiolders. 
 Thus, Avhere the majority are interested in another cor- 
 poration, and the two corporations have contracts 
 between them, it is fraudulent for that majority to 
 manage the all'airs of the lirst cor])oration foi" the benetit 
 of the second. A court of e(|uity will intervene and pro- 
 tect the minority upon an application by the latter. 
 
 7. DiUECTOUS MUST USE OUDINAKY CaKE AND DILIGENCE IN 
 
 THE Management of the Coui'ouation and the 
 Transaction of its Business. 
 
 The directors of a corporation are not guarantors 
 that no mistakes will be made in the management of the 
 cor])orate business, nor do they insure the corporation 
 against loss by the frauds or embezzlement of sub- 
 ordinate officers and agents. They are required to exer- 
 cise reasonable care and sound business judgment, but 
 nothing further than this. They generally serve without 
 pay, and usually by reason of their own interest in the 
 stock of the company are directly interested in the wel- 
 fare of the corporation. Kut, though this is the case, 
 they must use ordinary diligence in ascertaining the 
 condition of things, and ordinary intelligence in their 
 action as directors. They must exercise the same dili- 
 gence and care that men of ordinary prudence and skill 
 would exercise in the management of a similar business 
 for themselves. 
 
 The directors are not bound to examine the books of 
 the company, nor to investigate the mode of living of 
 their employees. But they are required to attend the 
 
110 
 
 ■SHAUKHOI-DEUS AND DIUECTOUS MAXIMAL. 
 
 (lii'cflors' iiiccliiins wiih rciisoiiiiltlr rr^iuliirily; to liavo 
 stiilcnu'iils of the Imsiiicss iiiiulc lo (licin; to object to 
 the (riinsiU'tioii of iniportimt husincKs without the know- 
 Icdjic iiiul consent of the board of (lire(;tors; to exiiniine 
 Avitli rejiscmabb' cai'e the reports and matters of business 
 brouj;ht before them; and not to shut tlieii- eves to 
 obvious objections to the business transactions and 
 {>:en(M'al condition of the coinpany, or to the character and 
 well-known rejtutation of the employeeH. Moreover, 
 wlu'n a director lujs knowh'dfjje that an umiutliori/.ed act 
 is beinj; done he cannot escape liability, however 
 innocent he may be, unless he j»revents that act by his 
 protest, or takes action to remedy the wrong. 
 
 M m 
 
 .* 
 
wn 
 
 CHArTKR 
 
 A. 
 
 CONVERSION OF r.ITSlNESS CONCERNS INTO 
 JOINT STOCK COMPANIES (^0- 
 
 1. Inducements to Conver- 
 
 sion. 
 
 2. ExAMi'i.Ks OF Casks of 
 
 CoNVEUSlON. 
 
 ;}. " One Man " Company. 
 
 4. PUEI.IMINAHY StE1»S TO- 
 WARDS Conversion. 
 
 To (■(tnvcrt n Itiisiiicss into a conii»iiiiy is a ]»lirnse 
 very coimiioiiiy used (o (Icsciilic concisely an airanj^c- 
 niont which involves the formation of a company nnder 
 tlie .Joint Sloclv Companies' Acts, for th(^ i)nrpo8e of 
 accjniiin}; and carrying on an existinj; business, and the 
 transfer to sucli com]iany of the business witli its assets 
 an<l liabilities. \\'hether the busim-ss beh iij^s to an in- 
 divi(bial or to a firm makes no dilTerence: ii. either case 
 the arranjjjement is, in <'ommon parlance, termed the 
 conversion of the business into a company. 
 
 ]. Inducements to Conversion. 
 
 Before describing; the mode of conversion we shall 
 j)r()ceed to point out some of the inducements which com- 
 monly lead to such conversions. 
 
 LliiiUcd litihihfij — There can be no doubt that the 
 great inducement to conversion is the power which the 
 Acts give to a person or to a tirni, converting his or their 
 business into a company, of trading with limited 
 liability. 
 
 It will be borne in mind that, at common law, a 
 person who goes into business, whether on his own 
 account or as jiartner in a linn, l)ecomes personally liable 
 for all the debts incurred in the business. He is liable 
 even for the fraud, negligence, or other wrongful act of 
 his partner or cleric in connection with the business. 
 
 (a) Parker's Shareholders' Manual. 
 
112 
 
 SlIAIir.llol.DKKS' AND 1)1 Hi:* TOIJS' MANTAf.. 
 
 = i 
 
 " If," Ha.v8 the law, "you want to trade you must risk all 
 you liav*'." Tlu' law will not alhtw hihIi a pcrsou to fix 
 ti limit to hiK liability. Foi' ('xanii)lo — 
 
 (a) Sup|»os(' a man to have |L'0,0()() invested in' liiH 
 buwinesH and f5,(M)() otlicrwiHc invested, lie desires to 
 limit his liability to the |1'I),(I(M>, so that it' tlu; business 
 fails the |r),00(> will not be liable to be taken to saiisfy 
 his business <i'e(lilors, the law will not allow such a 
 reservation. 
 
 (/>) Sui)j)ose a man Avith a fortune of I.IO.OdO be a 
 ])artner in a eoncern in which he has invested !i?r),t)00. 
 lie desires to limit his liability to the .fr),0()t». lie cannot. 
 If the firm fails, the whole of his fortune may be swept 
 away to pay the creditors, even thou}j;h tlu; failure nuiy 
 have been caused by the dishonesty or imprudence of his 
 j)artners, or of some i)ers()n in the employment of the 
 Urm. 
 
 {(•) Sujtpose A., 1?., and C. to enter into pri;i:nership 
 \i\)(ni an at^reement that each shall contribiite by way of 
 cai)ital .f2,(M)(), viz., |!1,(I0() down and .fl,(M)() when wauled, 
 and that the liability of each vo creditors shall be limited 
 to the auu)unt so agreed to tx ;ontributed. This attempt 
 to limit their liability is void as to outsiders; and if debts 
 are incurred, each partner will be liable " to his last 
 dollar and his last acre " to pry the creditors in full. 
 
 But the rigor of the comaion law has been relaxed 
 by the legislature, which luis .'uabled persons at a tritling 
 expense to escape from the burden of unlimited liability. 
 They have merely to coavert their business into a 
 limited company, under the. Joint Stock Companies' Acts, 
 and in exercise of the power given by tliose Acts, they 
 can i)lace such limit on their liability as the dictates of 
 prudence nuiy suggest. 
 
 These limited companies, in the words of the late 
 Master of the Kolls (Sir G. Jessel), one of the ablest of 
 English Judges, "are the offspring of a proved necessity, 
 that is, that men should be entitled to engage in com- 
 mercial pursuits without necessarily involving the whole 
 of their fortune in that particular pursuit in which :'.iey 
 are engaged." 
 
 Il!| 
 

 
 V 
 
 
 CONVERSION INTO JOINT STOCK rOMI'ANIEH. 
 
 113 
 
 
 
 2. ExAMi'i-Es OF Casks of Convehsion. 
 
 
 
 
 It may bo convcniont liore to givo a few examples of 
 cnnon (ommonlv occurring in ^vlli('h Itiisiiu'SH coiicrrns 
 art' convcrlrd into companies wilii a view to obtaininj^ 
 limited liability. 
 
 (a) A lirm consists of several members, each of 
 whom has accnmulalcd some [trivate means which he is 
 (lesirons of freeinj; from the nsk of trade. To elTect this 
 they convert the Itusiness into a company. 
 
 (/>) An individual or a tinn is engaj^cd in a ]»rofltablft 
 but s])e('ulative busin(>ss, out of the piolits of whi<'h lie 
 or they are enabled to nuike savinj^s. In order to 
 preserve these savings from risk the business is convert- 
 ed into a company. 
 
 (c) A lirm consists of several members, one of wluun 
 is entitled to the greater part of the capital, and also 
 has private means. He is disposed to retire on the 
 fortuTK' he has accumulated. If his liability could bo 
 limited, he would be willi;ig to leave part of his cajiital 
 in the business, and to assume the position of a sleeping 
 partner. This can be effected by converting the business 
 into a company, and it is accordingly done. 
 
 ((/) A man desires to leave his business after .lis 
 death in the hands of trustees in order that it may bo 
 carried on for the benefit of his family until his sons 
 attain the age of twenty-one years, lie finds that the 
 persons whom he wishes to app<unt trustees object to 
 undertake a trust which will involve them in unlimited 
 liability and nuiy prove I'uinous to them. Accordingly, 
 he converts the concern into a company, and the ditli- 
 culty is removed. 
 
 (c) The owner of a profitable business dies. There 
 are competent managers, but the owner's sons are not 
 inclined to devote tliemselves to tlie concern, or to incur 
 the unlimited liability involved in carrying it on througn 
 managers. Accordingly they convert it into a company. 
 
 W.S.D.M.— 8 
 
Ilil 
 
 II l!l 
 
 i|i|t|: 
 
 114 
 
 shareholders' and directors' manual. 
 
 (/) A capitalist is willing to supply a person or a 
 firm engaged in trade with additional capital in consid- 
 eration of a share of the profits, but does not wish to 
 incur the liabilities of partnership. He therefore 
 stijmlates that the business shall be converted into a 
 company. He will then bring in the additional capital 
 by taking shares in the company to the amount agreed 
 on, and paying for the same in cash. In such a case the 
 capitalist very commonly stipulates that he or his 
 nominee shall be one of the directors for a term of years. 
 And sometimes that the shares shall be preference 
 shares. 
 
 (r/) The owner of a patented invention is endeavor- 
 ing to develop it, but with insufticient means. He wants 
 to retain the jwitent, or a large interest in it, and person- 
 ally to Avork the concern. A capitalist is found, who is 
 willing to provide the necessary capital in consideration 
 of a share of profits, but he wants to have a voice in the 
 nmnagement, and is not prepared to incur unlimited 
 liability. Accordingly the concern is converted into a 
 company, and the owner of the patent and the capitalist 
 or his nominee become directors. The owner of the 
 patent receives fully paid-up shares, conferring a right 
 to the stipulated share of profits; and the capitalist takes 
 and pays up shares to the extent of the capital which he 
 is to bring in, 
 
 (//) Take the case of a manufacturer. By industry 
 and attention, for many years of his life, he has estab- 
 lished a successful business. The greater part, if not 
 the whole, of his means is invested in his business. He 
 has become advanced in years, and has a family for 
 whom he must make provision after his death. To with- 
 draw any substantial portion of his capital from the 
 business would be fatal to its success. To keep it as a 
 going concern is essential, as, once a manufacturing 
 business be stopped, the value of its plant and machin- 
 ery, as well as of its connection and good-will, is practi- 
 cally lost. If the busniess be carried on by a partnership, 
 this partnership, upon the death of a partner, becomes 
 
CONVERSION INTO JOINT STOCK COMPANIES. 
 
 lis 
 
 dissolved, and the capital of the deceased must even- 
 tually be withdrawn; and, unless the surviving partner 
 can procure some other person with capital to take the 
 deceased's })lace, the business must be sold out at a 
 ruinous siicriflee. In any case the continuity is broken; 
 the bankers and other creditors of tho business will not 
 generally continue the credit as before; and, for this 
 reason alone, many businesses have to be wound up 
 which are really in a healthy and prosperous state. 
 
 All this can be avoided if the business be trans- 
 ferred to a joint stock company. Tlie ca])ital in such a 
 company remains tixed, and cannot be withdrawn. The 
 unbroken continuity of the compa.iy continues, notwith- 
 standing death or other changes among the shareholders. 
 The good-will, which in many cases is a valuable asset, is 
 not interfered with, and each share in the company 
 benefits thereby. The individual's former capital in his 
 business is now represented by shares in the joint stock 
 company. These shares can be disposed of during his 
 lifetime, or by his will, and his family provided for with- 
 out injury to his business. 
 
 The same considerations apply to all kinds of mer- 
 cantile business as well as to that of manufacturers; and 
 men of advanced years, who, after a long, hard-working 
 a.nd useful life, are entitled to retire f^om active pur- 
 suits, are enabled by means of a joint stock company to 
 give up business and be freed from liability and worry; 
 something which they could not, in the majority of 
 cases, otherwise do. 
 
 3. " One Man " Company. 
 
 In a recent English case, Vaughan Williams, J., 
 and the Court of Appeal held, that where one man had 
 an overwhelming proportion of the shares of a com] any, 
 and the transaction was in other respects tainted with 
 bad faith, the individual shareholder might be person- 
 ally liable for the debts of the comi)any (a). But the 
 House of Lords has overruled this decision, and has held 
 
 (q.) Brodery v. Saloman, (1895) 2 Chancery Appeals, 323. 
 
116 
 
 shareholders' and directors' manual. 
 
 iB li 
 
 J I 
 
 I i 
 
 that if the company is incorporated according to law, 
 even if six of the shareholders hold only one share each 
 and the seventh holds twenty thousand, the court cannot 
 go behind the certificate of incori^oration and inquire 
 wliether or no such a " one man " company is what the 
 Legislature intended when passing the Companies' Acts. 
 It was expressl}' held by the House of Lords that the 
 company was duly formed and registered, and was not 
 the mere ** alias," or agent of, or trustee for the vendor. 
 And that there was no fraud upon creditors or share- 
 holders (a). 
 
 4. Prellminary Steps Towards Conversion. 
 
 We shall now proceed to describe the mode in which 
 a business is converted into a company, and, by way of 
 example, will take the case of the business of foundry- 
 men carried on b}' A., B., and C. in partnership, A. being 
 entitled to half the capital, and B. and C. each to a 
 quarter. 
 
 The first step is to ascertain the value of the busi- 
 ness. To arrive at this a valuation will be made of the 
 assets of the firm, including the good-will, the stock-in- 
 trade, business premises, moneys, bills, notes, and book 
 and other debts duo to the firm; and an account will be 
 taken of the debts and liabilities of the firm. The 
 valuation and account are sometimes made and taken by 
 the partners, and sometimes by some person appointed 
 by them. Very commonly the valuation and account are 
 not made or taken in a detailed manner, but the i)osition 
 is roughly estimated, regard being had to the last 
 balance-sheet. In the present case we will suppose that 
 the partners come to the conclusion that the assets are 
 worth 1100,000, and that the debts and liabilities amount 
 to 121,000; so that the net value of the business is 
 $79,000. 
 
 The next point is to settle the limit of liability 
 which the partners desire to fix, for on this depends the 
 most important term of the agreement. In many cases 
 
 (a) Saloman v. Saloman & Co., (18!i7) A. C. 22. 
 
CONVERSION INTO JOINT STOCK COMPANIES. 
 
 117 
 
 of conversion the owners of business concerns, whether 
 sole or in partnership, desire to incur no personal 
 liability to the creditors of the company; they are will- 
 ing to hand over the business with its assets and liabili- 
 ties to the company, but desire, if the company should be 
 unsuccessful, not to be under any i>ersonal liability to 
 pay its debts; they wish the remedy of the creditors of 
 the company to be exclusively against the ass^-ts of the 
 company. Where this is the desire of the parties, the 
 conversion must be effected on the footing that the 
 owner or owners shall receive the value of the business 
 in fully paid-up shares. Upon such shares there is no 
 personal liabilit} . They entitle the holder to votes and 
 dividends, but no call can be made on him. Sometimes, 
 however, a person may be willing, besides making over 
 his business or his share of a business to a company, to 
 incur a personal liability to a limited extent, e.f/., sup- 
 pose a man desires to convert his business, valued at 
 150,000, into a company, and is willing to incur a liability 
 to sui)ply 110,000 additional working capital if required; 
 in such case the conversion will be ctlected v a the foot- 
 ing that he shall receive 2,000 shares of f30 each, with 
 |25 per share credited as paid up: he will thus be liable 
 to pay up the balance of |5 per share — 110,000 — when 
 required, but will be under no further liability. 
 
 In the present case we will suppose that A., B., and 
 C. desire not to be under any personal liability, accord- 
 ingly- they will receive fully paid-up shares. 
 
 These important points h.aving been settled, the 
 forms necessary for incorporation as set out in Part II. 
 must be prepared. 
 
11 : 
 
PART 11. 
 
 ACTS OF THE DOMINION OF CANADA AND OF 
 THE PROVINCES THEREOF 
 
 KKSPECTING THE 
 
 INCORPORATION OF JOINT STOCK COMPANIES; TOGETHER 
 
 WITH INSTRUCTIONS FOR PROCURING LETTERS 
 
 PATENT THEREUNDER. 
 
H- 
 
 I 
 
 11 
 
 ONTARIO LEGISLATION. 
 
 GENERAL REMARKS. 
 
 By sections 4, 5, G and 7 of the new Ontario Com- 
 panies' Act, R. S. O., 1897, cap. 191, that Act is made to 
 ai)ply to every company lieretofore or hereafter incor- 
 ])orated by speciiil Act of the Legislature of Ontario for 
 piU'poses or objects within the scope of the Act. Tlie 
 provisions of tlie new Act affect a very hirge number of 
 companies hitlierto exempt from certain requirements 
 made upon companies incorporated under the general 
 Act, such as the fyling of by-laws increasing or decreas- 
 ing the number of directors, the making of annual re- 
 turns, etc., etc., and brings them more directly under 
 the control of the Lieutenant-Governor in Council. 
 
 A further important change is made in dispensing 
 with the giving of notice in the Ontario Gazette of ap- 
 plication for incorporation, except in cases where the 
 Lieutenant-Governor in Council directs that it be given. 
 
 The Provincial Secretary's Department is designated 
 by Order in Council under section 95 as the Department 
 through which the issue of letters patent, supplement- 
 ary letters patent and licenses under the Act shall take 
 place. 
 
 Parties having business to transact with that Depart- 
 ment will save time and trouble by paying attention to 
 the following directions. 
 
 All communications on official business should be 
 addressed to 
 
 The Honourable 
 
 The Provincial Secretary, 
 
 Toronto, 
 
^ / 
 
 (iENEllAL RKMAIIKS. 
 
 121 
 
 juul the posliijic iimsi be YU'rpaid. Lottors marked (). II. 
 ^1. H, are usually sent to (he Dead Letter Oflice. 
 
 The forwardhiji: of any paper should always be ac- 
 companied by a letter, each letter sho,uld hv confiued to 
 one subject, the post office address and date should be 
 ji^lven, and the sif^nature distinctly written. 
 
 It is particularly recommended that reference should 
 be made to the law, where accessible, before writiu}; on 
 any subject to the Deparhueut, in order to avoid un- 
 necessary explanations and useless loss of tinu' and 
 labour. 
 
 It must l)e remembered tliat the bet("r papers are 
 executed, the s< toner the work is dispatched at the oflice. 
 
 Petitions and documents jjrepared upon paper of a 
 size larger than foolscap will be returned, as they can- 
 not be conveniently filed away in the D(!partmental 
 letter cases. 
 
 The Ontario Companies' Act declares tliat no steps 
 shall be taken in any Department towards the issue of 
 any letters patent or su}»i)lementary letters jiatent aiitil 
 after all fee >^ therefor have been duly paid. 
 
 Cash remittances must be made by registered letter, 
 or they are at the risk of the sender. Post oflice orders, 
 accepted bank cheques and drafts must be drawn pay- 
 able to the order of the Provincial Treasurer, Toronto, 
 Ontario. Cheques not " marked " are liabh? to be 
 returned. 
 
 The following rules are published for the guidance 
 of advertisers in Tlie Ontario Gazette: 
 
 Parties sending advertisements to be inserted in the 
 Ontario Gazette will please observe the following rules: 
 1st. Address The Ontario Gazette, Toronto. 
 
 2nd. Write advertisement plainly and state number 
 of times it is to be inserted. 
 
 3rd. Immediately on receipt of bill for charges, ad- 
 vertisers must remit amount. This rule must be strictly 
 observed, otherwise the advertisement will be cancelled. 
 
122 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 4th. No advert isonu'nt will be inserted while any 
 portion of a previons one from the same party remains 
 unpaid. 
 
 5th. The Oazelie 18 published every Saturday and 
 all advertisements must reach tho office before Friday 
 noon, and none will be received later, for the week's 
 issue. 
 
 Gth. Subscription price of Ontario Qazette is |4.00 
 per annum, invariably in advance, and at expiration of 
 time paid for it will be stopped without notice. 
 
 Tth. Extra co])ies, IQ cents each. 
 
 8th. One copy of the Gazette will be sent each week 
 the advertisement appears, and will be intlvided in bill 
 of charges. 
 
 The followin}? fees are usually charged for taking 
 affidavits in Ontario: 
 
 Notaries are entitled to |1. This includes oath, 
 certificate and seal. If the notary draws the atfidavit 
 he can charge also for it. 
 
 Commissioners are entitled to twenty cents, unless 
 in cases where the statute specially states that they are 
 entitled to twenty-five cents. This charge generally in- 
 cludes the preparing of the atfidavit. 
 
 Justices of the Peace are entitled to twenty-five 
 cents. This includes the drawing up of the affidavit ; 
 they are, however, entitled to this amount even if they 
 do not draw the atfidavit. 
 
CHATTER 191. 
 
 REVISED STATUTES OF ONTARIO, 1897. 
 
 An Act respecting the Incorporation and Regula- 
 tion of Joint Stock Companies. 
 
 Short Title, h. 1. 
 
 Intfrpketation, 8, 2. ■ 
 
 Application of the Act : 
 
 To companies hereafter incorporated by letters patent, s. 4. 
 To companies heretofore incorporated by letters patent, s. 5. 
 To companies heretofore incorporated by special Act, s. 6. 
 To companies hereafter incorporated by special Act, s. 7. 
 Cap. 156, R. S. O. 1887, not to apply to future companies, s. 8. 
 
 Incorporation of Companies by Letters Patent. 
 
 Objects for which incorporation may be granted, s. 9. 
 
 Applicants must be twenty-one years of age, s. 10. 
 
 Name of company must be free from objection, s. 10, s.-s. (a). 
 
 Word " Limited " must be the last word in each name, s. 10, s.-s. (a;. 
 
 Memorandum of Agreement must be executed in duplicate, s. 10, 
 s.-s. (2). 
 
 The Governor-in- Council may make regulations as to notice, etc., 
 8. 11. 
 
 The Governor may give a company any name and vary its powers, 
 s. 14. . 
 Amalgamation of Companies. 
 
 Two or more companies may amalgamate, s. 103, et seq. 
 Existing Companies may apply for extendeij powers, s. 105. 
 Re-incorporation of incorporated Companies, s. 104. 
 Extra-Provincial Companies. 
 
 Extra provincial companies may be licensed, b. 107. 
 
 If licensed, must appoint an attorney, s. 107, s.-s. (2). 
 
 Must make annual returns, s. 107, s.-s. (5). 
 
 License may be revoked, s. 107, s.-s. (7). 
 
124 
 
 SHAUEHOLnERS' AND DIUECTOUS' MANUAL. 
 
 I < 
 
 Annual, Genbual, SpEcuii and First Meetings. 
 
 Mectin({ for organization to be held within two montlis, b. 1G. 
 Notice to be (^ivon of (vnnual and j^eneral meetinj^s, b. 50. 
 Annual meetint; to be lield on fourtli Wednesday in January, a. 61. 
 Special meetings called by directors or by shareholders, ss. 52-57. 
 
 Annual Statement and Scmmauy, 
 
 Annual statement of income and expenditure, s. 78. 
 
 Annual summary, s. 79. 
 
 Cojjy of summary must be posted in the company's office, s. 7i>, s.-s. 
 
 (7). 
 A second copy must be sent to the Provincial Secretary, s. 79, s.-s. 
 
 (7)- 
 Penalty for def ult, s. 79, s.-s. (8). 
 
 Proviso as to inactive companies, s. 79, s.-s. (10). 
 
 Audit, 
 
 Accounts may be audited, s. 87. 
 Appointment of auditors, ss. 88-94. 
 
 Books to be Kept and What to Contain. 
 Books of record to be kept, s. 71. 
 Penalty for false entries, s. 72. 
 Rectification of books, s. 73. 
 When and to wliom books are to be open, s. 74. 
 Penalty for refusing to allow inspection, s. 75. 
 Books to be prima facie evidence, s. 7(). 
 Books of account, etc., to be kept, s. 77. 
 Minutes of proceedings to be kept, s. 77. 
 Books and records to be kept at head office, s. 10, s.-s. (c). 
 
 Capital, Shares, Etc. 
 
 A company may alter its capital or re-divide its shares, ss. 17-21. 
 A company may create preference stock, s. 22. 
 
 DiUECrORS AND THEIR PoWEUS. 
 
 Provisional directors to act until successors elected, s. 41. 
 
 Directors must be stockholders and not in arrears, s. 42. 
 
 Election of directors and flllmg of vacancies, s. 43, s.-ss. (1), (2) and 
 
 (3). 
 Number of directors may be increased or decreased, s. 45. 
 Powers and duties of directors, s. 46. 
 
 Liability for transfer of shares to insufficient person, s. 28. 
 Directors of insolvent company not to declare dividend, s. 83. 
 Directors not to make loans to shareholders, s. 84. 
 Directors liable for wages, s. 85. 
 
 Fees, Etc. 
 
 Regulation and payment of fees, s. 95. 
 Prepayment of fees compulsory, s. 95, (8). 
 
ACT UESPECTIN(J JOINT STOCK COMPANIES. 
 
 125 
 
 FORFEITUIIE OR BritUKNIiKU OF A CllAKTr.R. 
 
 Forfeiture witliiii two years by non-uaer, 8, 98. 
 
 Ilevocatioii for civuho, s. !»!». 
 
 Penalty for carryiiif^ on business with less than live shareholders, s. 
 
 100. 
 Voluntary surrender of a charter, s. 101. 
 Company nuiy bo wound up, s. 8(). 
 Inspkctoiis. 
 
 May be appointed by a Jud({e, a. 80. 
 
 May be appointed by the company, s. 80, (2). 
 
 LlAIlII.ITY KOll FaI.SK StATKMENTS. 
 
 False returns, etc., s. 1(7. 
 " Limited," How the Wouu jicst he Used. 
 
 Must be the last word in the name of every company, s. 10, a. -s. («). 
 
 Word must not be abbreviated and must bo lej^ible, s. iJiJ. 
 
 Word must be used in all noticics, invoices, etc., s. '23. 
 
 Liability of directors for default ; Penalty, s. 23, a.. ss. (2), (-1) and (.')). 
 
 Provisions as to companies not carried on for tjain, s. 23, s.-s. (O). 
 Limited Liaiulity on Shaues. 
 
 Liability of shareholders to creditors, s. 37. 
 
 Trustees not personally liable, s. 38. 
 
 Mortgagees not personally liable, s. 31). 
 
 Name — How Ohanoed. 
 
 Objectionable name may be chanfjed by the Lieuteu.vnt-Governor in 
 Council, s. 21. 
 
 Notices, StJijioiJS, Actions, Etc. 
 
 Copy of by-law, under seal, to be prima facie evidence, s. 00. 
 Writs, etc., may be signed by director, etc., s. 07. 
 How notice may be served, a. 08 ; and Proof of service, s. 09. 
 Action may be maintained between company and shareholder, s. 70. 
 
 Powers of Companies. 
 
 Powers on incorporation, s. l.j. 
 
 Incidental powers flowing from incorporation, s. 25. 
 
 Proviso as to land, s. 25. 
 
 Borrowing powers, s. 49. 
 
 Power to issue bonds and debentures, s. 49, s.-s. (c). 
 
 Power to mortf;age property and rights of company, s. 49, s.-s. (il). 
 
 Power to take stock in other companies, s. 82. 
 
 Power to make contracts, etc., a. 81. • 
 
 Extension of powers of companies incorporated by letters patent, 
 
 s. 102. 
 Extension of powers of companies incorporated by special Act, s. 104. 
 Power to vary by-laws passed by directors, s. 47. 
 To reject by-laws for the payment of the president or any director, 
 
 a. 48. 
 
"I 
 
 126 HHAUEHOLDEUS' AND DIRECTOKS' MANUAL. 
 
 Stock, Calls, Etc. 
 
 Allotment of stock, a. 26. 
 Stock deeined to be personal estate, s. 27. 
 Transfer of shares in arrears may be refused, 8. 28. 
 • Transfer of shares valid only after entry, s. 2y. 
 
 Restriction as to transfer, s. HO. 
 
 Trusts in respect i shares not binding on company, s. 31. 
 Callin({ in instalments, s. 82. 
 
 Ten per centum must be called the first year, a. 33. 
 Enforcement of payment of calls, s. 84. 
 Forfeiture of shares, s. 3."). 
 
 Trustees and mortgagors may vote on shares, s. 30. 
 How joint holders of stock may vote, s. 3(5, s.-s. (2). 
 Payments on shares on incorporation of company, s. 10, s.-s. (8). 
 Purchase of stock in other corporations, s. 82. 
 
 Ill 
 
 II I I 
 
 !fi I 
 
 
 Short title, 
 
 Interpreta 
 tiou. 
 
 "Judge." 
 
 " Letters 
 patent;" 
 
 ' Proxy." 
 
 " Real es- 
 tate," 
 
 "Land;" 
 
 HEK MA.JESTY, by and wilh the advice and consent 
 of the Legishuive Assseniblj of the Province of 
 Ontario, enacts as follows: 
 
 1. This Act may be cited as " 'fhe Ontario Com- 
 'panieH Act." 
 
 2. Where the words following occur in this Act, or 
 in any letters i)atent and supjileinentary letters patent 
 issued under this Act, they shall be construed in the 
 manner hereinafter mentioned, unless a contrary inten- 
 tion appears: — 
 
 («) "Judge" shall mean one of the Judges of the 
 High Court of Justice. 
 
 {h) " Letters patent " shall mean the letters patent, 
 under the (Jreat Seal of Ontario, incorporating or re- 
 incorporating a company, as the case may be; for any 
 purpose within the scope of this Act. 
 
 (c) '' Proxy " shall mean any person representing an 
 absent shareholder and duly authorized, in writing, to 
 act for him at a meeting of the company. 
 
 {(J) " Real estate " or " land " shall include all mes- 
 suages, lands, tenements, leaseholds and hereditaments 
 of any tenure and all immovable real property of every 
 kind. 
 
 1 i 
 
AIM'LICATION OF THE ACT. 
 
 127 
 
 (f) ** Sliiir«'li(>hl«'i'" shiill iiK'iUi ev<M\v wn]»H(rnH*i- to, "Hiiaro- 
 or liohlcr of stock in the coinpjiuy, and .sliall extend to " ' 
 and include tlie iternoual lepieseutativeH of the sliare- 
 holder. 
 
 (f) " Snjiplenientary letters patent" sliall mean any "Supiiiu 
 letters patent, under the (treat Seal of Ontario, jjranted Hitters'^* 
 to a ecunpany subsequ<*nt to the letters patent incorpo 
 rating or r<* iiu;or[)oriitin}i; the company; 
 
 (_(/) "The (Jazette" sliall mean Tlut Ontario Gazette 
 
 Ai'i'LicATioN OF Act. 
 
 pati'tit ;" 
 
 " The 
 0(izette:< 
 
 li. No company shall hereafter be incorporated under incorponv- 
 2^lte Ontario Joint Stock Companies Letters Patent ^c^, cllulpanies 
 and the amendments thereto, being chapter 157 of the imteut.*"** 
 Revised Stilt utes of Ontario, 1S.S7, and chapter VM) of 
 these lievised Statutes. 
 
 4. The incorporation of every company hereafter by Act to ap- 
 letters patent sliiill be governed by tJiis Act, and all the {lanies'^""' 
 provisions of this Act shall apply to every sucli coiiij)any, incorpomt- 
 f<ubject to the provisions of any general Act applying to toiHimtem. 
 the company. 
 
 a. The provisions of sections 17 to 105, inclusive, sections 
 shall apply to every company incorporated before the i>iy to com- 
 13th day of April, 1897, by letters patent issued under corpoiatld 
 the authority of an Act of the Legislature of Ontario, i»iteiit*'be- 
 subject to the provisions of any special Act or general A"/)rii,'i«>7. 
 Act applying to the comi)any, other than said chapter 
 157 of the Revised Statutes of Ontario, 1887, and the 
 amendments thereto. 
 
 u 
 :o 
 
 [9 
 
 O. The provisions of section 17 to 97, inclusive, and sections 
 sections 10;{ to lOG, inclusive, shall apply to Qxavy com- Jny to'coVu- 
 panj' incori>orated on or before the 13th day of April, 'orjloratod 
 '1897, by special Act of the Legislature of Ontario for fore isth 
 purposes or objects within the scope of this Act, except oy special 
 
 Act 
 
 such provisions as are inconsistent with the provisions 
 of the special Act or amending Acts, or other special 
 Acts relating to the company 
 
128 
 
 SHAUKHOLDEIIS AN'D DIKFCTORS MANUAL, 
 
 f 
 
 ■;¥. ' 
 
 ^r ^^^1 !^ 
 
 
 w°fich"ai) '^' '*''''' ]»r()visions of S(>etlons 17 to 07, inclusive, jiiul 
 
 'mnfeHln'"' ^^'ctloiis 10;{ to lOG, iuflusivt', jsliall. subjc'ct to any varia- 
 
 «'j'n>"nito.i ^i,)ijs and exceptions by the special Act, ajjply to every 
 
 b*'s ')'e ^ai'' <*'"'P'iiiy incorporated after the 18th day of A]nil, 1S1)7, 
 
 Act. by special Act of the Legislature of Ontario for purposes 
 
 or objects wi hin the scope of this Act, and the said 
 
 I)rovisions, subject as aforesaid, sliall form part of the 
 
 special Act and be construed together therewith as one 
 
 Act. 
 
 ij^v.stat. ^. r|.|,^, provisions of T/te Or,l((ri<> Joint Stock Co)ii' 
 
 appivV Pf^t'^i'^^' General Clauses Act, being chapter 15G of the 
 Sto'i- -^^^'^^^^^ Statutes of OntPrio, 1887, and chapter 189 of 
 ]':uir\mii tli^'^*^' Revised Statutes, shall not apply to any company 
 i«'7..W ' incorporated after llic^ VM\\ dav of April, 18n7. bv special 
 
 Act of (1k' Legislalure of Ontario for any of the purposes 
 
 or objects within tlie scope of this Act. 
 
 Incoiu'ouation ijv Lettkhs Patent. 
 conii.aiiios «>. The LieutenautGovemor in Council may, by 
 
 foniu'il for , 1. ' 
 
 cortain letters patent, grant a, charter to any number ot persons, 
 may be in- not less than fivc, who petitiiui th( r(>for, creating and 
 iiyiettors constituting suci. pei'soiis and any others who have be- 
 come subscribers to the memorandum of agreement, a 
 body corjjorate and politic for any of tlie purposes or 
 Kev. Stat., objects to wliich the legislative authoritv of the Legis- 
 
 8 205. ' ' 
 
 lature of Ontario extends, except the construction and 
 working of railways, the business of insurance and the 
 business of a loan corj»oration within the meaning of 
 Tke Loan Corporations Act. 
 
 The power hereby given Ih entirely discretionary. Althouj^li all the 
 re(iuirements ot the law have been complied witli, the charter may be 
 refused. There is no absolvite ri(^ht to claim the grant of Letters Patent. 
 Wlien the charter is granted it is on the express condition that it nuiy 
 bo revoked by the Lieutenant-Governor in Council on sutficient grounds 
 being shown, such as fraud, continued niismana/jement, engaging in 
 improper objects or works, and generally such conduct as may be deemed 
 injurious to the public interest. All charters are subject to revocation, 
 but in order to call the attention of the corporators more directly to the 
 point, a clause is now introduced expressly stating this fact. 
 
 No conditions as to any of the applicants being residents of the 
 Province of Ontario arc imposed by this or any other section of the Act. 
 
INCORI'ORATION BY LETTERS PATENT. 
 
 129 
 
 Ol' 
 
 the 
 
 bo 
 
 tent. 
 
 ds 
 
 l\n 
 
 « 1" 
 
 lined 
 
 It ion, 
 the 
 
 the 
 I Act. 
 
 It is undesirable tliat tlie number of applicants be larf,'e, as this 
 causes difticulty in the preparation of the papers. 
 
 The British North America Act provides that the Legislature of 
 Ontario may exclusively make laws in relation to matters coming within 
 the followinj^ classes of subjects : 
 
 Hec. 'J'2, Sub-sec. 10. Local works and undertakings other than such 
 as are of the following classes: . 
 
 (rt) Lines of steam or other ships, Railways, Canals, Telegraphs 
 and other works and undertakings connecting the rrovinces 
 or extending beyond the limits of the Province ; 
 
 (li) Lines of steam ships between the Province and any British or 
 Foreign country ; 
 
 ((■) Such worlds as although wholly situate within the Province, 
 are before ov after their execution declared by the Parlia- 
 ment of ("anada to be for the general advantage of two or 
 more of the Provinces. 
 
 Sub-sec. 11. The incorporation of companies with provincial objects. 
 
 Sub-sec. 1(). Generally all matters of a merely local or private 
 nature in the Province. 
 
 Forms fou Obtaining Incoiipouation iiy Letteiis PxTErr. 
 
 Petition for letters patent Form No. .'t. 
 
 Affidavit verifying petition and as to name of Company " 0. 
 
 Power of Attorney to sign petition, etc., etc. - - "7. 
 
 Affidavit verifying power of Attorney ... •> h. 
 
 Affi(Uivit verifying signatures to petition ... •< <). 
 
 Affidavit verifying signatures to petition when signed 
 
 under a I'ower of .attorney .... "10. 
 
 Memorandum of Agreement and Stock Book - . "11. 
 
 Affidavit verifying signatures to Memorandum of Agree- 
 ment and Stock Book "12. 
 
 lO. (J) The applicants for incorporation, who must Petition, 
 be of the full age of twenty-one years, may petition ^ 
 the L'.eutenant-Goveriior, through the l*rovincial Secre- 
 tary, for the issue of letters patent. The petition of the 
 applicants shall show: 
 
 ia) The ])ropose(l corporate name of the • .•ompany NHmotobo 
 with the word "Limited" as the last word tin reof ; and objectiou'. 
 such name shall not on any public ground be object i(Ui- 
 able, and shall not be that of any known company, in- 
 corporated or unincorporated, or of any partnership, or 
 
 ' See Form No. 5, pout. 
 
 W.S. I)..M. — !) . . 
 
I; I \\ 
 
 Ir! 'i 
 
 I 
 
 '^' 
 
 •I ; 
 
 130 
 
 Object. 
 
 Head-office 
 ami place 
 of service. 
 
 f ] 
 
 SHAREHOLDERS' AND DIRECTORS MANUAL. 
 
 individual, or any name nndoi* wliidi any known bnsincHs 
 is being carried on, or so nearly resembling the same 
 as to deceive; provided, however, that a subsisting com- 
 pany, or partnership, or individual, or the person carry- 
 ing on such business may consen. that such name, in 
 whole or in part, be granted to the new company. 
 
 Name. — The name shoul " be as short as possible consistent with 
 expressint^ generally the nature of the company. The name of the Pro- 
 vince of Ontario, or of some locality therein, should constitute part of 
 the name of every company. In selectiufj the style and title for a com- 
 pany, it is desirable that the name of the place where its head office is 
 located should form part of its name. This provision has repeatedly 
 proved, for obvious reasons, to have been adopted in the interest of all 
 concerned. 
 
 The name of a company should indicate its object. 
 
 The name of a company must not include any word indicative of 
 more than provincial objects. For this reason, such words as " Canada," 
 •'Canadian," "Dominion," "Nation," "National," "International," 
 " Empire," " Imperial," p".d the like are objectionable. For the use of 
 the words "Royal," or "The Queen," the express consent of Her 
 Majesty is requisite. 
 
 The proof as to the proposed corporate name not beinf^ open to 
 objection nor that of any other company, ouj^ht to be stated on the know- 
 led>,'e and bolief of one of the applicants, a resident of this Province, or 
 by a resident attorney or agent. The statement should be verified.' 
 
 (/>) The objects, sim])ly stated, for which the com- 
 pany is to be incorporated. 
 
 Object. — This may be any object within the legislative authority of 
 the Legislature of Ontario except the construction and working of rail- 
 ways, the business of insurance and the business of loan and other com- 
 panies under tiie Loan Corporations Act. The deiinition of the powers 
 sought should be clear and concise. It is now contrary to the policy of 
 the government to grant a company power to carry on more than one 
 business under one charter ; it is therefore the practice of the Depart- 
 ment so to limit them, unless a special case is sliowu for allowing a 
 plurality of objects connected with one another. 
 
 (c) The place within the Province of Ontario where 
 the head office of the company is to be situated, and 
 where its principal books of account and its cori)oration 
 records are to be kept and to which all communications 
 and notices may be addressed. 
 
 ^ See Form No. 6, post. 
 
 lii 
 
INCORI'ORATION HV LETTERS PATENT. 181 
 
 Head Office, — This may, or may not, be at the same phice as that at, 
 or from, which the operations of the Company are to be carried on, thus, 
 a company carrying on its operations in the District of Alf^cma may 
 liave its chief place of buginens (i.e., head office) in the City of Toronto. 
 
 {(I) The amount of capit.il stock of the company; capital. 
 
 (e) The number of shares and the amount of each suaros. 
 share; 
 
 (/) The name in full, the place of residence and the Nam.^s of 
 calling of each of the applicants, 
 
 (r/) The number, not less than three, of the board of uiroutors. 
 directors, and the names of the applicants, not less than 
 three, Avho are to be the provisional directors of the 
 company. 
 
 The directors must be shareholders, owning stock absolutely in their 
 own right. The petition should state the intended number of the direc- 
 tors of the Company after it has been organized, and tlie names of the 
 directors who are to be mentioned in the Letters Patent and to act until 
 the permanent board, according to such intended number, has been 
 elected. 
 
 This sub-section contemplates the addition up lo the number men- 
 tioned in the letters patent, if such be thought necessary or advisable, 
 of desirable persons to the board, after the company h.is been organized, 
 without the delay and formality re<]uired by section -l,"), sub-section 1. 
 
 (2) The petition may be similar to, but in its esson Petition. 
 tial features shall comi»ly with, Schedule '' li " to this 
 Act, and shall be accomi)auied by a memorandum of »'<■"'" "f 
 :ij,a'eement, executed in duplicate, which may be similar 
 to, but which shall in its essential features comply with 
 Schedule "A" to this Act. 
 
 Tlie petition, which may under ordinary circumstances be put in at 
 any time without notice, must state : — 
 
 The amount each applicant has subscribed in the Memorandum of 
 Agreement and Stock-Book. 
 
 The petition must further show : — 
 
 That no public or private interest will be prejudicially affected by 
 incorporation, if such be the fact. 
 
 It should be signed by each of the applicants personally, but if, iu 
 any case, it is signed by attorney, it should be accompanied by the 
 Tower of Attorney, which must be of a specific and not of a general 
 character and duly executed and verified. Petitioners will use their 
 ordinary signatures. Each signature must be witnessed and verified by 
 
132 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 W. I ': 
 
 : 
 
 ;i : 
 
 Payment8 
 ou fcihares. 
 
 Petitioners 
 to be bona 
 fide sub- 
 scribers for 
 shares. 
 
 Power to 
 make gen- 
 eral re^ula- 
 tiuiis as to 
 notice, etc, 
 
 Prelimin- 
 ary condi- 
 tions to be 
 established 
 
 an affidavit made by the witness thereto. Blank Forms of Petition may 
 be obtained on application to the Secretary's Department, Toronto. 
 
 (3) In case any amount has been paid in, on shares 
 taken, by transfer of property to a trustee, the Provincial 
 Secretary may require such evidence as shall be satis- 
 factory to him of such transfer and of the kind, nature 
 and value of the property and the manner in which, and 
 the person or persons or corporate body by whom the 
 property transferred, or any other payment, is held in 
 trust for the company with a view to its incorporation. 
 
 (4) Each i^etitioner shall be the bona fide holder in 
 his own right of the share or shares for which he has 
 subscribed in the memorandum of agreement. 
 
 (5) The petition may ask for the embodying in the 
 letters patent of any provision which, otherwise under 
 this Act, might be embodied in any by-law of the com- 
 pany when incorporated. 
 
 11. The Lieutenant-Governor in Council may, from 
 time to time, make regulations with respect to the fol- 
 lowing matters, viz.: 
 
 (a) The cases in which notice of application for 
 letters patent or supplementary letters patent under tliis 
 Act must be given; 
 
 Under the practice of the Department no notice is now required if 
 the applicants are able to swear that no public or private interest will be 
 prejudicially affected by their incorporation. 
 
 {h) The granting to one company power to carry on 
 more than one kind of undertaking; 
 
 (c) The forms of letters patent, supplementary letters 
 patent, licenses, notices and other instruments and do\u- 
 ments relating to applications and other proceedings 
 under this Act; 
 
 (rf) The form and manner of the giving of any notice 
 required by this Act ; 
 
 and such regulations shall be published in Tlie Gazette. 
 
 12. Before the letters patent are issued, the api)li- 
 cants shall establish to the satisfaction of the Provincial 
 
INCORPOUATION HV LETTEllS PATENT. 
 
 133 
 
 Secretary, or such other oflicer as may be charged by him 
 to report thereon, the sufficiency of their memorandum 
 of agreement and petition, and show that the proposed 
 name is not open to objection under section 10 of this 
 Act. 
 
 The proof that the corporate name is not that of any other known 
 incorporated or unincorporated company ouf^ht to be made by the 
 affidavit of one of the applicants, a resident of this Province, or by a 
 resident attorney or agent. From the nature of the subject such 
 affidavit cannot be positive and should be expressed to be made to the 
 best of the knowledj^e of the declarant. 
 
 13- (1) The Provincial Secretary, the Assistant Pro- Proof of 
 
 iiiatterH 
 
 vincial Secretary, or such otlier officer may for tlie pur- under this 
 poses aforesaid, or for any otlier purpose under this Act,' 
 take any requisite evidence in writing under oath, or 
 affirmation. 
 
 (a) Proof of any matter which may be necessary to 
 be made under this Act, may be made by statutory de- 
 claration, or hy affidavit, or by deposition before the 
 Provincial Secretary, or Assistant Provincial Secretary, 
 or other officer as aforesaid, or before any justice of the 
 peace or commissioner for taking affidavits or notary 
 public, wiio, for this pui^pose, are hereby authorized and 
 empowered to administer oaths or to take affirmations. 
 See ante for fees allowed Justices, etc., etc. 
 
 14. The Lieutenant-Governor may give to the com- Na.iie and 
 pany a corporate name wholly or partially different from powers of 
 the name proposed by the a])plicants in their petition, may be'* 
 and may in the letters patent vary the powers of the^*"*"' 
 company from the powers stated in the petition. 
 
 15. Notice of the granting of the letters patent Notice of 
 shall be given forthwith by the Provincial Secretary in terspatent' 
 The Oazdfe, and from the date of the letters patent the 
 
 l)etiti oners and the persons who signed the memorandum 
 of agreement and their successors, respectively, shall be 
 a corporation by the name mentioned in the letters 
 patent and shall be invested with all the powers, privi- 
 leges and immunities which are incident to such corpora- 
 
iidl 
 
 'I 
 
 i ^i 
 
 'i M 
 
 •I ■ I 
 
 134 
 
 SHAREHOLDERS AND niREHTOltS MANUAL. 
 
 tion, or exprossotl or indiulod in the letters patent and 
 Rev. Stat., I'/if, lnferj)refation Act, and which are necessary to carry 
 into etTect the intention and objects of the letters patent 
 and such of the provisions of this Act as are applicable 
 to the conii)any. 
 
 This notice is inserted in the Gaz'.tte without charge to the appli- 
 cants. 
 
 MeetiiiR of 
 company 
 for organi- 
 zation. 
 
 IncreaRe of 
 capital. 
 
 First Meeting (a). 
 
 16> (1) The provisional directors of the company 
 shall, by a registered letter addressed to each share- 
 holder, call a fjcneral meeting of the company to be held 
 within two months of the date of the letters patent, for 
 liie ]turi)ose of organizing the company for the commence- 
 ment of business. Such first general meeting sluill be 
 held at such convenient i)lace as the directors may de- 
 termine. 
 
 (2) If the said meeting is not called by the jjro- 
 visional dii-ectors within the time required by this sec- 
 tion, any three or more shareholders in the com])any 
 shall have jiower to call the meeting and to i)roceed to 
 the organization of the company. 
 
 Cai^ital, Shares, Etc. 
 
 17. (1) The comf)any at any time after nine-tenths 
 of the capital stock of the company has been subscribed 
 and ten per centum thereon paid in, but not sooner, may, 
 by by-law (?>), ])rovide for the increase of the capital stock 
 of the company to any amount which it considers re- 
 quisite for the due carrying out of the undertaking of 
 the compan}'. 
 
 (2) The by-law shall declare the number and value 
 of the shaies of the new stock, and may prescribe the 
 manner in which the same are to be allotted; otherwise, 
 the control of such allotment shall vest absolutely in the 
 directors. 
 
 (rt) See section oO for Annual and other Meetings. 
 (U) Form 13, post. 
 
CAPITAL, SHARES, ETC. 
 
 FouMs TO Inckeare the Capital Stock. 
 
 By-law providinfj for increase Form No. 13. 
 
 Affidavit verifying same aud provinfi sanctioning tliereof.. " 14. 
 
 By-laws of company refjulating callint? of general meetings " 1."). 
 
 AHidavit verifying by-laws as to calling of general meetings " 10. 
 
 Notice in local newspaper calling a general meeting " 17. 
 
 Affidavit proving due calling of meeting and verifying 
 
 notice in local paper " 18. 
 
 Notice in Ontario Gazette calling a general meeting " 17. 
 
 Affidavit proving due calling of general meeting where no 
 by-law for the purpose has been passed and verifying 
 
 notice in local paper and Ontario dazette " 1!(. 
 
 Petition for Supplementary Letters Patent " 20. 
 
 Affidavit verifying signatures to petition " 21. 
 
 Affidavit respecting bona fide character of increase " 22. 
 
 \H. (1) The company, if it sees fit at any time, may 
 by by-law provide for the decrease of tlie capital stock 
 of the companj' to any amount which it may consider 
 sufticient for the due cariyiuif out of the undertaking of 
 Ihe company' and advisable. 
 
 (2) The by-law shall declare the number and value 
 of the shares of the stock as so decreased; and the al 
 lotment thereof, or tin? rule or rules by which the same 
 is to be made. 
 
 (\\) The liabilit}- of shareholders to persons who are, 
 at the time the stock is decreased, creditors of the com- 
 pany, shall reuuiin as though the stock had not been 
 decreased. 
 
 To Decrease the Capital Stock. 
 
 The same forms ara necessary as for increasing the capital, and 
 those given for that purpose may be adapted. 
 
 1!>. The company may at any time, by by-law, pro- 
 vide for the re-division of the existing shares into shares 
 of smaller or larger amount. 
 
 tJO. No b3-law for increasing or decreasing the 
 capital stock of the coinpan}-, or re-dividing the shares, 
 shall have any force or effect whatever unless and until 
 it has been sanctioned by a vote of not less than two- 
 thirds in value of the shareholders at a general meeting 
 of the company duly called for considering the by-law, 
 and has afterwards been confirmed by supplementary 
 letters patent. 
 
 135 
 
 Retluction 
 of capital. 
 
 By-law for 
 that i)ur- 
 posi'. 
 
 Liability 
 of sliave- 
 lioUiors on 
 decrease. 
 
 Ko-division 
 f shares. 
 
 Ry-laws to 
 be con- 
 firmed by 
 supple- 
 mentary 
 letters 
 patent, 
 
li^ 
 
 f 
 
 11 \ 
 
 
 1: 
 
 186 
 
 Petition 
 for Hupple- 
 uioutary 
 letters 
 patent. 
 
 By-law, 
 etc., to 1)0 
 produced 
 with peti- 
 tion. 
 
 Granting 
 of supplo- 
 nientary 
 
 letters 
 patent. 
 
 Notice 
 thereof. 
 
 Efifect of 
 such let- 
 ters patent 
 
 SHAHEHOLDKHS' AND DlHECTOHs' MANTAL. 
 
 a I. (1) At any time not more tliau six months after 
 the sanction of such by law, the company may peti- 
 tion the Lieutenanit-Governor, through the Provincial 
 Secretary, for the issue of supplementary letters patent 
 to confirm the same. 
 
 (2) With the petition the company shall produce the 
 by-law and establish to the satisfaction of tlu? Provincial 
 Secretary, or of such other olticer as may be charj^ed by 
 him to report thereon, the due passage and sanction of 
 the by-law, and if the petition is in respect of the in- 
 crease or decrease of capital, the bona tide character of 
 the increase or decrease of capital thereby provided for. 
 
 (3) Upon due proof so made, the Lieutenant-Gover- 
 nor in Council may by supplementary letters patent con- 
 firm the by-law, and, witli respect to an increase or de- 
 crease in capital, may, with tlie consent of the company, 
 by the supplementary letters patent, fix the amount of 
 such increase or decrease at such sum as to him may 
 seem proper; and notice thereof shall be given forth- 
 witli by the Provincial Secretary in Tlte Gazetfe; and 
 thereupon, from the date of the supplementary letters 
 patent, the shares shall be re-divided, or the capital stock 
 of the company shall be and remain increased or de- 
 creased, as the case may be, to the amount, in the 
 manner, and subject to the conditions set forth by such 
 by-law and supplementary letters patent; and the whole 
 of the stock as so increased or decreased shall become 
 subject to the provisions of this Act in like manner (so 
 far as may be) as though every part thereof had origin- 
 ally formed part of the stock of the company. 
 
 Proof of the by-law liaviiij^ been duly passed by the company and 
 sanctioned by a vote of two-thirds in value of the shareholders, tojjether 
 with the dates of the making? and sanctioning thereof, and of the meeting 
 having been duly called, must be furnished by affidavit. The original 
 by-law, signed and sealed, must be produced by the company with its 
 petition. When the capital is increased, the new shares must be of the 
 same amount as the old. A copy of the company's by-law, if any, regu- 
 lating the calling of general meetings and of the notice calling the meet- 
 ing, duly verified, should be furnished. 
 
 In t se of the increase or decrease of capital, the bona fide character 
 of the same should also be proved by affidavit. 
 
Iher 
 
 Inal 
 
 its 
 
 I the 
 
 |eet- 
 3ter 
 
 USE OF THE WORD "LIMITED." 
 
 137 
 
 
 
 S858. (1) The directors may mnko a l»v law for creat- P'ofeim<. 
 
 . „ ' , . 1 ' , p ''"■' stock, 
 
 ins i>ii^ issuiiijj; any part of tho capital stock as preier- 
 fcuce stock, Ki^iiif?' the same such preference and priority 
 as respects dividends and otlierwise over ordinary stock 
 as may be declared by the by-law. 
 
 (2) The by-law may provide that the holders of shares J?/',^,^/*!,, 
 of such preference stock shall have the rii'ht to select i>/«f"rt">ci> 
 a certain stated proportion of the board of directors, ers. 
 
 or may p,ive them such other control over the affairs of 
 the company as may be considered expedient. 
 
 (3) No such bv-law shall have anv force or ctfecrt umuii- 
 
 ' • " iiious sane- 
 
 whatever until after it has been unanimously sanctioned tion re- 
 
 "^ (luirtid. 
 
 by a vote of the shareholders, present in person or by 
 proxy at a general meeting of the company duly called 
 for considering the same, or unanimously sanctioned in 
 writing by the shareholders of the company; provided, special 
 however, that if the by-law be sanctioned by three-fourths 
 in value of the shareholders of the company, the com- 
 pany may, through the Provincial Secretary, petition the 
 Lieutenant-Governor in Council for an order approving 
 the said by-law, and the Lieutenant-Governor may, if he 
 sees tit, apjtrove thereof, and from the date of such ap- 
 proval the .by-law shall be valid and may be acted upon. 
 
 (4) Hold(»rs of shares of such ])reference stock shall }*'«'!*!;.''•'"* 
 be shareholders within the meaning of this Act, and shall "fiiouiers 
 
 " of iireier- 
 
 in all respects possess the rights and be subject to the •'"oo «tock. 
 liabilities of shareholders within the meaning of this 
 Act, provided, however, that in respect of dividends 
 and otlierwise, they shall as against the ordinary share- 
 holders, be entitled to the preferences and rights given 
 by such by-law. 
 
 (5) Nothing in this section contained or done in P"'"- 'Veaitorl 
 suance thereof, shall affect or impair the rights of credi- l',;^fj4iil 
 tors of the company. 
 
 Use of the Woud " Llmiteix" 
 2J5. (1) The companv shall keei) painted, or affixed, inabhrevi- 
 
 ^ ' * ' ' ' atfd word 
 
 its name with the unabbreviated word " Limited " as the "limited 
 
iTiimr r 
 
 %i I 
 
 H 
 
 
 if w 
 
 i I 
 
 138 
 
 to be In- 
 Rerted in 
 all notioeB, 
 etc. 
 
 DircetorB 
 1ial>1e on 
 written 
 coiitrncts, 
 wliicli (io 
 not sliow 
 liniitod lia- 
 bility. 
 
 Penalty 
 for viola- 
 tion of i)ro- 
 cedict^ suc- 
 tion. 
 
 Penalty for 
 Iierniitting 
 violation. 
 
 Penalty for 
 using or au- 
 thorizing 
 use ot seal 
 without 
 word 
 
 " limited" 
 it. 
 
 .sHAUi;m»Li)i;u.s and dikectoh.s .manuaf.. 
 
 Knst word tlicrcof. on the ontsido of ovory office, or X)lace 
 in wliicli llic Imsiiu'HS of the conipnny iw <in-iic<l on, in 
 SI (;on.s[)iciioiiH position, in letters eJiHily lej:;il)l(*; and 
 shall have its name with the said nnahbreviuted word 
 in legible characters on its seal, and shall have its name 
 with the said unnhhreviated word mentioned in legible 
 characters in all notices, advertisements and other 
 official publications of the comi)any, and in all bills of 
 ex<'hanp;e, promissory notes, indorsements, cheques and 
 orders for money or ^oods purporting to be sifjcned by 
 or on behalf of such company, and in all bills of parcels, 
 invoices and receipts of the compan3\ 
 
 (2) The directors of the c(uui)any shall be jointly 
 and severally liable ajxin every written contract or under- 
 takinj; of the company on the face whereof the unabbre- 
 viated word ''Limited" is not distinctly written or 
 printed as the last word in the name of the company, 
 where it first occurs in such contract or undertaking. 
 
 (3) Every company wliich does not keep painted or 
 affixed its name, with the unabbreviated word " Limit- 
 ed " as the last word thereof, in the manner directed by 
 this section, shall incur a penalty of twenty dollars for 
 every day during which such name is not so kept painted 
 or affixed. 
 
 (4) Every director and manager of the company who 
 knowingly and wilfully authorizes or permits such de- 
 fault shall be liable to the like penalty. 
 
 (5) Every director, manager or officer of the com- 
 pany, and every person on its behalf, who uses or author- 
 izes the use of any seal purporting to be a seal of the 
 oom])any whereon its name, with tlie said unabbreviated 
 word " Limited " as the last word thereof, does not ap- 
 pear, or who issues or authori/<es the issue of any notice, 
 advertisement or other official publication of such com- 
 panj', or avIio signs or authorizes to be signed on behalf 
 of such company any bill of exchange, promissoin' note, 
 indorsement, cheque, order for money or goods, or who 
 issues or authorizes to be issued any bill of parcels, in- 
 voice or receipt of the comi»any, wherein its name, with 
 
 II f I 
 
 
CHANOE OK NAME. 
 
 180 
 
 le 
 3d 
 
 in- 
 ilf 
 te, 
 ho 
 iu- 
 ith 
 
 the said word as the hist word tliercof, is not niontloned 
 in manner aforcsiiid, sliall incur a i»«'nally o'' two hundred 
 dollars, and shall also he ]><'rsonally liabl;- (o the hold<'r 
 of any such hill of exchange, jn'oniissory note, che«jue 
 or onh'r for money or floods for the amount thereof, un- 
 less the same is duly ]»aid l»y the company. 
 
 (0) This section shall not apply to any comj)any not piovIho. 
 incorporated for commercial, mercantile, manufactur 
 infi, tradin}? or business ])urposes or objects, where such 
 company by its charter of incor])ora(ion is declared to 
 be exempt fr(mi the ])ro\isi(ms thereof, or to any com- 
 l^any not incoi*porated for any of the said purj)oses, 
 which, on proof thereof being shown to the Lieutenant- 
 Governor in Council, is, on, from and after a date to be 
 set forth in the order of the Lieutenantrjovernor in 
 Council in that behalf, declared to l)e exempt. 
 
 Change of Name.' 
 
 34. In case it is made to appear to tlie satisfaction 
 of the Lieutenant-tJovei'iior in Council that any com- 
 pany is incorporated under a name tl ■ same as, or so 
 similar to that of an existing conipany, i)artnership, in- 
 dividual, or to any name under which any existing busi- 
 ness is being carried on, as to deceive, it shall be lawful 
 for the Lieutenant-Governor b^' an Order in Council to 
 change the name of the company to some other name 
 to be set forth in th(> order; and no such alteration of 
 name shall alTect the rights or obligations of the com- 
 pany; and all proceedings may be continued and com- 
 menced by or against the company by its new name, that 
 might have been continued or commenced by or against 
 the company by its former name. 
 
 IxcinENTAL Powers of Companies. 
 
 25. Tlie company shall, in addition to its other 
 powers, possess power: 
 
 (a) To alter or change its common seal at pleasure; 
 
 ' Name of any company may be clianj^ed under the Act entitled 
 "An Act respecting the changing; of tlie names of Incorporated Coni- 
 panieB," jwst. 
 
 Clianpe of 
 name if ob- 
 jection. 
 iil>lo. 
 
 Powers in- 
 cident to 
 incorpora- 
 tion. 
 
 Seal. 
 
I 
 
 ill 
 
 ; 1 
 
 I i 
 
 if H 
 
 (I i i 
 
 140 
 
 I'urHoual 
 proiierty. 
 
 KuiUlinge. 
 
 Construc- 
 tion and 
 niaint(!n- 
 ance of use 
 fill woiUh. 
 
 Oeiieral 
 powers. 
 
 Kranches 
 ofbusinoBS, 
 
 Beal estate, 
 
 Itestrlc- 
 
 tious aH to 
 holding 
 real estate 
 
 SHAKKIIOI.DKHS AXI) DIUKCTOHS MANUAL. 
 
 (h) To take over, acqiiin', hold, uhg, soil and convoy 
 such personal properly and movables, niacliinery, trado- 
 luarks, patents, licenses, and franchises or rights there- 
 under as may be deemed necessary or exjM'dient for the 
 jMirposes for which the conipany is incorporated; 
 
 ((') To erect on its proiierly siidi works, shops, mills, 
 buildings, houses and structures, and to make such im- 
 provements of what kind soever as may be conv<'nient or 
 necessary for the due carryin}? out of its undertaking; 
 
 ((if) To construct and maintain, or aid in the con- 
 struction and maintenance of such works and improve- 
 ments as nuiy be deemed necessary, or advantageous to 
 the due carrying out of its underlakinj;; 
 
 (r) To exercise and enjoy all the priviloj^es and im- 
 munities, and to do all acts recjuisite, or incidental to 
 the due carrying on of its undertaking; 
 
 if) To carry on any branch or branches of business 
 incidental to tlie due carrying out of the objects for 
 which Ihe company was incorporated, and subsidiary 
 there+o, and necessary to enable the company profitably 
 to carry on its nndertaking; „ 
 
 iff) To acquire by purchase, lease, or other title, and 
 to hold, use, sell, alienate and convey any real estate 
 necessary fav the carrying on of its undertaking, and 
 the company shall upon its incorj)oration become and 
 be invested with all the property and rights, real and 
 l)ersonal, theretofore held by or for it under any trust 
 created with a view to its incorporation. 
 
 Provided, however, that, unless oiher special statu- 
 tory enactments apply, no parcel of land, or interest 
 therein at any time acquired by the company and not 
 required for its actual use and occupation, or not held 
 by way of security, or not situate witliini the limits or 
 within one mile of the limits of any city or town in this 
 province, shall be held by the company or by any trustee 
 on its behalf, for a longer period than seven jears after 
 the acquisition thereof, but shall be absolutely sold and 
 disposed of, so that the company shall no longer retain 
 
8TOCK, CAI.LS, ETC. 
 
 141 
 
 any intorost theroin nnlosa by way of security; and 
 fui'tluT pi'ovi«l<Ml, that, any snch panel of lan«l, oi" any 
 inlcroHl llicrcin not within (Ik? I'XccjttionN licrcinln-foro 
 nicnliont'd, lu'Id l»y tlic company for a lonj^cr period (lian 
 seven years, witliont being dispose*! of, sliall be for- 
 feited to Her Majesty for tlie use of this Province ; 
 pi'ovided, also, that tlu? Tiieutenant (Joveinor in Council 
 may extendi the same ])erio(l from time to^ tlnu' not ex- 
 eeedinj; in tlie whole twelve years ; and further pro- 
 vided, that no sueli forfeitun? shall take etlect, or be Fo'-'o't"'-*'. 
 enforced until the expiration of at h'ast six calendar 
 numths after noti(<' in wrilinj; to the company of tin; 
 intention of Her Majesty to claim such forfeiture; and 
 it shall be the duty of the company to i^ivo the liiciuten- 
 ant-Governor in Coun(;il, when reciuired, a full and cor- 
 rect statement of all lands at the date of such statement 
 held by the com[)any. or in trust for the company, and 
 subject to these provisos. 
 
 Stock, Calls, Etc, 
 *2il. If the letters patent or special Act make no Annunpnt 
 other definite provision, the shares of stock of the com- 
 pany, so far as they art; not allotted thereby, shall be 
 allotted when and as the directors by by-law or other- 
 wise ordain. 
 
 27. The shares of stock of the company shall be stock, per- 
 deemed personal estate, and shall be transferable on the tate. 
 books of the company, in such manner only, and subject 
 to all snch conditions and restrictions as by this Act, 
 or b}' the special Act, or by tin? letters patent, or by- 
 laws of the company may be prescribed. 
 
 2S. The directors may refuse to allow the entry, in Directors 
 
 ^ ' may refuse 
 
 any such book, of any transfer of shares of stock whereof transfer of 
 
 ,,*',,'/ , stock in 
 
 the whole amount has not been paid in; and whenever tertai a 
 
 cases. 
 
 entry is made in such book of any transfer of stock, not 
 fully pai<! in, to a person not beinjj of apparently sufli- 
 cient means, the directors present when such entry is 
 authorized ^hall be jointly and severally liable to the 
 creditors of the company in the same manner and to the 
 same extent as the transferring shareholder, but for 
 
M 
 
 ll.;i! 
 
 f 
 
 4( 
 
 lltii 
 
 
 1!^ 
 
 if' i -i 
 
 ! ill, 
 
 142 
 
 Tlieir li- 
 ability if 
 tlipy allow 
 traiiHferM 
 to |)erBoiis 
 without 
 meaus. 
 
 Ho>v direc 
 tor may ox- 
 oil era to 
 hiuiKoll'. 
 
 Transfer 
 valid only 
 af tor entry. 
 
 SHAREHOLDERS AND DIRECTORS MANUAL, 
 
 such entry, would have been; but if any director present 
 when Hueh entry is allowed, forthwith, enters a written 
 protest against the same, and within eight days there- 
 after causes such protest to be notified, by registered 
 letter, to the Provincial S"cretary, such director may 
 thereby, and not otherwise, exonerate himself from such 
 liability. 
 
 2tt. No transfer of shares of stock, unless made by 
 sale under execution, or under the order or judgment of 
 some comp«»tent Court in that behalf, sliall be valid for 
 any purpose whatever, save only as exhibiting the rights 
 of the parties thereto towards each ot"'er, and as render- 
 ing the transferee liable, ad interim, jointly and sever- 
 ally with the transferor, to the company and its credi- 
 tors, until entry thereof has been duly made in the books 
 of the comijan\\ 
 
 K**«triction ;{0. Xo sliiu'e shall be transferable until all previous 
 
 as to trdus- '■ 
 
 ter^. calls thereon have been fully paid in, or until declared 
 
 forfeited for non-payment of calls thereon. 
 
 J51. The company shall not be bound to see to the 
 execution of any trust, whether expr'^ss, implied or con- 
 
 ("onipany 
 not to 1)0 
 liiilile in 
 
 tnistsi'etc. siructive, in respect of any share; and the receipt of the 
 shareholder in whose name the same stands on the books 
 of the companv shall be a valid and binding discharge 
 to the company for any dividend or money payable in 
 respect of such share, whether or not notice of the trust 
 has been given to the company; and the company shall 
 not be bound to see to the application of the money paid 
 upon such receipt. 
 
 Ji2. The directors of the company maj^ call in and 
 demand from the shareholders thereof, respectively, the 
 amount unpaid on shares of stock by them subscribed or 
 held, at such times and places and in such payments 
 or instalments as the letters patent, or this Act, or the 
 by-laws of the company require or allow; and interest 
 shall accrue at the legal rate for tlie time being, upon 
 the amount of any unpaid call, from the day appointed 
 for payment of such call. 
 
 Calling in 
 
 instal- 
 
 uieuts. 
 
STOCK, CALLS, ETC. 
 
 143 
 
 ;{:i. Not less than ten per centum upon the allotted caiis. 
 shares of stock of the company shall, by means of oneTeni.er 
 or more calls formal! v made, be called in and made ])ay- innrst 
 
 your. 
 
 able within one year from the incorporation or the com- 
 pany; the residue when and as the by-laws of the com- 
 pany direct. 
 
 :i4. The company may enforce payment of all trails Jj!^'^[°>"^«j 
 and interest thereon by action in any Court of compet- i_»Yisb"*"' 
 cnt jurisdicticm; and in such action it shall not be neees- action. 
 sary to set forth the special matter, but it shall be snfli 
 cient to state that the defendant is a holder of one share 
 or more, stating the number of shares, and is indebted in 
 the sum of money to which the calls in arrear amount, 
 in respect of one call or more upon one share or more, 
 stating the number of calls and th(> amo,unt of each, 
 whereby an action has accrued to the company under 
 this Act; and a certiticate under the seal and ])urporting 
 to be signed by any otticer of tlie company, to the etl'ect 
 that the defendant is a shareholder, that such call or 
 calls has or have been made and that so much is due by 
 him and unpaid thereon, shall be received in all Courts 
 as prima facie evidence to that effect. 
 
 im. If after su<-h demand or notice as by the special I'prfeitme 
 Act, or by the letters patent or by-laws of the company 
 is prescribed, anj- call made ui)on any share or shares 
 is not paid within such time as by such Act or by such 
 letters patent or bylaws may be limited in that behalf, 
 the directors in their discretion by resolution to that 
 effect, reciting the facts and duly recorded in their min- 
 utes, may summarily forfeit any shares whercmi such 
 payment is not made; and the same kIuiU thereupon be- 
 come the property of the company and may be disposed 
 of as, by by-law or otherwise, the company may ordain. 
 
 liil. (1) Every executor, administrator, guardian or Tmstees, 
 trustee, shall represent the stock in his hands, at all ^o't- 
 meetings of the company, and may vote accordingly as 
 a shareholder; and every person who pledges his stock MortRasov 
 
 ii 1 ' . ii .• of stock 
 
 may nevertheless represent the same at all such meet- ""ly vote, 
 ings, and may vote accordingly as a shareholder. 
 

 'i',\ 
 
 IV 
 
 III 
 
 f) tg 
 
 II 
 
 144 
 
 Joint hold- 
 ers of 
 atock. 
 
 Liability ot 
 
 sharebuld- 
 
 ers. 
 
 Set-ofif. 
 
 Shareliold- 
 
 prs not 
 liable be- 
 yond 
 iiinonnt 
 unpaid on 
 shares. 
 
 Trustees, 
 etc., not 
 
 SllAHEHOLDERS AXI) DIlJErTOUS MANUAL, 
 
 (2) If stock be held jointly by two or more persons, 
 nny one of tlioin present at a meeting may in the absence 
 of the other, or others, vote thereon, but if more than 
 one joint stockholder be present or be represented by 
 proxy, they shall vote together on the stock jointly held. 
 
 Liabilities, Etc., of Shareholders. 
 
 J17. (1) Each shareholder, until the whole amount 
 of his shares of stock has been paid up, shall be indivi- 
 duall}' liable to the creditors of the company to an 
 amount equal to tluat not paid up thereon, but shall not 
 be liable to an action therefor by any creditor before an 
 execution against the company has been retur:ied un- 
 satisfied in whole or in part; and the amount due on such 
 execution, but not be3'ond the amount so unpaid of his 
 said shares of stock, shall be the amount recoverable 
 Avith costs, against such shareholder. 
 
 (2) Any shareholder may plead by way of defence, 
 in whole or in part, any set-otl which he could set up 
 against the company except a claim for unjjaid divi- 
 dends, or a salary or allowance as a president or a direc- 
 tor of the company. 
 
 (3) The shareholders of the company shall not as 
 such be held responsible for any act, default or liability 
 whatsoever, of the company, or for any engagement, 
 claim, payment, loss, injury, transaction, matter or thing 
 whatsoever, relating to or connected with the company, 
 beyond the unpaid amount of their respective shares in 
 the capital stock thereof. 
 
 J{S No person holding shares of stock in the com- 
 
 iicrsouaiiy pauy as executor, administrator, guardian or trustee, shall 
 be personally subject to liability as a shareholder; but 
 the estates and funds in the hands of such person shall 
 be liable in like manner and to the same extent, as the 
 testator or intestate or the minor, ward, or person in- 
 terested in the trust fund, would be, if living and com- 
 petent to act and holding such stock in his own name. 
 
 Mortgagees ;{j| ^so pcrson holding shares of stock as collateral 
 security, shall be personally subject to liability as a 
 
DIllECTOHS AND THEIR POWERS, ETC. 
 
 145 
 
 I in 
 
 \ll 
 lut 
 
 ill 
 hie 
 lin- 
 liu- 
 
 shareholder; but the person transferring such shares as 
 such collateral security shall be considered as holdiug 
 ( he same, and shall be liable as a shareholder in respect 
 thereof. 
 
 Directors and their Powers, Etc. 
 
 40. The affairs of the company shall be managed »oar<i of 
 
 directors. 
 
 by a board of not less than three directors, who shall be 
 elected by the shareholders in general meeting of the 
 company assembled at some place within this province. 
 
 41. The persons named as provisional directors in provisional 
 the special A.ct or in the letters patent shall be the di- 
 rectors of the company, until replaced by others duly 
 elected in their stead. 
 
 42. No person shall hold office as a director unless QuaiiAca- 
 he is a shareholder owning stock absolutely in his own dhectors. 
 right, and not in arrear in respect of any call thereon, 
 
 and where any person who is a director ceases to be a 
 bona fidei holder of stock in the company, he shall there- 
 upon cease to be a director. 
 
 43. (1) The election of directors shall take place atvoariy 
 the annual meeting, all the members of the board retir- 
 ing, and (if otherwise qualified) being eligible for re- 
 election. 
 
 (2) Elections of d'rectors shall be by ballot; Baiiot. 
 
 (3) Vacancies occurring in the board of directors vpoaucies. 
 may, unless the by-laws otherwise direct, be filled for 
 
 the unexpired remainder of the term^ by the board, from 
 among the qualified shareholders of the company; 
 
 (4) The directors shall, from time to time, elect from President 
 among themselves a president of the company; and shall *" " "*"^'' 
 also name, and may remove at pleasure, all other officers 
 thereof. 
 
 44. If at any time an election of directors is not Failure to 
 
 - - I I 1 ef ± . t . 1 elect rtirrc- 
 
 made, or does not take effect at the proper time, tlie com- tors, how 
 pany shall not be held to be thereby dissolved; but such *^^ '" 
 <'Iection may take place at any general meeting of the 
 
 w.a.D.M.— 10 
 
146 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 !1!l'- 
 
 i>fti 
 
 '1 
 
 ij 
 
 
 I'A 
 
 flH 
 
 
 1 
 
 1 
 
 1 |> ■ 
 
 w 
 
 9 1 
 
 ! >f. 
 
 company duly called for that purpose; and directors 
 shall continue in office until their successors are duly 
 elected. 
 
 by-i^w'^of'^ 45. (1) A company may by by-law increase or de- 
 
 directors"' crease the number of its directors, or may change the 
 
 oflice h!*** company's head office in Ontario. 
 
 Ontario. ^2) jjq by-law, for either of the said purposes, shall 
 
 be valid or acted upon unless it has been sanctioned by 
 a vote of not less than two-thirds in value of the share- 
 holders at a meeting of the company duly called for con- 
 
 vaiidation sidcring the subject of the by-law, nor until a copy of 
 the by-law, certified under the seal of the company, has 
 been transmitted to the Provincial Secretary, and also 
 has been published by the company once in the Guzette. 
 
 No''*"^- {?>) In case the head office of tlie company is being 
 
 changed as aforesaid, then the company shall forthwith 
 give notice of the fact in such newspapers and for such 
 time as the regulations made under section 11 of this 
 A-Ct may prescribe. 
 
 A copy of the company's by-law, if any, ref»ulating the callint» of 
 general meetings and of the notice calling the meetings, duly verified, 
 should be furnished. 
 
 Proof that the by-law was properly sanctioned and that the meeting 
 was duly called must be given by affidavit. A copy of the bylaw certi- 
 fied under the company's seal and duly verified must be transmitted to 
 the Provincial Secretary. Proof that the by-law was published once in 
 'The Ontario Gazette should, in the interest of the company and to avoid 
 future question as to due compliance with the provision of the Act, also 
 be furnished. A copy of the notice, cut from the Gazette, ought to be 
 attached thereto. 
 
 Foinis TO Increase the Ncmder of Directoks. 
 
 By-law increasing the number of directors Form No. 23. 
 
 Affidavit verifying by-law, and proving sanctioning of same " 14. 
 
 Notice publishing by-law in Ontario Gazette " 24. 
 
 Affidavit verifying same " 2.5. 
 
 By-laws of company regulating the calling of a general 
 
 meeting •' 15. 
 
 Affidavit verifying same " 1(5. 
 
 Notice in local newspaper calling general meeting " 17. 
 
 Affidavit proving due calling of meeting and verifying notice 
 
 in local paper " IH. 
 
DIRECTORS AND THEIR POWERS, ETC. 147 
 
 Notice in Ontario Gazette calling general meeting Form No. 17, 
 
 Affidavit proving due calling of general meeting where no 
 by-law for the purpose haa been passed and verifying 
 notice in local paper and OHtarto Gaicfte ^ " l',t. 
 
 To Decrease the NrjisER of Directors. 
 The same forma are necessary as for increasing, and those given 
 above may be adapted. 
 
 Forms for Chanoinq the Head Office. 
 
 By-law changing Form No. 20. 
 
 Affidavit verifying by-law, and proving sanctioning of same " 14. 
 
 Notice publishing by-law in Ontario Gazette " '2i. 
 
 Affidavit verifying same " 25, ) , 
 
 By-laws of company regulating the calling of a general 
 
 meeting " lo. 
 
 Affidavit ventying same ' 10. 
 
 Notice in local newspaper calling general meeting " 17. ■ 
 
 Affidavit proving due calling of meeting and verifying no- 
 tice in local paper .,. . " 18. 
 
 Notice in Ont«Wo Ga^e«e calling general meeting " 17. 
 
 Affidavit proving due calling of general meeting where no 
 bylaw for the purpose haa been passed, and verifying 
 
 notice in local paper and OMt<u70 G«;et(e " li). 
 
 4fi. The directors of the eorapauv shall have full Po\versau(i 
 
 *^ "■ duties of 
 
 power in all things to administer the affairs of the com- tinoctors. 
 pany; and may make, or cause to be made for the com- 
 pany, any description of contract which the company 
 may by law enter into. 
 
 4T. The directors may, from time to time, make by- By-laws, 
 laws not contrary to law, or to the letl' 's patent of the 
 company, or to this Act, to regulate : 
 
 (a) The allotment of stock ; the making of calls ^t<^-^^* 
 thereon; the payment thereof; the issue and registration . 
 
 of certificates of stock; the forfeiture of stock for non- 
 payment; the disposal of forfeited stock and of the pro- 
 ceeds thereof; the transfer of stock; 
 
 (ft) The declaration and payment of dividends; Dividends, 
 
 (c) The term of service not exceeding two years, Diicctois, 
 
 and the amount of the stock qualitication of the directors; 
 
 id) The appointment, functions, duties and removal °*^^°«»8- 
 
 of all officers, agents and servants of the company; the 
 
i 1 
 
 ft 
 
 
 T 
 
 
 148 
 
 SHAUEHOLDEKS' AND DlUECTOKs' MANUAL. 
 
 security to be given by them to tlie company; and tlieir 
 remuneration; 
 
 Meetings. ^^.^ r^jj^, time at wliicli, and place wliere tlie general 
 
 meetings of the company shall be held; the calling of 
 meetings, regular and special, of the board of directors, 
 and of the company; tlie quorum; the requirenuMits as 
 to proxies; and the procedure in all things at such 
 meetings; 
 
 Fiues. {f) The imposition and recovery of all penalties and 
 
 forfeitures admitting of regulation by by-law; and 
 
 Conduct of (,,) The conduct in alLother particulars of tlie all'airs 
 
 eraiiy. of the company; 
 
 conflnna- and may from time to time repeal, amend, or re-enact 
 
 laws. ■ the same; but every such by-law. and every repeal, 
 amendment, or re-enactment thereof, unless in the mean- 
 time confirmed 'at a general meeting of the company 
 duly called for that purpose, shall only have force until 
 the next annual meeting of the company; and in default 
 of confirmation thereat, shall, at and. from that time only, 
 cease to have force; and in that case no new by-law to 
 the same or the like effect shall have any force until coii- 
 tirmed at a general meeting of the company; ])rovided, 
 however, that the company shall liave power either at 
 the general meeting, called as aforesaid, or at the annual 
 meeting of the company, to repeal, amend, vary or other- 
 wise deal with any by-laws which have been passed by 
 the directors, but no act done or right acquired under 
 any by-law shall be prejudicially affected bv any such 
 repeal, amendment, variation or other dealing. 
 
 4H. Xo by-law for the payment of the president or 
 any direcio?', shall be valid or acted upon until the same 
 has been continued at a general meeting. 
 
 4tt. If authorized by by-law, passed by the direct- 
 ors and sanctioned by a vote of not less than two-thirds 
 in value of the shareholders present in person or by 
 proxy at a general meeting of the company duly called 
 for conrudering tlu-^ subject of such by-law% the directors 
 of the company may: 
 
 By-laws 
 may be 
 varied. 
 
 raynient 
 to presi- 
 de ut or 
 directors. 
 
 B arrowing 
 po'wers. 
 
 I 
 
AXXUAL, GENERAL AND .SPECIAL MEETINGS. 
 
 ]^ 
 
 {(t) Borrow money upon tho credit of the company; 
 • (b) Limit or increase the amount to be borrowed; 
 
 (c) Issue the bonds, debentures, or other securities Power to 
 of the company for the lawful purposes of the company, or dtben 
 and no other, and may pledge or sell the same for such 
 sums and at such prices as may be deemed expedient or 
 be necessary; but no such bonds, debentures, or other 
 securities shall be for a less sum than one hundred dol- 
 lars each, and 
 
 ((/) Hypothecate, mortuaue or pledijje all or anv oftoeraut 
 
 \ / ^ 1 ' n r^ 1 p' . mortgages. 
 
 the real or personal [)roperty, rights and powers of the 
 company to secure any such bonds, debentures or other 
 securities and any indebtedness or sum or sums so bor- 
 rowed for the purposes of the company. 
 
 Annual, General and Special ^Ieetings.^ 
 
 *>0. In default only of other express provisions in Mode oi 
 such behalf, by the special Act. or by the letters patent''^''"''" 
 or by-laws of the company, notice of the time and place 
 for holding general, including the annual, meetings of Notice. 
 the company shall be given at least ten days previously 
 thereto, in some newspaper published at or as near as 
 niaj' be to the head-ofllice, ;ind to the chief jdace of busi- 
 ness of the conii)any, if these ditfer; and also, in the case 
 of companies having a capital exceeding .f:{,UOO, either 
 by publishing the same in The Gazette, or by mailing 
 the same as a registered letter duly addressed to each 
 shareholder at his last known post-office address at least 
 ten daAs previous to such meeting. 
 
 fSl. A genin-al meeting, to be known as the annual Ammai 
 
 !.• /! ii t 11 . 1 1 ■. 1 ;. 1 meeting. 
 
 meeting of the company, shall be held at such time and 
 place in each year as the letters patent or by-laws of the 
 company may provide, and in default of such provisions 
 in that behalf the annual meeting shall be held on the 
 fourth Wednesday in January in every year, at such 
 place as may be detennined by the directors. 
 
 52. The directors mav, whenever thev think fit, and special 
 
 i-i ^ 1 II • •\- ., 1 . "^ . . . 1 ' ,1 ineetiDgs. 
 
 they sliall upon a reijuisition - made in writing by the 
 
 ' See section 1(5 for first meeting. 
 
 '■^ See Form post. ' 
 
Quorum 
 
 Dissolu- 
 tion of 
 meeting. 
 
 shareholders' and directors' mantal. 
 
 holders of not Iosh than one-tonth of the subscribed capi- 
 tal stock of tlie company convene a special general 
 ineetinf? of the company. 
 
 {53. Any requisition made by the shareholders shall 
 express the object of the sjxM-ial {general nnrliiij^ jtro- 
 posed to be called, and shall be left at the head-oftiee of 
 the company. 
 
 54. Upon the receipt of such requisition the direct- 
 ors shall forthwith proceed to convene a special jjeneral 
 meeting. If they do not proceed to cause the same to be 
 held within twenty one days from the date upon which 
 the requisition was left at the head olhce of the company 
 the requisitionists, or any other shareholders amounting 
 to the required one-tenth of the subscribed capital stock 
 of the company, mny themselves convene such special 
 general meeting. 
 
 an. Ten days' notice at the least, specifying the 
 place, the day and the hour of meeting, and the general 
 nature of the business to be considered, shall be given 
 to the shareholders by the directors, or by the requisi- 
 tionists, as the case may be, in manner mentioned in 
 section 50 of this Act, or in such other manner, if any, 
 as the by-laws of the company may prescribe. 
 
 »56. Xo business shall be transacted at any such 
 special general meeting calbnl upon, or pursuant to w?- 
 quisition as aforesaid, unless a quorum of shareholders 
 is present in person, or by proxy, at the time when the 
 meeting proceeds to business; and such quorum shall be 
 ascertained as follows, tliat is to sav, if the shareholders 
 f'lt the time of the meeting do not exceed ten in number, 
 the quorum shall be three, if they exceed ten there shall 
 be added to the above quorum one for every four addi- 
 tional shareholders up to fifty, and one for every ten 
 additional shareholders after tifty, with this limitation, 
 that no quorum in any case shall exceed twenty. 
 
 i57. If within one hour from tlu^ time appointed for 
 such special general meeting, called upon or pursuant to 
 iresaid. a quorum is not present, the meet- 
 ssolved. 
 
 sition 
 
NOTICES, ACTIONS, ETC. 
 
 161 
 
 !iH. The president of the coinpanv shall preside asTresiding 
 chairman at every general nieetinj^ of the company. 
 
 SiU. If there is no president, or if at any meetinj? lieciiaimian 
 is not present witliin fifteen minutes after the time ap- ed when'' 
 pointed for liolding the meeting, tlie sliareliolders pre-"^*"'**"** 
 sent sliall clioose some one of tlieir number to be chair- 
 man. 
 
 I»0. Tlie cliairman may, witli tlie consent of the Adjourn- 
 meeting, and subject to sudi conditions and restrictions consenu 
 as the meeting may decide, adjourn any meeting from 
 time to time, and from place to i)lace. 
 
 OI. At any general meeting, unless a poll is de- Procedure 
 manded. a declaration by the chairman that a resolution lutions. 
 has been carried and an entry to that effect in the pro- 
 ceedings of the company, shall be jrri iiki fiicie evidence 
 of the fact, without i)roof of the number or proportion 
 of the votes recorded in favour of or against such resolu- 
 tion. 
 
 6a. If a poll is demanded it shall be taken in such when poii 
 manner as the by-laws prescribe, and in default thereof , Ld.' ^"'^"' 
 then as the chairman may direct. In the case of an 
 equality of votes at any general meeting, the chairman 
 shall be entitled to a second or casting vote. 
 
 ©3. At all general nu>eiings of the company, every votos. 
 shareholder shall be entitled to as many votes as he 
 holds shares in the company, and may vote by proxy. 
 
 04. No shareholder being in arrear in respect of any sharehoia- 
 call shall be entitled to vote at anv meeting of the com- rear not to 
 
 ° vote. 
 
 pany. 
 
 •' Notices, Actions, Etc. 
 
 an. In any action or other proceeding, it shall not Mode of lu- 
 be requisite to set forth the mode of incorporation oftion, etc., 
 
 the company, otherwise than bv mention of it under its sot forth m 
 ,' . i'li.j. e • ^ 'egai pro- 
 
 corporate name, as incorporated by virtue of a special ceediugs. 
 
 Act, or of letters patent, or of letters patent and sup- 
 plementary letters patent, as the case may be; and the 
 letters patent or supplementary letters patent them- 
 
f 
 
 If n 
 
 ^! i n 
 
 152 
 
 Rvidenco 
 of by-laws. 
 
 Authenti- 
 cation of 
 Huniinons 
 and nu- 
 tices. 
 
 Service of 
 noticed. 
 
 Time of 
 service. 
 
 Proof of 
 servico. 
 
 Actions be- 
 tween com- 
 Iiany and 
 sharo- 
 taolderB. 
 
 Becord 
 books to be 
 kept and 
 wtiat to 
 contain. 
 
 shareholders' and directors' manual. 
 
 selves, or any exeinplitication, oi* copy thereof under tlie 
 Great Seal, shall be coiulusive proof of every matter 
 and thing therein set forth. 
 
 ««. A copy of any bj'-law ^ of the company, under 
 its seal, and iiurportins to be sij^ned by any officer of the 
 company, shall be received as prima facie evidence of 
 the by-law in all Court.s in Ontario. 
 
 ©7. Any vrit, notice, order or proceeding!; n'(iuirin<r 
 authentication by the company niit;. be sifincd by any 
 director, manaf^cr or other authorized otlicer of the com- 
 pany, and need not be under the seal of the company. 
 
 UH. A notice to be served by the company upon a 
 shareholder may be served either persona lly or by send- 
 ing it through the post, in a registered letter, addressed 
 to the shareliolder at his place of abode as it last ap- 
 peared on the books of the company. 
 
 0!>. a notice or other document served by post by 
 the company on a shai'eholder shall be held to be served 
 at the time when the registered letter containing it would 
 be delivered in the ordinary course of post; and to provtt 
 the fact and time of service it shall be sufikient to prove 
 that such letter was properly addressed and registered, 
 and was put into the post-ottice. and the time when it was 
 put in, and the tinu^ reciuisite for its delivery in the or- 
 dinary course of post. 
 
 70. Any description of action may be prosecuted 
 ant', maintained between the company and any shai'e- 
 holder thereof, and no shareholder shall, by reason of 
 being a shareholder, be incompetent as a witness therein. 
 
 Books to be KEin^ and What to Contain. 
 
 71. The company shall cause the secretary, or some 
 other olticer especially charged with that duty, to keep 
 a book or books wherein shall be kept recorded: — 
 
 (a) A copy of the letters patent incorporating the 
 company and of any supplementary letters patent issued 
 
 ^ For set of by-laws suitable for company's use see pout. 
 
 III 
 
BOOKS TO HE KEI'T AND WHAT TO CONTAIN. 
 
 153 
 
 (1 
 
 lie 
 
 h> 
 
 he 
 (1 
 
 to the company; and If inceiporated by special Act, the 
 thai»tei' and year of such Act; 
 
 (b) The names, alphabetically arranged, of all per- 
 Mons who are or have been shareholders iu the com- 
 pany ;' 
 
 (c) The post-offloe address and calling of every such 
 I»ersou while such shareholder; 
 
 ((/) The number of shares of stock held by each 
 shareholder; 
 
 ((■) Tlie amount paid in. and remaining unpaid, re- 
 spectively, on the stock of each shareholder; 
 
 (/) The date and other particulars of all transfers of 
 stock in their order; and 
 
 {(/) The names, poHt-otfice addresses, and callings of 
 all persons who are or have been directors of the com- 
 pany; with the several dates at which each person be- 
 came or ceased to be such director. 
 
 •72. No director, officer or servant of the company 
 shall knowinglv make or assist to make anv untrue eutrv 
 in any sucli book, or shall refuse or neglect to make any 
 proper entry therein; and any person violating wilfully 
 the j)rovisions of this section shall, besides any criminal 
 liability which he may thereby incur, ]h' liable in dam- 
 ages for all loss or injury which any person interested 
 may li.ive sustained thereby. 
 
 78. (1) If the name of any person is. without suffi- 
 cient cause, entered in or omitted froui such book or 
 books of the company, or if default is made or unneces- 
 sary delay takes place in entering in said books the fact 
 of any person having ceased to be a shareholder of the 
 company, the person or shareholder aggrieved, or any 
 shareholder of the company, or the company itself may 
 by application to a Judge apply for an order that the 
 book or books be rectified, and the Judge may either 
 refuse such application with or without costs to be paid 
 by the applicant, or he may, if satisfied of the justice of 
 
 ' For rulings of these and following books see Forms pout. 
 
 Pi'ualty for 
 
 ftilso 
 
 entries. 
 
 Powers of 
 judge as to 
 entries in, 
 oniissiona 
 from, and 
 rectifica- 
 tion of 
 books. 
 
 Costs. 
 
I 
 
 
 )^ 
 
 I 
 
 154 
 
 SHAUEHOLUEUS AN'lJ DIRECTOHH MANUAL. 
 
 the case, make an order foi- the rectitlcalion of the said 
 book or hooks, and ina.v direct tiie coiiipaiiy \o pay tlie 
 costs of such motion or application and any damai^es thi? 
 party aKfjrieved may liave snstained. Tlie .ludfje may, in 
 DociRionasanv pi'oeeedinir under tliis section, decide on anv oueH- 
 
 to title. . I r> J .1 
 
 tion relating to tlie title of any jx'rson who is a party to 
 siuch proceeding; to have his name enter«'d in oi' omitted 
 from the naid books of the company, whether such (pies- 
 tion arises between two or more shareholders, or alleged 
 shsireholders, or between any shareholders or allejjed 
 shareholders, and the company, and. {icnerally, the Jud^^e 
 nijiy in any such ]»roceedinn decide any (|uesti(m wliich 
 it may be necessary or expedient to decide for tlie recti- 
 fication of the said books. 
 
 (2) The Judfjfe may direct an issue to be tried in 
 which any (piestion of law may be raised. 
 
 AMieai. (^;{) An appeal shall lie, as in ordinary cases, before 
 
 such Judj;e. 
 
 (4) This section shall not deprive any Court of any 
 jurisdiction it nuiy have. 
 
 Books to be 7-4. Sucli books Shall dui'ini; reasonable business 
 
 open for "^ 
 
 insi.ectioii. hours of cvcry day, except Sundays and holidays, be 
 kept open for the inspection of shareholders and credi- 
 tors of the company, and their personal representatives 
 or agents at the head ottice. and every such shareholder, 
 creditor, agent, or representative, may nuike extracts 
 therefrom. 
 
 Liability 
 for refusal 
 to allow in- 
 epection of 
 books. 
 
 "75. Any director or officer who refuses to permit 
 any person entitled thereto to insi)ect such book or 
 books, or make extracts therefrom, shall forfeit and pay 
 to the party aggrieved the sum of one hundred dollars; 
 and in case the amount is not paid within seven days 
 after the recovery of judgment, the Court in whidi the 
 judgment is recovered, or a Judge thereof, may direct 
 the imi)risonnient of the offender for any period not ex- 
 ceeding three months unless the amount with costs is 
 sooner paid. 
 
BOOKS TO BE KEKI' AND WHAT TO CONTAIN. 
 
 155 
 
 1", 
 
 s 
 
 lit 
 oi' 
 ay 
 i's; 
 lys 
 lie 
 ^ct 
 ex- 
 is 
 
 TH. Sucli l»ool<H slijill hepriinn facie cvideuce of allBookstobo 
 
 " / .' prima fnnr 
 
 faclH purporting; to Im* tlu>n'l)y statod. in any action (»r ovidenco. 
 in'orocding against tlu- company or apiinst any whare- 
 lioldiT. 
 
 ■77. Tile directors sliall cause proiicr boolvs of aenookBof 
 
 ' ' Recount to 
 
 count to be kept eontaininj; full and tine statements: be kept. 
 
 {a) Of the company's financial and trading trnnsnc- 
 tions; 
 
 (/>) Of the stock-in-trade of the comjjany; ' 
 
 (c) Of the sums of money received and expended by 
 the company, and the matters in respect of which such 
 receipt or expenditure takes place, and 
 
 UJ) Of the credits and lialdlities of the company; 
 and also a book or books containint;- minutes of all theMiimtoHor 
 
 proceeci- 
 
 proceedinjis and votes of the company, or of the board of mga. 
 directors, respectively, and the by-laws of the company, 
 duly authenticated, and such minutes shall be verified 
 by the signature of the president, or other presidinj; 
 officer of the company. 
 
 Annual Statkment and Summauv, Etc. 
 VS. At each anniial meeting, or, at least, once in Annual 
 
 , in . ><.j stateinont 
 
 every year, and at intervals of not more than hfteenof incme 
 months, tlie directors shall, at a general nuH'ting duly peuaiture. 
 called, lay before the comiiiiny a statement of the imome 
 and expenditure of the company for the past year, juade 
 lip to a date not more than three mouths before s»>;h an- 
 nual or general meeting, and shall also ^ay bi'i'ore the 
 company such further infoi'uiation respecting the com- 
 pany's financial position and ])rotit and loss account as 
 the bylaws or the cliarter of the company may re- 
 <]uire.' 
 
 71>. (1) The company sliall. on or before the first dayAnnmu 
 
 o T-. , . ' , , .II' Buniniiirv 
 
 of feljruary m every year, make out a siimmary in dupli- of the 
 cate, verified as hereinafter required, containing as ofufc*'coi"> 
 
 ' For Form of Balance Sheet see post. 
 
 pauy. 
 

 \h 
 
 156 
 
 SHAREHOLDERS AND DIRECTORS MANUAI 
 
 Contents the thii'ty-fii'st day of December preceding, correctly 
 uient. stated, the following particulars.' 
 
 ((/) The corporate name of the company; 
 
 (7/) The manner in which +he company is incoipo- 
 rated, whether by special Act, n- by letters patent; 
 
 (c) The place where the head office of the company- 
 is situated; 
 
 ((/) The jdace, or jdaces where, or from which the 
 undertaking of the comjiany is carried on; 
 
 (e) The name, residence and post-office address of 
 the president and of the secretary, and of the treasurer 
 of the company; 
 
 (/) The name, residenc*' and i»«»st-(>ffice address of 
 each of the directors of tlie comi>any; 
 
 {</) The date upon which the last annual meeting of 
 the company was held; 
 
 (//) The amount of the cajtital of tht* company and 
 llic number of shares into which it is divided; 
 
 (i) The number of shares subscribed for and al- 
 lotted; 
 
 (y) The amount of stock (if any) issued free from 
 call; if none is so issued, this fact to be stated; 
 
 [k) The amount issued subject to call; 
 
 (?) The amount of calls made on each share; . 
 
 {m) The total amount of calls received; 
 
 (;/) The total nnount of calls unpaid; 
 
 (o) The total amount of shares forfeited; 
 
 (p) Thv total amount of shares which have never 
 been allotted or subscribed for; 
 
 iq) The total amount for which shareh(»lders of the 
 company are liable in respect of unpaid stock held by 
 them; 
 
 (2) The said summary nuiy, also, after gi\iug the 
 information hereinbefore required, gi -e in a concise 
 
 ' These returns may be inspected hy anyone interested, at the Pro- 
 vincial Secretary's Department, Toronto, on pay.v.dnt of the authorized 
 fee. 
 
 '^ 
 
 ill' 
 
ANNUAL STATEMENT AND SUMMARV, ETC. 
 
 157 
 
 re I' 
 lie 
 
 |i>y 
 
 he 
 lise 
 
 Pro- 
 
 form, sucli furtlier infoi'inatiou respectiiifj the alTairs of 
 the company as the directors may consitk-r expedient. 
 
 (3) The summary sliall also contain a list of persons 
 who, on the 31 st day of December previously, were share- 
 holders of the company; and such list shall state the 
 names alphabetically arranged, and the address and oc- 
 ( upation of each such person; the amount of stock held 
 by each; and the amount, if any. unpaid and still due by 
 each such person; 
 
 (4) Every company so long- as it carries on the busi- 
 ness of warehousiufi' crude jx'troleum shall state the fol- 
 lowing additional particulai's in the summary: — 
 
 (i.) The total quantity of crude i)i'troleum actually 
 held by the company for the purpose of an- 
 swering transportation and warehouse re- 
 ceipts, accepted orders, and certiticates of 
 crude petroleum. 
 
 (ii.) The total quantity of crude petroleum in re- 
 spect of which the comjiany as warehousemen 
 or carriers are liable to make delivery to other 
 persons. 
 
 [vis to returns by companies carrying on thi btisiness 
 of warehousing crude 'petroleum see also cap. 21!/, sec. 4-] 
 
 (5) The summary, and every duplicate thereof re- 
 quired by this Act, shall be written, or printed on only 
 one side of the sh^'et or sheets of pajter containing the 
 same. 
 
 (0) The sunnnary shall be vcM'itied by the atfidavit of 
 Ihe president and secretary, and if there are no such 
 etticers, or they, or either of them, are or is, at the pro- 
 per time out of this Province, or otherwise unable to 
 make the same, by th(> afrtdavit of the president or secre- 
 tary and one of the directors, or ' .,o of the directors, as 
 the case may re(iuire; and if tlu^ j)resident or secretary 
 dees not make or join in the affidavit, the reason thereof 
 shall be stated in the subs .itnted affidavit. 
 
 (7) One of the duplicate sumnuiries, with tlie affida- 
 ^''t of verification, shall be posted tip in a conspicuotis 
 
 List of 
 share- 
 
 Keturn as 
 to cinido 
 petroleum. 
 
 Mode of 
 writing thu 
 same. 
 
 Voriflca- 
 
 tion 
 
 tlieie)r. 
 
 I'oBtins 
 thereof. 
 

 t "* 
 
 i I 
 
 158 
 
 shareholders' and directors' manual. 
 
 Penalty for 
 default. 
 
 wXiVo P^^^*^^" '" *^^^ ^^^'^^ oflBce of tlie compauy iu Ontario, ou 
 vinciaisec- or befoi'L* tile 2nd day of February; and the eonipauy 
 shall keep the same so posted, until another summary is 
 lK)sted under the provisions of this Act; and the other 
 duplicate summary, verified as aforesaid, shall ou or be- 
 fore the 8th day of February next after the time herein- 
 before fixed for making the summary be transmitted, by 
 registered letter, to the Provincial Secretary and be ad- 
 dressed to him at the Parliament Buildi' gs, Toronto. 
 
 (8) If a company makes default in complying with 
 the provisions of this section, the company shall incur a 
 penalty of |20 for every day during which the default 
 continues, and every director, manager or secretary of 
 the company, who knowingly and wilfully authorizes or 
 permits such default, shall incur the like penalty. 
 When sec (9) This scctiou shall not applv to anv companv un- 
 
 tion uot to ,, r-i . .. f ^ 
 
 aiipiy. til the 1st day of February next after the first :51st day 
 of December, after the company has been organized, or 
 has gone into actual operation, whichever shall first hap- 
 pen, and shall not be held to apply to any company 
 which has ceased to can*}' on business; and upon its 
 being proved that any company to which this Act ap- 
 plies did not transact any business (other than the pay- 
 ment of taxes or the making of a return, or the furnish- 
 ing of any list, statement, or other information to the 
 Government of Ontario, oi* to any ofticer or department 
 thereof) during the year for which it is alleged a return 
 in accordance with the requirements of law has not been 
 , made, such compauy shall be deemed to have ceased to 
 carry on b\'siness within the meaning of this sub-section. 
 (10) This section shall not apply to any company 
 not incorporated for commercial, mercantile, manufac- 
 turing, trading, or business purposes, or objects, where 
 such company by its charter of incorporation is declared 
 to be exempt from the provisions thereof, or to any com- 
 pany not incorporated for any of the said purposes 
 which, on proof thereoi" being shown to the Lieutenant- 
 Governor in Council, is, ou, from and after a date to be 
 set forth in the order of the Lieuteuant-Goveruoi" in 
 Council iu that behalf, declared to be exempt. 
 
 Further 
 proviso. 
 
 i 
 
INSPECTION. 151) 
 
 Blank form of summaries, lists and affidavits are forwarded annu- 
 ally to companies by the Secretary's Department in ample time for 
 making the return. The sheets should be fastened with a clip or pin, 
 not gummed together. 
 
 Inspection. 
 HO. (1) Upon ail applicatiou by iiot less than one- The court 
 
 '^ may ap- 
 
 flfth iu value of the shareholders of the conipauy, ai'oiut an 
 
 . inspector. 
 
 Judge nui}', if he deeuis it necessary, appoint an inspector 
 to investigate the affairs and inanageic-'nt of the com- 
 pany, who shall report thereon to the Juu^e, and the ex- 
 pense of such investigation shall, in the discretion of the 
 Judge, be defra3'ed by the company, or by the applicants, 
 or partly by the company and partly by the applicants 
 as he may order, and, if he thinks tit, he may recpiire the 
 applicants to give security to cover the probable cost of 
 the investigation, and he may make necessary rules and 
 prescribe the manner in which and the extent to which 
 the inve»stigatioii shall be conducted; or the Judge may, 
 if he deems it necessary, examine the officers or directors 
 of the company under oath as to matters that come iu 
 (juestion. 
 
 (2) The company may by resolution passed at the R^fnyhiv 
 annual meeting, or at a special general meeting called company. 
 for the purpose, ajipoint an inspector to examine into 
 the aff; rs of the company. The inspector so appointed 
 shall have the same powers and perform the same duties 
 as an inspector appointed by a Judge, with this excep- Jj^J^j^^^,,"/"' 
 tion, that instead of making his report to the Judge he'"^^*''^'"'' 
 shall make the same in such manner and to such persons 
 as the comi)anv bv said resolution directs. 
 
 (a) It shall be the duty of all officers and agents of i^'^.'Ji^;;';"'' 
 the company to produce for the examination of JHiy|^jJ|;|j'j'^"^'"- 
 such insi)ector all books and documents in their custody 
 or power. Any such inspector may examine u[»on oath 
 the officers and agents of the company in relation to its 
 business, and may administer such oath accordinglv. '^''"•"'"a- 
 
 ' * " ' tion on 
 
 If any officer or agent refuses to produce any book oro^tii. 
 document hereby direeted to be produced, or to answer 
 any question relating to the affairs of the comptiuy, he 
 
---_■- -~,nfiijfa,jj^ 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 Penalty for shall iucui' a penalty not exceeding $20, in respect of 
 auction, each offence. 
 
 Contracts, Dividends, Etc. 
 
 S*^"'wheti **• ^^'^I'y contract, agreement, engagement or bar- 
 
 to be bind- jrain luade and every bill of exchange drawn, accepted or 
 
 ingoucom- '^ • '^ ■ *■ 
 
 indorsed, and ever^- promissory note and cheque made, 
 drawn or indorsed on behalf of the company b^- any 
 agent, officer or servant of the company', in general ac- 
 cordance Avith his powers as such under the by-laws or 
 resolutions of the company, shall be binding upon the 
 company; and in no case shall it be necessary to have 
 the seal of the company affixed to any such contract, 
 agreement, engagement, bargain, bill of exchange, pro- 
 missory note or cheque, or to prove that the same was 
 made, drawn, accepted or indorsed, as the case may be, 
 in pursuance of any by-law, resolution or special vote or 
 order; nor shall the person so acting as agent, officer or 
 servant of the company, be thereby subjected individu- 
 ally to any liability therefor. 
 
 Not to pur- S2. The company shall not under any circumstances 
 fn ouiei'^'^*^ nso any of its funds in the purchase of stock in any 
 uou°'* other corporation, unless and until the directors have 
 been expressly authorized by a by-law passed by them 
 for the purpose and sanctioned by a vote of not less than 
 two-thirds in value of the shareholders present in per- 
 son or by proxj' at a general meeting of the company 
 duly called for considering the subject of the by-law. 
 
 Liability S3. The directors of the company shall not declare 
 
 "ois diciar- or pay any dividend when the company is insolvent, or 
 
 dmid when ^^y dividend the payment of which renders the company 
 
 fs'inso"^ insolvent, or diminishes the capital thereof; but if any 
 
 vent, etc. (jirpptor present when such dividend is declared, forth- 
 
 Howa with, or if any director then absent, within twenty-four 
 
 mat'^'avoid ^^ouvs after lie has become aware thereof and able so 
 
 such liabii- ^^ ^q enters his written protest against the same, and 
 
 within eigut days thereafter causes such protest to be 
 
 notified, by registered letter, to the Provincial Secretary, 
 
 such director mav thereby, and not otherwise, exonerate 
 
 himself from liability. 
 
CONTRACTK, DIVIDENDS, E'I'C. 
 
 101 
 
 H4t. IS'o loan shall be made by the company to «iiy ^j^ '"au ijy 
 shareholder, and if such loan is made, all directors and J" ?'>*"" 
 other oilicers of the company making the same, and in 
 anywise assenting thereto shall be jointly and severally 
 liable to the company for the amount thereof, and also 
 to third parties to the extent of such loan with legal in- 
 terest, for all debts of the company contracted from the 
 time of the making of the loan to that of the repayment 
 thereof. 
 
 H5. The directors of the company shall be jointly 
 and severally liable to the labourers, servants and ap- 
 prentices thereof for all debts not exceeding one year's 
 wages due for services performed for the company while 
 they are such directors respectively; but no director shall 
 be liable to an action therefor, unless the company has 
 been sued therefor within one year after the debt be- 
 came due, nor yet unless such director is sued therefor 
 within one year from the time when he ceased to be such 
 director, nor ^et before an execution against the com- 
 I)any has been returned unsatisfied in whole or in part; 
 and the amount due on such execution shall be the 
 amount recoverable with costs against the directors. 
 
 Liahility of Dhector.i for ivayen. A person employed as foreman of 
 works, who hires and dismisses men, makes out pay rolls, receives and 
 pays out money for wages and does no manual labour, and in addition 
 to receiving pay for his own services at tlie rate of five dollars per day, 
 payable fortnightly, is paid for the use of machinery belonging to him 
 and of horses hired by him, is not a labourer, servant or apprentice within 
 the meaning of section 08 of the Joint Stock Companies' Letters Patent 
 Act, R. S. O. Cap. Ic7, and cannot recover against the directors person- 
 ally. 
 
 Welch V. Ellis, 22 A. R. Ont. 2;';j. 
 
 The section inentioned in this judgment is identical with section 85 
 of this Act. 
 
 Lialiility 
 of dirootora 
 for watjes. 
 
 HO. The comiiany shall be subject to the provisions ^viniiinR 
 
 ^ "^ •• ' up Acts to 
 
 of any Act of the Legislature for the windmg up of joint apply- 
 stock companies. 
 
 W.S.D.M.— 11 
 

 f 
 
 
 1 
 
 '41 
 
 4 ! 
 
 ! ; 
 
 
 '■i' I 
 
 162 
 
 Accounts 
 may lie 
 aiKiiteil. 
 
 shahehoi.ders' and dihectors' manual. 
 
 Auditors and theiu Duties. 
 
 H'7- If tho special Act, letters patent or tlic^ bylaws 
 of the company so direct, the accounts of the company 
 shall be examined once at least in every year, and the cor- 
 rectness of the balance-sheet shall be ascertained, by an 
 auditor. 
 
 Apjioint- 
 inent of 
 flrst audi 
 tor. 
 
 iS^i. Such auditor nuiy be appointed by resolution at 
 a general meetiu}^ of the company; if so appointed, he 
 shall hold oflice until the next annual general meeting 
 thereafter unless jireviously removed by a resolution of 
 the shareholders in general meeting; subsequent audi- 
 tors may be api)ointed by a resolution of the company in 
 general meeting. 
 
 SO. The said auditor may be a shareholder of the 
 Himiehoid- company, but no person shall be eligible as an auditor 
 who is interested, otherwise than as a shareholder, in 
 any transaction of the company; and no director or 
 other officer of the company shall be eligible during his 
 continuance in office. 
 
 Auditors 
 may bo 
 
 Keimnior- 
 
 ation of 
 auditors. 
 
 Auditors 
 re-eligible. 
 
 OO. The remuneration of the auditor shall be fixed 
 by the company in general meeting. 
 
 in. Any auditor shall be eligible for re-appointment. 
 
 Auditors to «H8. Every auditor shall be supplied with a copv of 
 
 examine 
 
 accounts, the balance sheet, and it shall be his dutv to examine 
 the same with the accounts and vouchers relating 
 thereto. 
 
 .vccess of 1>i|. Every auditor shall have a list delivered to him 
 
 books, etc. of all books kept by the company, and shall at all rea- 
 sonable times have access to the books and accounts 
 of the company. 
 
 04. The auditor shall make a report to the share- 
 holders upon the balance sheet and accounts, and in 
 every such report he shall state whether in his opinion 
 the balance ^^heet is a full and fair balance sheet, anv 
 properly drawn up so as to exhibit a true and correci 
 view of the stat<. of the conipany's affairs, and, in case 
 he has called for explanations, or Information from the 
 
 Auditors to 
 make re - 
 jiortB CO 
 sharehold- 
 era. 
 
„ 1 .. .Uk_ 
 
 i-e- 
 lin 
 Ion 
 
 lllv 
 
 I he 
 
 FEES, ETC. 163 
 
 directors, or officers of the company, whet her snoli ex- 
 plcination or information has been given by the direc- 
 tors, and whetlier it lias been satisfactory. 
 
 Fees, Etc. 
 
 !I5. (1) Tlie Lieutenant-Governor in Council may, Keeaou 
 from time to time, establish, alter and regulate the tarilf eutfettfAo 
 of the fees to be paid on applications under this Act ; order^lu-^^ 
 may designate the department or departments through 
 which the issue of letters patent, or supplementary 
 letters, or of licenses should be made; and may pre- 
 scribe the fonns of proceeding and record in respect 
 thereof, and all other matters requisite for carrying out 
 the objects of this Act. 
 
 (2) Such fees may be made to vary in amounl. under May iie 
 any rule or rules — as to nature of company, amount of '^"'^ ' 
 capital and otherwise — that may be deemed expedient. 
 
 (3) No step shall be taken in any Department to- iiestiic- 
 wards the issue of any letters patent or supplementary 
 letters patent, or license under this Act, until after all 
 
 fees therefor hav(» been duly paid. 
 
 The following is a schedule of feas payable prior to the issue of 
 charters : — 
 
 When the Charter is for an Educational Institution SIO UO 
 
 When the Charter is for a Cheese or Butter Company 10 00 
 
 For a Charter when the proposed capital of the Company is 
 
 *1,000,000 or upwards 'ioK On 
 
 When it is »oOO,000 but is less than $l,O00,00<) 200 OO 
 
 When it is $'200,0o0 but is less than f oOU,(MtO 150 00 
 
 When it is »100,000 but is less than |200,000 100 <M» 
 
 When it is »oO,00O but is less than »100,00(l od (H» 
 
 When it is |'2o,()00 but is less than 150,000 40 Ou 
 
 When it is less than $2">,0tH» but is more than $2,000 30 GO 
 
 When it is »2,000or less 20 OO 
 
 Fees for all Supjjlementary Letters Patent to be S2.1, unless the 
 capital stock of the Company is inci-eased, when the same fee shall be 
 payable as would be charf»ed if the Company was being incorporated, 
 but only with reference to tlie increased capital. 
 
 The fee to be charged for a License granted under an Act author- 
 izing Corporations and Institutions incorporated out of Ontario to lend 
 and invest moneys therein, R. S, O. lHlt7, shall be according to the 
 capital of the Company, and be the same in amount as if the Com- 
 pany was being incorporated. 
 
I 
 
 M 
 
 164 
 
 Certain in- 
 formalities 
 uot to in- 
 validate 
 letters i>at- 
 9uti etc. 
 
 False re- 
 turns, etc. 
 
 SHAUEIIOLDKUS' ANI» DIKECTOK.s' MANTAL, 
 
 The fee to be paid by a Coiiipniiy whose ca| 'ttvl in over 13,000, for 
 the notice in The (luzi'tln, required liy Hue. i of Cap. "21.') 11. K. O., respect- 
 ing the flhanyiiiK of the Names of Conipiinies, is SlJi ; if the capital is 
 ?:J,00() or less, *">. 
 
 SMJ. Tlic piMivisioiis of lliis iind any other Act relat- 
 ing to niattt'fs jtrcliniinary to (lie issue of Ihe letters 
 patent shall be deemed to be direetorv only; and no 
 letters i)at<'nt. or snpiilenientary letters i)a(ent, or 
 lieense, notice, order or other proceedinji; by oi' on behalf 
 of the Lieutenant-dovernor in ("ouncil. I'rovincial Secre- 
 tary or other (Jovernnient or dejiart mental otiicer nmler 
 this or any other Act shall be held to be void or voidabh* 
 on account of any irreojularity, or otherwise, in respect 
 of iiny matter jireliminary to tiie issue of the letters 
 patent, or supplementary letters patent, license, notice, 
 order or other [»i'oceedinji\ or of any alterations in any 
 petition or papers submitted in order to make theni 
 comply with this or any other Act, or v.ith the depart- 
 mental practice thereunder. ■ 
 
 LiMMLiTV i"()U F.Ai.sE Statements. 
 
 l>7.(li If any person liv any return. re]»(H't. certi- 
 ficate, balance sheet, or other document required by or 
 for the purposes of this Act, wilfully makes a statement 
 false in any material particular, he shall be liable on 
 conviction on indictment to imprisonment for a term not 
 exceeding six months, with or without hard labour, and 
 on summary conviction to imprisonment not exceedinji" 
 three months, with or without hard labour, and in either 
 ease to a line of |10() in lieu of or in addition to such 
 imprisonment as aforesaid. 
 
 (2) A person charf^ed with an offence under this sec- 
 tion may, if he thinks fit. tender himself to be examined 
 on his ov.'n behalf, and thereupon may give evidence in 
 the same manner and with tlie like efleet and conse- 
 quences as any other witness. 
 
 [i4>! to the Uuh'dity of directors and others for untrue 
 Mo.temcnts In a 2^'>'0'<P<^ct us advertisement or notice, see 
 Cap. ;?itf.] 
 
FOllFEITURE OR SUIIHENDEK OF A CHARTER, ETC. 
 
 IQl 
 
 u 
 
 Im 
 
 FoRFEITrUE OK SrUUEN'DEK OR REVOCATIO>f OF A 
 
 Charter, Etc. 
 
 UH. If a foiiii)anv iiicorjioratod bv loHors i)ati'ut F".''if»'it"»'o 
 (loos not v:o into actual oix'ration within two xohvh aftor fomon- 
 incorporation, or, for two consecutive years, does not 
 use its corporate powers, such ])owers, except so far as 
 is necessary for windinji- u]> Ihe company, shall be for- 
 feited, and its name, in whole or in part, may be {jjranted 
 to another company, notwithstanding? anythinj;' contained 
 in section 10 of this Act; an<l. in any action or proceed- 
 ing where such non-user is alleged, proof of user shall 
 lie U];on the company, provided, however, that no such 
 forfeiture shall alVccI prejudicially the rights of <-redi- 
 tors as they exist at the date <tf such forfeitui-e. 
 
 !MI. The charter of a comijanv incori)orat('d bv Revocation 
 
 * • ' '^ of charter. 
 
 letters patent may, at any time, be declared to be for- 
 feited, and may be revoked and made void by an older 
 of the Lieutenant-Governor in Council on sufficient cause 
 beinj? shown to the Lieutenant-Governor in Council in 
 that behalf, and such forfeiture, revocation and makin}; 
 void may be upon such conditions and sul»ject to such 
 ]»rovisions as to the Lieutenant-Governor mav seem 
 I)roper. 
 
 lOO. If a coiupany carries ou business when the inaivi.iuai 
 number of its shareholders is less than five for a period i<>v whole 
 
 . 1 ,. 1 ,11 in ofthecoiu- 
 
 of SIX months after tlie number has been so reduced, imny's 
 
 . 1111.1 1 debts if 
 
 everv person who is a shar(>holder in the companv dur- business is 
 
 ' 1 . 1 . . 1 . <. ' 1 carried on 
 
 ing the time thiU it so carries on busuiess after such witi. less 
 period of six months, ami is coj-nizant of the fact that uiembon^ 
 it is so carrying" on business with less than five share- 
 holders, shall be severalh" liable for the payment of the 
 whole of the debts of the company contracted during such 
 time, and may be sued for the same without the joinder 
 In the action or suit of the company or of any other 
 shareholder; but anv shareholder who has become aware 
 that the company is carrying on business when the num- 
 ber of its shareholders is less than five, may serve a pro- 
 test in writing on the company, and may, by registered 
 letter, notify the Provincial ^>ecretary of such protest 
 
 •*v^ / 
 
166 
 
 SHAKEHor-DEUS AM) KIHEr'TOHS MAXT'AL. 
 
 A charter 
 may liesiir- 
 reiirtered. 
 
 liaving been served, and of the facts ni»oii which it is 
 based, and sudi sliareliolder may tlieieby, and not other- 
 wise, from tlie date of liis said protest and notitication, 
 exonerate liimself i'vom liability; and if after notice from 
 tlie Provincial Senctary the c()mi)any refuses or nejj- 
 lects to bring the number of its shareholders up to Ave, 
 such refusal or neglect may, upon the report of the Pro- 
 vincial Secretary, be regarded by the Lieutenant-(Jover- 
 nor in Council as sufficient cause for the revocation of 
 the company's charter. 
 
 lOl. The charter of a company incorporated by 
 letters patent may be surrendered if the company proves 
 to the salisfaclion of the Lieutenant-Governor in 
 Council: 
 
 ((/) That it has no debts existing, or other rights in 
 question, oi', 
 
 (h) That it has parted with its property, divided its 
 assets rateably amongst its shareholders, and has no 
 debts, or liabilities, or. 
 
 (c) That the debts and obligations of the company 
 have been duly ])rovided for or protected, or that the 
 creditors of the company or other persons holding them 
 consent, 
 
 and that tin? company has given notice of the application 
 for acceptance of surrender as may be required by regu- 
 lations made under section 11 of this Act; and the Lieu- 
 tenant-Governor in Council, upon a due compliance with 
 the provisions of this section, may accept and direct the 
 cancellation of the charter, and may, by his order, fix 
 a date upon and from which the company shall be 
 deemed to be dissolved, and the company shall thereby 
 and thereupon become dissolved accordingly. 
 
 Extension' of Powers. 
 Additional lOiJ. In case a resolution, authorizing an applica- 
 
 liowers , , a IT Mr 
 
 wiiich piay tiou by petition to the Lieutenant-Governor therefor, is 
 by supple- passcd by a vote of not less than two-thirds in value of 
 
 inentary . . , , . ■, . . , 
 
 letters pat- the shareholders present in person or by proxy at a gen- 
 
 Gilt * 
 
 eral meeting of the company, duly called for consider- 
 
AMAF/JAMATION OF COMPANMES. 
 
 1G7 
 
 ing tlif siibj(!et of such resolution, the Lieuienant-CJov- 
 truor in Couuiil nmy, from time to time, direct the issue 
 of sui»plementarv letters patent to the company embrac- 
 ing any or all of the following matters: 
 
 Ui) Extending the powers of the company to any 
 objects within the scope of this Act, whiL-li the com|>any 
 may desire. 
 
 This doea not empower companios to obtain supplementary letters 
 patent for objects totally different from tlif^se set out in the ori^^inal 
 charter. There must be some degree of similarity in the new objects as 
 compared with the former. For instance, a company known as The 
 London Creamery Company could not by supplementary letters and 
 under tlie same name acquire the ri{;ht to do a mining business. 
 
 ib) Providing for the formation of a reserve fund; 
 
 (c) Varying any provision contained in the letters 
 patent, so long as the alteration desired is not contrary 
 to the provisions of this Act; 
 
 ((/) Making provision for any other matter or thing 
 in respect of which provision might be made by original 
 letters patent under this Act, 
 
 Amalgamation of Companies. 
 
 I Oft. (1) Any two or more companies incorporated 
 under the laws of this province, and having objects with- 
 Id the scope of this Act. may, in the manner herein pro- 
 vided, unite, anuilgamate and consolidate their stock, 
 property, businesses and franchises, and may enter into 
 all contracts and agreements therewith necessary to 
 such union and amalgamation. 
 
 {'2) The directors of the companies proposing to so 
 amalgamate or consolidate as aforesaid, m.ay enter into 
 a joint agreement, to be executed under the corporate 
 seal of each of the said companies, for the amalgamation 
 and consolidation of the said companies, prescribing the 
 terms and conditions thereof, the mode of carrying the 
 same into effect, the name of the new company, of which 
 the last word shall be the word " Limited," the number 
 of the directors thereof and who shall be the first direc- 
 tors thereof anc". their places of residence, the number 
 
 Amalga- 
 mation of 
 cou)i)aniofl. 
 
 .Joint 
 
 asreoineiit 
 
 between 
 
 directors 
 
 proposing 
 
 to amalf^a- 
 
 mate, etc. 
 
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 23 WEST MAIN STREET 
 
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 li 
 
 %Q8 .shareholders' and directors' manual. 
 
 of shares of the capital stock, the amount of par value of 
 each share, and the manner of convcrtinj? the capital 
 stock of each of the said corporations into that of tlie 
 new corporation, and ho>v, and when directors of tlie 
 new eorjwration sliall be elected, Avith such other details 
 as they deem necessary to perfect the new or}>anizaTiou 
 and the consolidation and amalgamation of the said 
 companies and the after management and working 
 thereof. 
 
 To be sub- 
 mitted to 
 
 (8) The agreement shall be submitted to the share- 
 sharohoid holdcrs of each of the said companies at a meeting 
 
 eis of eacii ' 
 
 conipany thereof Called in accordance with the bv-laws, and luld 
 
 lor consid- 
 eration, separately, for the purpose of taking the same into cim- 
 
 sideration. 
 
 Vote by 
 ballot to 
 be taken. 
 
 (4) At such meetings of shareholders, the agreement 
 shall be considered, and a vote by ballot taken for the 
 adoption or rejection of the same, and each shai'e shall 
 entitle the holder thereof tc one vote, and the ballots 
 shall be cast in person or by proxy; and if two-thirds 
 of the A'otes of all the share, olders of each of such euin- 
 panies are for the adoption of the agreement, then ihat 
 fact shall be certitied upon the agreement by the serie- 
 tar^' of each of such companies under Ihe corjiorate seal 
 thereof; and if the agreement is so adopted at the re- 
 spective meetings of the shareholders of each of the said 
 companies, the comi)anies by their Joint petition may. 
 through the Provincial fc^ecretary, apply to the Lieuten- 
 ant-Governor in Council for letters ]>atent contirniing 
 The said agreement. 
 
 {')) With their joint petition, the comi)anies shall 
 
 deposit with the I'rovincial Secretary, an original of 
 
 uewoor- the agreement, and shall furnish such further and other 
 
 poration to " ' 
 
 i.ostoBs documents and evidence in this behalf as the Provincial 
 powers. Secretarv mav reciuire, and the Lieutenant-liovernor m 
 
 etc., and be • ■ ' 
 
 subject to Council may by letters j)atent contirni sinli agreement. 
 
 duties, etc., j ^ i ^^ 
 
 of each of and ou and from the date of the letters ])atent, coniirm- 
 
 iiuited so- 
 cieties, iiig the said agreement, and from such dat(» only, the 
 
 said companies sliall be deemed and taken to be amalga- 
 mated and consolidated, and to form one company by the 
 
 Upon com 
 pletion of 
 consolida- 
 tion, tbo 
 
» ^i jWi%ii » i i ftt ''«^'-*'W»!*]J''^*-'" 
 
 RE-INC()RI'OUATION' HY IXCOIU'OHATED COMPANIES. ]G}) 
 
 uame in tlie said agreement, and letters patent provided, 
 and the consolidated company shall possess all the pro- 
 perties, real, personal ard niixi'd, rights privileges and 
 lianchises, and be subject to all the liabilities, contracts, 
 disabilities and duties of each of the companies so con- 
 solidated. 
 
 (0) All rights of creditors to obtain pavment of their P»"oy'fo ^^ 
 
 \ ' fi 1 - to riRlits of 
 
 claims out of the propertv. rights and assets of the com- crcaitors, 
 
 ^ ^ • " etc., of 
 
 i»anv liable for such claims, and all liens upon the pro- e''i»pr o' 
 perty, rights and assets of either of such companies tious. 
 shall be unimpaired by such consolidation, and all debts, 
 contracts, liabilities and duties of either of the said com- 
 l>auies shall thenceforth artacli to the consolidated com- 
 pany and be enforced against it to the same extent as 
 if the said debts, contracts, liabilities and duties had 
 been incurred or contracted bv it. 
 
 Proviso as 
 to ectioiis 
 aghinst. 
 
 Notice of 
 
 luiialgauia- 
 
 tioii. 
 
 (7) No action or proceeding, by or against the said 
 corporations so consolidated, or either of them, shall 
 abate or be atfected by such consolidation, but for all 
 the purposes of such action or proceeding. s\ich corpora- 
 tion may be deemed still to exist, or the new corpora- 
 tion may be substituted in such action or proceeding in 
 the place thereof. . 
 
 (8) The Provincial Secretary shall give such a notice 
 respecting the am;»lganuition of the said companies as 
 the regulations made under section 11 of tliis Act may 
 prescribe. 
 
 Re-in'cori'ohation hy 1> ' t;.Hi'(H{ATEi> Companies. 
 
 104. (1) Anv comi>anv incorporated, for purposes sai.sistinM 
 or objects within the scope of this Act. or within the i"b^v api'iy 
 scope of this Act as it may be hereafter aiuended, whe- Act. 
 ther under a sjiecial or a general Act, and being at the 
 time of its application a subsisting and valid corpora- 
 tion, may apply for letters patent under this Act; and 
 the Lieutenant Governor in ('ouncil, upon proof that 
 notice of the aiiplication has been inserted for four 
 weeks in the (Jntario (iazttttj, mav direct the issue of 
 
-mm> ' 
 
 i^ 
 
 i 
 
 '"{ 
 
 I I 
 
 170 shareholders' and directors' manual. 
 
 letters patent incorporating the sliareliolders of tlie said 
 company as a company under tliis Act, and tliereupon 
 all tlie rights or obligations of the former company shall 
 be transferred to the new company, and all proceedings 
 may be continued aad commenced by or against the new 
 company, that might have been continued or commenced 
 by or against the old company, and it shall not be neces- 
 sary in any such letters ijatent to set out the names of 
 the shareliolders; and after the issue of the letters 
 patent, the company shall be governed in all respects by 
 the provisions of this Act, except that the liability of 
 the shareholders to creditors of the old company shall 
 remain as at the time of the issue of the letters patent. 
 
 (2) Where a company is re-incorporated under the 
 preceding sub-section the Lieutenant-Governor may by 
 the letters patent, increase the capital stock of the com- 
 pany to any amount which the shareholders of the com- 
 pany applying for re-incorporation may, by a resolution 
 passed by a vote of not less than two-thirds in value of 
 those present in person or by proxy at a general meeting 
 of the company duly called for considering the same, 
 have declared to be requisite for the due carrying out of 
 the objects of the company. 
 
 (3) Tlie resoIuti(>n may prescribe the manner in 
 which the new stock is to be allotted; and in default of 
 its so doing, the control of the allotment shall vest ab- 
 solutely in the directors of the new company. 
 
 Existing 105. Where an existing company applies for the 
 
 may apply issue of letters patent under the provisions of the pre- 
 patent ^'* ceding section, the Lieutenant-Governor may by the 
 
 with GX" 
 
 tended" letters patent extend the powers of the company to such 
 powers. Q^i^^y objects Within the scope of this Act as the appli- 
 cants desire, and as the Lieutenant-Governor thinks tit 
 to include in the letters patent, and may by the said 
 letters patent name the tlrst directors of the new com- 
 pany, and the letters patent may be f>^ the new company 
 by the name of the old company or by any other name. 
 
COMPANIES IXCORPOH.tTEI) HV SPECIAL A<T. 
 
 171 
 
 the 
 ch 
 
 tit 
 laid 
 1)111- 
 
 luy 
 
 inc. 
 
 Letters Patent to Comi'anies Incokpohated hv 
 
 Special Act. 
 
 lOO. Where any company has been incorporated by 
 a special Act for purposes or objects within the scope 
 of this Act, then, in case a resolution authorizing an 
 application by petition to the Lieutenant-Governor there- 
 ior is passed by a V'>te of not less than two-thirds in 
 value of the sharehoh.'ers present in person or by proxy, 
 at a general meeting of the company, duly called for con- 
 sidering the subject of such resolution, the Lieutenant- 
 Governor in Council may from time to time direct the 
 issue of letters patent to the company, embraciufj any 
 or all of the following matters: 
 
 (a) Extendin ; the powers of the company to any 
 objects within the scope of this Act, which the company 
 may desire; 
 
 (/>) Limiting or increasing tlu' amcant which the 
 <ompany may borrow upon debenture^,, or otherwise; 
 
 (c) Providing for the formation of a ivscrve fund; 
 
 ((/) Varying any provision contained in the special 
 Act. so long as the alteration is not contrary to the pro- 
 visions of this Act; 
 
 {() Making provision for any other matter or tiling 
 in respect of which piovisiou might have been made had 
 the company been incorporated under this Act. 
 
 lOT. (ll Any com]»any, incorporated otherwise than 
 by or under the authority of an Act of the Legislature 
 of Ontario, desiring to carry on any of its business which 
 is within thie scope of this Act, within the Province o' 
 Ontario, may, through the Provincial Secretary, petition 
 the Lieutenant-Governor in Council for a license so to 
 do. and the Lieutenant-Governor in Council may there- 
 upon authorize such company to use, exercise, and en- 
 joy any powers, privileges juid rights set forth in the 
 said license. 
 
 Letters 
 'latent fur 
 certain 
 purposeB 
 may bo 
 gi'uhted to 
 conipauies 
 incorporat- 
 ed under 
 special 
 Acts. 
 
 Cortftin 
 powerH 
 may be 
 ^'ranted l)y 
 license to ' 
 extra-pro- 
 vincial 
 uompaniee. 
 
17'2 
 
 SHAHEHOLDEUS AND DIUEOTOHS MANUAL. 
 
 m 
 
 I 
 
 Copy of Act 
 or other iu- 
 Htruuieiit 
 of incor- 
 poration, 
 witli power 
 of attorney 
 to 1)0 do- 
 poBited 
 witli I'ro- 
 vincial 
 Secretary. 
 
 Power of 
 Attorney. 
 
 Notice, 
 
 l',vi<l 'nco 
 of liBvint; 
 been li- 
 censed. 
 
 Iteturn. 
 
 (2) No siuii lieoiise shall be issiiofl until such com- 
 pany has dt'i»o>«!itL'd in the ollicc of the rroviucial Secre- 
 tary a true copy of the Act, charter or other instrument 
 incorporatinj,' the company, veritied in the manner which 
 may be satisfactoiy to the Lieutenant-Governor in Conn 
 cil, tojjether with a duly executed power of attorn»'y, 
 under its common seal, empowerinfr some person therein 
 named and residinjjc in the Province of Ontario to art 
 as its attorney and to sue and be sued, plead or be im- 
 pleaded in any ('ourt. and, jreuerall}', on behalf of such 
 company and within the said province, to accept service 
 of process and to receive all lawful notices, and for the 
 purposes aforesaid to do all acts aiid to execute all de<'ds 
 and other instrumenls relatiuj; to the matters within 
 the scope of the power of attorney, and such company 
 may from time to time by a new or other power of at- 
 torney, executed and dep(»sited as aforesaid, ai>poinl 
 ajiother attorney within ihe province for the purposes 
 aforesaid to replace the attorney formerly appointed. 
 
 (3) Such notice of the fi'ranting; of the said license 
 shall be given forthwith by the I'rovincial Secretary in 
 The G((zctte as the reoulations made under section 11 
 of this Act hereof may prescribe. 
 
 (4) The license, or any exemplilication thereof under 
 the Great Seal of Ontario, shall be sulhcient evidence 
 in any proceeding in any ( V)urt in this province, of the 
 due licensing of the company as aforesaid. 
 
 (5) A company licensed as aforesaid shall, on or 
 before the 8th day of February in every year during the 
 continuance of such license, make to the Provincial Sec- 
 retary a statement, according to a form approved of by 
 Ihe Lieutenaivt-Governor in Council for the purpose, oon- 
 tjiining information similar to that required under sec- 
 tion 79 of this Act, or so much thereof as may be pre- 
 scribed in such form. 
 
 (G) If a company makes default in complying with 
 the provisions of this section, the company shall incur 
 ii penalty of |20 for every day during which the default 
 
LICENSE TO EXTUA-PROVIXCIAL COMPANY. 
 
 172a 
 
 The petition required by sub-section one should be signed by the 
 Executive Officers of tlie company, and noaied with its common seal. 
 It should set out such material facts as the date and place of incorpora- 
 tion, the law or laws under which it was incorporated; the powers of tlie 
 company; its capital, specifyiu}^ the amount subscribed for and paid up, 
 etc., etc. Evidence of the authority of the l'>xecutive to make the apjdi- 
 cation should also be furnished, and may consist of a duly verified resolu 
 tion of the company, authoriziiif^ the application for license. The copy 
 of tiie Act, charter, or other instrinnent incorporatinj; the company 
 should be verified by the officer issuinj^ or havinj^ the custody of the 
 originals. For instance, a company incorporated at Ottawa must have 
 the copy of its charter verified by the Department of the Secretary of 
 State; a company incorporated in England or Scotland must furnish a 
 copy of its Memorandum and Articles of Association, verified by Ihe 
 Registrai of Join*; Stock Con.'">anie8 ; while a company incorporated in 
 any one of the United States must furnisii a copy of its charter or in- 
 strument of incorporation, verified by the Secretary of State, or other 
 proper State officer. Notarial or other unofiicial copies of these docu- 
 ments cannot under the practice of the Department be accepted. 
 
 The Power of Attorney should follow as nearly as possible the lan- 
 guage of the Statute, and should be duly verified. 
 
 The fee for the license will depend upon the nominal capital of ll:e 
 company, and will be according to the Schedule given on pt.ge 103. 
 
 No. 56.— FORM OF PETITION FOR LICENSE. 
 
 To His Honour the Lieutenant-Governor of the Province of Ontario, 
 in Council : 
 
 The Petition of Limited, Humbly she.veth : 
 
 1. That your petitioners were incorporated under the ' Companies, 
 
 Act of the Dominion of Canada, under the name of 
 
 Limited. 
 
 2. That the head office of your petitioners is au'. ahvays has been in 
 the City of 
 
 3. That the authorized capital stock of your petitioners is the sum 
 
 of 5 of which I has been subscribed 
 
 and issued and fully paid up. 
 
 4. That the business carried on by your petitioners is a 
 
 business. 
 
 5. That by the charter of your petitioners they are authorized to 
 carry on the following business (as Dealer.s in Hardware, Iron, and 
 General Merchandise). 
 
 1 Here set out the law or laws under whiob the Company wa^ iuf orporated. 
 
1726 
 
 HIIAUEHOLDEUS AN!) DIUECTOUS MANUAL, 
 
 6. That your petitioners desire that a license may be issued to them 
 under the provisions of sec. 107 of K. S. O. 18!)7, chap. IDl, authorizing 
 your petitioners to use, exercine and enjoy all the powers, privileges 
 and rights as granted to them by the Charter aforesaid. 
 
 Your petitioners therefore pray that Your Honour will be pleased 
 to issue tt license to your petitioners atitliorizing your petitioners to use, 
 exercise and enjoy all the powers, privileges and rights set forth in the 
 Charter as aforesaid. 
 
 And your petitioners, as in duty bound, will ever pray, etc. 
 
 For signature of President. 
 For signature of Secretary, 
 
 i;l 
 
 No. f)?.— FORM OF POWER OF ATTORNEY. 
 
 Know all men by these presents, that The 
 
 Limited, for causes and considerations it thereunto moving, has made, 
 nominated, constituted and appointed, and by these presents does 
 
 make, nominate, constitute and appoint of the City 
 
 of , Merchant, the true and lawful attorney of The 
 
 Limited, to act as its attorney, and to sue or to be sued, 
 
 plead or be impleaded, in any Court, and generally on its behalf and 
 within the Provi<ice of Ontario, to accept service of process and to re- 
 ceive all lawful notices, and for the purposes aforesaid to do all acts, and 
 to execute all deeds, and otlier instruments, relating to the matters 
 
 within the scope of this Power of Attorney ; and the said The 
 
 Limited, do hereby confirm and agree to confirm 
 
 all and singular what its attorney aforesaid shall lawfully do or cause to 
 bo done in the premises by virtue hereof. 
 
 In witness thereof the corporate seal of The 
 
 Limited, has been hereunto affixed, and the hands of its President and 
 
 Secretary have hereunto been set this day of 
 
 in the year of our Lord one thousand eight hundred and ninety 
 
 Witness. 
 
 I Seal. I 
 
 For signature of Preoident. 
 For signature of Secretary. 
 
 ir 
 
COMPANIES IXCOIU'OUATEI) HV h?ECIAL ACT. 
 
 178 
 
 oontimu's, and every (lircctor, nianajjer, or secretary of 
 the company, who knowiiijriy and wilfully authorizes or 
 permits such default, shall incur the like penalty. 
 
 (7) The Lientenant-iiovt'rnor i!i Council mav, bv anivnait>(or 
 
 ' • * default. 
 
 (>rder in Council. t(> be published by the I'rovincial Sec- 
 retary in Tlir (hizi'tte, and otherwise as may be pre- 
 scribed by the said re<>uIations. suspend, or revoke and 
 make null and void any livcnse yranl«'d. under this sec- 
 tion, to any comi)any which refuses or fails to comply 
 with any of the j)rovisions of this section, and. notwith- 
 standing such suspension or revocation, the rights of 
 < reditors of the company shall reniiun as at the time of 
 such suspension or revocatiuu. 
 
174 
 
 .SH.\REHOLDEK.s' AND DmECTOU.s' MANUAL. 
 
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SCHEDILES. 
 
 176 
 
 SCHEDULE B, 
 
 {Section 10). 
 
 PETITION. 
 
 TO HIS HONOUR Etc., Etc., Etc. 
 
 Lieutenant-Governor of the Province of Oittnrio in Council: 
 
 THE PETITION of 
 
 
 Humbly sheiceth aafolloicg :- 
 
 1. Your Petitioners are desirous of obtaining by letters patent, 
 under the Great Seal, a charter, under the provisions of The Ontario 
 Companies' Act, constituting,' Your Petitioners and such others as may 
 become shareliolders in tlie Company thereby created a body cor- 
 porate and politic under the name of The 
 
 Company, Limitek, or such other name as shall appear to Your Honour 
 to be proper in ihe premises. * 
 
 2. Your Petitioners have satisfied themselves and are assured that 
 the corporate name under which incorporation is souf^ht is not on any 
 public ground objectionable, and that it is not tliat of any known com- 
 pany, incorporated or unincorporated, or of any partnership, or 
 individual, or any name under which any known business is being 
 carried on, or so nearly resembling the same as to deceive* 
 
 3. Your Petitioners have satisfied themselves and are assured that 
 no public or private interest will be prejudicially affected by the incor- 
 poration of Your Petitioners as aforesaid. f 
 
 4. Your Petitioners are of the full age of twenty-one years. 
 
 'y. The object for which incorporation as aforesaid is sought by Your 
 Petitioners is to 
 
 6. The undertaking of tlie company will be carried on at {or from) 
 , which is {or are) within the Province of Ontario. 
 
 7. The head olHce of the Company will be at 
 
 8. The amount of the ciipital stock of the Company is to be 
 
 dollars. 
 
 9. The said stock is to be divided into 
 
 shares of dollars each. 
 
 * Add ht're when proper " excejit the name ' ,' and Your 
 
 Petitioners elsewhere show that tiiey have received the necessary consent in 
 writing under section 10 of the said Act to the use of the name applied for." 
 
 + If otherwise, then the interests liable to be ho affected shiill l)e set out 
 at length by affidavit to be briefly referred to iiere. 
 
170 
 
 SHAUKIIOI.DEUS ANM) 1)II!K(T( tliS MANTAL. 
 ]0. The number of the Board of Directors of the Company is to be 
 
 11. The said 
 
 are to be the provisional directors of the Company. 
 
 12. By subscribing^ therefor in a Memorandum of A<{reement, duly 
 executed, in duplicate, with a view to tiio incorporation of the Company, 
 Your Petitioners have taken the amounts of stock set opposite their 
 names. 
 
 Petitioners. 
 
 Amount of stock 
 subscribed for. 
 
 
 » 
 
 Note. — It any piiynifnt, in cash or otherwise, has actually het-n made by 
 any iwtitioner on his Nt(xjk, particulars tlicreof may be set out hero. 
 
 YOUR PETITIONERS therefore pray that Your Honour 
 may be pleased, by Letfci -^ Patent under the 
 Grep.t Seal, to grant a Charter to Your Peti- 
 tioners con8titutinj» Your Petitioners, and such 
 others as have or may become subscribers in the 
 Memorandum of Aj^reement and stock-book of 
 the Company thereby created, a body corporate 
 and politic for the due carrying out of the 
 undertaking aforesaid. 
 
 And Your Petitioners, as in duty bound, will 
 ever pray. 
 
 *T3 
 
 a 
 
 CO 
 
 o 
 a 
 o 
 
 Dated at this. 
 
 day of. 
 
 .18 
 
FORMS. 
 
 Not E.— The following Forma are drawn so as to actually represent 
 the steps taken in the forniiition of a company by the name of The 
 Hamilton Stove Company, Limited, and also in matters which may arise 
 subsequent thereto. 
 
 The Forms are to be changed to suit the circumstances in each case, 
 but must be substantially as those given hereunder. 
 
 A the 
 
 d. will 
 
 FORM NO. 1. 
 
 PROSPECTUS OF THE HAMILTON STOVE COilPANY, 
 
 LIMITED. 
 
 Capital *200,(l00, in 8i4,00(i Shares of §50 each. 
 
 Provinioiuil Diiectois : 
 
 Wu.i.iAM .John Thojias, Esq., Hamilton ; Thomas Tayi.ou, Knq., 
 Hamilton ; and Thomas BitUiHT Taylou, Esq., Hamilton. 
 
 Si'cri'tarij : 
 Thomas Taylob. 
 
 Bankers : 
 The Bank of Hamilton. 
 
 ? 
 
 >t3 
 
 o 
 
 B 
 a 
 
 .18 
 
 The Hamilton Stove Company, Limited, is being formed for the 
 purpose of carrying on the business of manufacturing stoves and fur- 
 naces of all descriptions. 
 
 Owing to the largely increased demand for these articles, as coir 
 pared with anv orevious period, and the facilities which this city affords 
 for their manufacture, a protit of at least 20 per cent, is assured. 
 
 I'or this purpose, the Company propose to erect on John street north, 
 ir. Hamilton, a building suitable for carrying on its business, the maxi- 
 mum cost of said building to be ?iO,000, and be furnished with all tho 
 latest and most important improvements in use in this manufacture. 
 
 w.s.n.M. — 12 
 
 --^ 
 
rr' 
 
 178 
 
 SIIAUEHOLDEU.S AND DIUECTORS MANUAL. 
 
 In order to push sales, it is proposed to establish ajjeiicip'" in every 
 county of the Province. A Charter to be applied for, and the Company 
 to commence business as soon as one-half of the proposed capital stock 
 is subscribed. 
 
 It is proposed to make calls upon the subscribers for stock as follows : 
 25 per cenc. when the Charter is obtained ; 2.") per cent, about one month 
 thereafter, and the balance as the Directors may deem advisable. 
 
 Application for Shares may be addressed in the following; form, and 
 accompanied by a deposit of 10 per cent., to the Secretary, at the 
 Company's Office, No. 100 King street east, Hamilton : — 
 
 To the Provisional Directors of the Hamilton Stove Compani/, Limited. 
 
 Gentlemen,— 
 
 Please allot me Two Hundred Shares in this Company, on 
 account of which I have deposited the sum of $1,000 to the acc^-unt of 
 t'le Company, at the Bank of Hamilton. 
 
 Signature of Applicant. 
 
 Hamilton, 1st May, 1897. 
 
 rOKM NO. 2. 
 The Hamilton Stove Company, Limited. 
 
 Office, No. 100 King street east, 
 
 Hamilton, 10th May, 18!»7. 
 
 Sib, — The Provisional Directors have this day allotted to you Two 
 Hundred Shares in the above Company, in accordance with your appli- 
 cation. 
 
 TH0.MA8 TaYLOK, 
 
 Secretary. 
 
 To. 
 
 Hamilton. 
 
SSaFTT"^ 
 
 FORMS. 
 
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•180 shareholders' and directors' manual. 
 
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FORMS. 181 
 
 rOEM NO. 5. 
 
 PETITION FOR LETTERS PATENT. 
 
 To His Honock The Liectenant-Govehnor ok the Pkovince ok Ontario, 
 IN Council: 
 
 The petition of William John Thomas, Foundryman, Samuel 
 Andrew Thomson, Machinist ; Thomas Taylor, Gentleman ; and Thomas 
 Bright Taylor, Stove Manufacturer, all of the City of Hamilton, in the 
 County of Wentworth, and Province of Ontario ; Henry Victor Taylor, 
 of the City of New York, in the County of New York, in tlie State of 
 New York, one of the United States of America, Moulder, and George 
 Peter Sharpe, of the City of P^dinburgh, in the County of Edinburgh, in 
 that part of the United Kingdom of Great Britain and Ireland called 
 Scotland, Capitalist, 
 
 Humbly Sheweth : 
 
 1. That your Petitioners are desirous of obtaining by Letters 
 Patent, under the Great Seal, a Charter under the provisions of the Act 
 respecting the Incorporation and Rej^ulation of Joint Stock Companies {a), 
 constituting your Petitioners, and such others as may become Share- 
 holders in the Company thereby created, a body corporate and politic 
 under the name of The Hamilton Stove Company, Limited, or such 
 other name as shall appear to Your Honour to be proper in the 
 premises. 
 
 2. That Your Petitioners have sat'sfied themselves and are assured 
 that the corporate name under which incorporation is sought is not 
 on any public ground objectionable, and that it is not that of any known 
 (Company, incorporated or unincorporated, or of any partnership or indi- 
 vidual, or any name under which any known business is being carried 
 on, or so nearly resembling the same as to deceive {b). 
 
 3. That Your Petitioners have satisfied themselves and are assured 
 that no public or private interest will be prejudicially affected by the 
 incorporation of your Petitioners as aforesaid (c). 
 
 4. That Your Petitioners are of the full age of twenty-one years. 
 
 o. That the object for which incorporation is sought by Your Peti- 
 tioners is to manufacture and sell stoves and furnaces. 
 
 (a) If incorporation is sought under any other Act as well, its title 
 should be interlined here, as for instance, " The Ontario Mining Com- 
 panies' Incorporation Act," or " The Timber Slide Companies' Act," or 
 " The Street Railway Act," or " The Act respecting Companies for Steam 
 and Heating, or for supplying Electricity for Light, Heat or Power, etc." 
 
 (Ii) Add here, when proper, " except the name ' ,' and your 
 
 Petitioners elsewhere sliow that they have received the necessary con- 
 hent in writing under section 10 of the said Act to the use of the name 
 uj. ''ed for." 
 
 If otherwise, then the interests liable to be so affected shall be 
 set out at length by affidavit to be brietiy referred to here. 
 
182 
 
 shareholders' and directors' manual. 
 
 : I 
 
 0. That the undertakint* of the Corrpany will be carried oil at the 
 city of Hamilton aforesaid, which is within the Province of Ontario. 
 
 7. That the head oftice of the Company will be at the said City of 
 Hamilton. 
 
 8. That the amount of the capital stock of the said Company is to 
 be two nundied thousand dollars. 
 
 0. That the said stock is to be divided into four thousand shares of 
 fifty dollcrs each. '. 
 
 10. That the number of the Board of Directors of the Company is 
 to be three. 
 
 11. That the said William John Thomas, Thomas Taylor and 
 Thomas Bri.'^ht Taylor are to be the Provisional Directors of ihe said 
 Company (((). 
 
 12. That by subscribintj therefor in a memorandum of aj^reement 
 and stock book, duly executed in duplicate, with a view to the incorpo- 
 ration of the Company, Your Petitioners have taken the amounts of stock 
 set opposite their respective names as follow : 
 
 Petitionehs. 
 
 Amount of stock subscribed for. 
 
 William John Thomas .... Fifty-nine thousand nine hundred dollars. 
 Samuel Andrew Thomson. . One hundred dollars. 
 
 Thomas Taylor i Sixty thousand dollars. 
 
 Thomas Brij^ht Taylor .. ..iFifty-nine thousand nine hundred dollars. 
 
 Henry Victor Taylor One hundred dollars. 
 
 George Peter Sharpe Twenty thousand dollars. 
 
 * If any payment in cash or otherwise, has, as a matter of fact, actu- 
 ally beei mado by any petitioner on his stock, and it is considered expe- 
 dient to set it out, particulars thereof may be written here. 
 
 Your Petitioners therefor pray that Your Honour may be pleased, 
 by Letters Pateit under the Great Seal, to grant a Charter to your Peti- 
 tioners, constituting your Petitioners and such others as have or may 
 become subscribers in memorandum o'> agreem ^nt and stock-book of the 
 Company thereby created, a body corporate and politic for the due car- 
 rying out of the undertaking aforesaid. 
 
 And Your Petitioners, as in duty bound, will ever pray. 
 
 {d) The Directors, who must be at least three in number, must bo 
 petitioners and shareholders. Hack Director tinitit hold his stock absolutely 
 in his own right. ,. 
 
FORMS. 
 
 I,s3 
 
 fUrnialttren of Pititioner*. 
 W J. Thomas. 
 Thos. Tayi-ou. 
 Thos. B. Tavi.ou. 
 S. A. TiioJisoN. 
 H. V. Tayloh, 
 By his Atioriiey, IlKKHEitr Mason. 
 
 G. P. Shauik, 
 By his Attcrney, Heiuikbt MAfcoN. 
 Dated nt Hamiiton this loth day of May, 18'.»7. 
 Witnesses, in their verifying affidavits, mutt identify each sifj- 
 natiire in the form in which it was made. 
 
 Petitioners will use their ordinary si^'natures, and see that their 
 names, etc., in the preamble are correctly stated in full. 
 
 Siuno 'ares of Wittifsm-s. 
 A. F. LoBH, as to 
 A. F. Lonn, as to 
 A. F. Loiiii, aj to 
 John G. Giuson, as to 
 John G. Gibson, as to 
 
 John G. Giuson, as to 
 
 Province of Ontario, 
 County of Wentworth, 
 To Wit : 
 
 rORMNO. 6. 
 
 AFFIDAVIT VERIFYING PETITION; AND AS TO NAME OF 
 
 COMPANY, 
 
 In the matter of the application of William 
 John Thomas and others for the incorporation 
 by the grant of Letters Patent of The Hamil- 
 ton Stove Company, Limited. 
 I, William .Tohn Thomas, of the City of Hamilton, in the County of 
 Wentworth, Foundryman, make oath and say : — 
 
 1. That I am one of the applicants herein. 
 
 2. That I have a knowledge of the matter, and that the allegations 
 in the within Petition contained are, to the best of my knowledge and 
 belief, true in substance and in fact. 
 
 8. That 1 am informed, and believe that each Petitioner is of the 
 uU age of twenty-one years. 
 
 4. That the proposed corporate name of the Company is not on 
 any public ground objectionable, and that it is not that of any known 
 Company, incorporated or unincorporated, or of any partnership or 
 individual, or any name under which any known business is being carried 
 on, or so nearly resembling the same as to deceive. 
 
 ."). That I have satisfied myself and am assured that no public or 
 private interest will be prejudicially affected by the incorporation of the 
 C/ompany as aforesaid. 
 
 Sworn before me at the City of Hamilton, \ 
 in the County of Wentworth, this seven- [ 
 teenth day of May, A. D. 1897. j 
 
 John Roe, 
 A Justice of the Peace {or a Commissioner for taking 
 
 Afidavits, as the case may be), 
 
 W. J. THOMAS. 
 
184 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 FOKM NO. 7. 
 
 POWER OF ATTORNEY TO SIGN PETITION AND STOCK- 
 BOOK AND MEMORANDUM OF AGREEMENT d). 
 
 Know all men by these presents that I, George Peter Sharpe, of the 
 City of Edinbur;;h, in that part of the United Kinf^dom of Great Britain 
 and Ireland called Scotland, do hereby make, coi stitnte and appoint Her- 
 bert Mason, of the City of Hamilion, in the Province of Ontario, Esquire, 
 my true and lawful Attorney, for me and in my name and stead to sign 
 the petition of William John Thomas and others now seeking incorpora- 
 tion under the name of The Hamilton Stove Company, Limited, under the 
 provisions of The Ontario Companies' Act, and also in my name and as 
 my act and deed to sign the Memorandum of Agreement and Stock-Book 
 of the said Company for four hundred shares of the capital stock thereof 
 at fifty dollars per share, and generally to do all lawful acts requisite and 
 necessary for effecting the premises, hereby agreeing to ratify and 'jon- 
 lirm all that my sala Attorney shall do herein. 
 
 In witness whereof, I have hereunto set my hand and seal at Edin- 
 burgh this second day of May, A.D. 1897. 
 
 Signed and sealed in the \ 
 
 presence of [ G. P. SHARPE. 
 
 George Isglis. ,__ 
 
 -' Seal. [ 
 
 A similar Power of Attorney must be furnished by Mr. H. V. 
 Taylor. 
 
 i«l 
 
 FORM NO. 8. 
 AFFIDAVIT VERIFYING POWER OF ATTORNEY. 
 
 City of Edinbckoh, 
 
 County of Edinburgh, 
 
 Scotland. 
 
 I In the matter of the Power of .\ttorney given 
 by George Peter Sharpe, of the City of I'^din- 
 burgh, Capitalist, to Herbert Mason, of the City 
 
 (of Toronto, in the Province of Ontario, Esquire. 
 
 I, George Inglis, of the City of Edinburgh, Student-at-Law, make 
 oath and say : 
 
 (a) The power of attorney should in every case be given for the 
 specific purpose in view, as shown above, and not in general terms, or 
 for general business, as it will be retained by the Provincial Secretary. 
 
 Each signature must be verified by affidavit, to be made by the 
 witness thereto. Signatures by Attorney must be made under a specific, 
 not general, power, duly witnessed, which must accompany the appli- 
 cation. 
 
 This rule also applies to the Memorandum of Agreement and Stock- 
 Book. 
 
FORMS. 
 
 1«5 
 
 ike 
 
 or 
 
 itic, 
 hli- 
 
 :k- 
 
 1. Thftt 1 was personally present and did see the Power of Attorney 
 hereunto annexed duly signed and sealed by Georjje Peter Sharpe, one 
 of the applicants for incorporation as The Hamilton Stove Company, 
 Limited. 
 
 2. That I Know the said George Peter Sharpe. 
 
 3. That the signature " G. P. Sharpe " is of the proper handwriting; 
 of the said George Peter Sharpe 
 
 4. That the signature " Geo. Inglis," attesting the signature afore- 
 said as the witness thereto, is the true signature of me, this deponent. 
 
 Sworn before me at the City of Edin- 
 burgh, in the County of Edinburgh, 
 in the Kingdom of Scotland, this 
 second day of May, 1892. I 
 
 (L.S.) Peter Rowe, 
 
 Notary Public. 
 
 A similar affidavit should be furnished verifying Mr. Taylor's 
 Power of Attorney. 
 
 GEO. INGLIS. 
 
 POEM NO. 9. 
 
 AFFIDAVIT VERIFYING SIGNATURES TO PETITION. 
 
 PnoviNCE OF OxTABio, / In THE MATTEU of the ap^Mcation, under The 
 
 'Ontario Companies' Act, of William John 
 County of \Ventworth,-,pj^^^^^^ ^,^^ ^^^^^^ ^^^ Incorporation as The 
 
 To Wit. (Hamilton Stove Company, Limited. 
 
 I, Arthur Freeman Lobb, of the City of Hamilton, in the County of 
 Wentworth, Student-at-law, make oath and say : 
 
 1. That I was personally present and did see William John 
 Thomas, Samuel Andrew Thomson, Thomas Taylor and Thomas Bright 
 Taylor, four of the applicants for incorporation by Letters Patent of The 
 Hamilton Stove Company, Limited, sign the petition hereunto annexed, 
 and marked as Exhibit " A " to this, my affidavit. 
 
 2. That I know the said parties. 
 
 3. That the signatures " W. J. Thomas," " S. A. Thomson," '• Thos. 
 Taylor," and "Thos. B. Taylor," are the true signatures of the said 
 parties. 
 
 4. That the signatures " A. F. Lobb,' attesting the signatures here- 
 inbefore mentioned, are the true signatures of me, this deponent. 
 Sworn before me at the d'ty'i 
 
 of Hamilton, in the County ' 
 of Wentworth, this seven- 
 teenth day of May, A.D.18«J7.; 
 John Roe, 
 
 A Commissioner, etc. 
 A similar affidavit by Mr. Gibson should be furnished, verifying the 
 other signatures. 
 
 A. F. LOBB. 
 
1H() 
 
 SIIAHKIIor.DKKS A\I> I>I1{ECT(>US MAN'b'.M.. 
 
 rOKM NO, 10. 
 
 AFFIDAVIT VERIFYING SIGNATUKES TO PETITION WHEN 
 SIGNED UNDER POWER OF ATTORNEY. 
 
 Province of Ontario, 
 County of Wentworth, J 
 To Wit. 
 
 In the matter of the application under 
 the Ontario Companies' Act of William 
 John Thomas and others, for incorpo- 
 ration as The Hamilton Stove Company, 
 Limited. 
 
 I, John Georf^e Gibson, of the City of Hamilton, in the County of 
 Wentworth, Student-at-Law, make oath and cay : 
 
 1. That I was personally present and did see Henry Victor Taylor, 
 one of the applicants for incorporation by Letters Patent of the said 
 Company, by his Attorney, Herbert Mason, duly authorized in that 
 behalf, 8i<;n the petition hereunto anne.xed, and marked as Exhibit "A" 
 to this, my affidavit. 
 
 2. That I was personally present and did see George Peter Sharpe, 
 one of the applicants for incorporation by Letters Patent of the said 
 Company, by his Attorney, Herbert Mason, duly authorized in that 
 behalf, sign the petition hereunto annexed, and marked as Exhibit " A " 
 to this, my affidavit. 
 
 3. That I know the said Herbert Mason. 
 
 4. That the sij^natures "H. V. Taylor" and "G. P. Sharpe" are 
 of the proper handwriting of the said Herbert Mason. 
 
 .5. That the signatures " Jno. G. Gibson," attesting the signatures 
 hereinbefore mentioned, are the true signatures of me, this deponent. 
 
 Hworn before me at the City of \ 
 Hamilton, in the County of! 
 W^entworth, this fifteenth day i 
 of May, AD. 1897. j 
 
 John Roe, 
 
 A Commissioiii'r, etc. 
 
 JNO. G. GIBSON. 
 
FOUMS. 
 
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188 
 
 SHAKEHOLDEUS AND KIHECTORs MANUAL. 
 
 FORM NO. 12. 
 
 1 
 
 AFFIDAVIT VERIFYING SIGNATURES TO MEMORANDUM 
 OF AGREEMENT AND STOCK-BOOK. 
 
 Province of ONXAnio, \ 
 
 County of Wentworth, ^ 
 
 To Wit. 
 
 Ill tlie matter of the application under the 
 Ontario Companies' Act of William John 
 Thomas and others, for incorporation as The 
 Hamilton Stove Company, Limited. 
 
 I, Arthur Freeman Lobb, of the City of Hamilton, in the Cou jty of 
 Wentworth, Student-atLaw, make oath and say : 
 
 1. That I was personally present and did see William John Thomas, 
 Samuel Andrew Thomson, Thomas Taylor, and Thomas Bright Taylor, 
 therein named, 8i>.'n the Memorandum of Aj^reement and Stock-Bciok of 
 the said proposed Company, mirked as exhibit " A " to this, my affi- 
 davit. 
 
 2. Ihat I know the said parties. 
 
 3. ThAt the signatures " W. J. Thomas." •' S. A. Thomson,' " Thos. 
 Taylor,' and " Thos. B. Taylor," are of the proper handwriting of the 
 said parties. 
 
 4. Tiiat the sitjnatiires " .A. F. Lobb," attesting the signatures liere- 
 inbefore mentioned, are the true signatures of me, this deponent. 
 
 Sworn before me at the (]ity of 
 Hamilton, in the County of 
 Wentworth, this seventeenth 
 day of May, A.D. 1897. 
 
 A. F. LOBB. 
 
 John Roe, 
 
 A ('ommissioner, etc. 
 
 A similar affidavit should be made by Mr. Gibson for the purpose 
 of verifying the other signatures. 
 
 '-:{ 
 
 rORM NO. 13. 
 
 BY-LAW FOR INCREASE OP CAPITAL STOCK. 
 
 By-Law NtJMitER 29. 
 
 A By-law to increase the capital stock of The Hamilton Stove Com- 
 pany, Limited. 
 
 Whereas the capital stock of The Hamilton Stove Company, 
 Limited, is two hundred thousand dollars, divided into four thousand 
 shares of fifty dollars each, of which nine-tenths has been taken up, and 
 ten per centum thereon paid in ; 
 
 And whereas, for the due carrying out of the objects of the Com- 
 pany, the said Company considers it requisite to make a by-law increas- 
 ing the capital stock of tlie Company to the sum of two hundred and 
 fifty thousand dollars ; 
 
FORMS. 
 
 189 
 
 Now, therefore, The Hamilton Stove Company, Limited, enacts as 
 (ollowa, that is to say : 
 
 1. Tiiat the capital stock of the said Company be, and the same is 
 hereby increaHed from the Hum of tsvo liimdred thonmind dollars to the 
 sum of two hundred and fifty thouHand d )llar8 ))y the issue of one 
 thousand sliares of new stock at fifty dollars each. 
 
 2. That the new shares be issued and allotted in such manner ■and 
 proportion as the Directors of the Company may deem proper for the 
 benefit of tiie (Company. 
 
 3. That tills By-law be submitted with all due despatch for the 
 sanction of the Hhareholdors of the Company at a General Meeting 
 thereof to be called for considering,' the same. 
 
 Passed this third day of June, A.D. IH'JT. 
 
 W. J. THOMAS, 
 ^ . I'reniiient. 
 
 f 
 
 1 
 
 Seal. 
 
 ) 
 
 THOS. TAYLOR, 
 
 Secretary. 
 
 Hamilton, 3rd June, 1897. 
 
 The orij^inal by-law must be produced to the Provincial Secre- 
 tary. A copy of the bylaw to be retained by the Provincial Secretary 
 should accompany the original, and should have appended to it the 
 words : 
 
 " Certified under the Seal of the said Company to the Honorable 
 the Provincial Secretary." 
 
 W. J. THOMAS. 
 
 — ' > President, 
 
 Seal. ^- THOS. TAYLOR. 
 
 — , Sei-retanj. 
 
 i 
 
 rOKM NO. 14. 
 
 AFFIDAVIT VERIFYING BY-LAW FOR INCRP^ASE OF 
 
 CAPITAL STOCK AND PROVING DUE 
 
 SANCTION OF SAME. 
 
 Province of Ontaimo, 
 County of Wentworth, 
 To Wit. 
 
 I In the matter of the increase of the 
 . capital stock of The Hamilton .Stove Com- 
 j pany. Limited. 
 
 I, Thomas Taylor, of the City of Hamilton, Esquire, make oath 
 and sav : 
 
 1. Tluit I am the Secretary of the said The Hamilton Stove Com- 
 pany, Limited. 
 
 2 That the anne.xed paper writing marked " A " to this, rny affidavit, 
 is By-law Number iiO, passed on the 3rd June, 1897, by the said Com- 
 pary, for the purpose of increasing the capital stock of the said Com- 
 
lf)0 
 
 SHAUKIIOI.DIJKS' A\l> lUKKc ToHs' MAMAI,. 
 
 pany from the Hum of two liiiiulred thoiiaand dolIarH to the sum of two 
 liuixlred iiiid tifty tliouHund ilollHrn, by the iHHiic of oiiu thousand shiircH 
 of new stock of tifty dollars each. 
 
 3. That the said By-law was sanctioned by a vote of not less than 
 two-thirds in value of the Shareholders of the said Company, present in 
 person or by proxy at a ^jeneral meetinj^ of the Company duly called 
 for considerinji the Bylaw, and held on the llth July, lH<.t7. 
 
 4. That a copy of the said By-law has been certified under the 
 seal of the Company to the Provincial Secretary. 
 
 ^ 
 
 THOS. TAYLOR. 
 
 Sworn before me at the City of Ilamilto' 
 in the County of Wentworth, this I'i 
 day of July, 18<.)7. 
 
 John Koe, 
 
 A Commissioner, etc. 
 
 This at'tidavit may be adapted for use in case of the increase or 
 decrease of tiie number of Directors, or the removal of the head office of 
 the Company. 
 
 FORM NO. 15. 
 
 BY-LAWS OF CO.MPANY REGULATING THE CALLING OF A 
 
 GENERAL MEETING. 
 
 "C" 
 
 By-Laws Nos. 2 A3. 
 
 Whereas, the Directors of The Hamilton Stove Company, Limited, 
 deem it expedient that certain by-laws for regulating the affairs of the 
 Company should be made. Now, therefore, be it enacted, and it is 
 hereby enacted ; 
 
 2. That a >»eueral meeting of the Shareholders may be called at any 
 time by the Directors, when they may deem the same necessary or 
 advisable for any purpose, not contrary to law, or the letters patent of 
 the Company ; and it is incumbent on the President to call a special 
 meeting; of the Shareholders whenever required so to do in writing, by 
 one-fourth part in value of the Shareholders of the Company, for the 
 transaction of any business specified in such written re(iui8ition and 
 notice, calling the meeting. 
 
 3. That notice of the time and place for holding the annual or a 
 general meeting of the Company, must be given at least ten days pre- 
 viously thereto in The Hamilton Times, and also by mailing the same as 
 a registered letter, duly addressed to each shareholder, at least ten days 
 previous to such meeting. 
 
FORMS. 
 
 101 
 
 rORM NO. 16. 
 
 AFFIDAVIT VEUIFYING HY LAWS UIXJULATING THli 
 CALLING OF A GENERAL MEETING. 
 
 Province ok Ontauio, | In tlie matter of the Bylawa of Tlie Iliimil- 
 County of Wentwortli, ton Stove Company, Limited, reguiatinn the 
 To Wit. I callinj^ of meetin^jH. 
 
 I, Thomas Taylor, of the City of Hamilton, i.i the County of Went- 
 worth, Secretary of the above-named Company, make oath and say : 
 
 That tlie pnnexed paper marked " C " is a f rue and correct copy of 
 13y-lawu Noh. 2 an'' '.i, regulating the calling of special general meetings 
 of Hie Company. 
 
 Sworn before me at the City of Hamilton, \ 
 in the County of Wentworth, this third ;■ THOS. TAYLOK. 
 
 day of June, 181(7. j 
 
 John Rok, 
 
 A Coinmigsioiier, etc. 
 
 FORM NO. 17. 
 
 NOTICE IN LOCAL NEWSPAPER OF A SPECIAL GENI^RAL 
 
 MEETING. 
 
 " A " 
 
 Notice. 
 
 A Special General Meeting of the Shareholders of The Hamilton 
 Stove Company, Limited, for considering and sanctioning By-law No. 
 29 (passed by the Company Urd of June, 181)7), for the increase of the 
 capital stock of the C. :npany from the sum of two hundred thousand 
 dollars to the sum of two hundred and fifty thousand dollars, by the 
 issue of one thousand shares of new stock at fifty dollars each, will be 
 held at the Company's Office, No. 100 King street east, in the City of 
 Hamilton, on Wednesday, the 11th day of July next, at the hour of 10 
 o'clock in the forenoon. 
 
 By Order. 
 
 THOS. TAYLOR, 
 
 Secretary. 
 
 This form may be used for notice in The Ontario Gazette if ne'^essivry. 
 
 FO^M NO. 18. 
 
 AFFIDAVIT PROVING DUE CALLING OF A GENER.* .. MEET- 
 ING AND VERIFYING NOTICE IN LOCAL NEWSPAPER. 
 PuoviNCE OK Ontario,) j^ ^j^^ ^^^^^^ ^^ ^ ^^^^^^^ ^^^^.^^^ ^^ ^^^ 
 CouLty of Wentworth, :- Hamilton Stove Company, Limited. 
 
 To Wit. 
 
 ) 
 
11)2 
 
 SIIAHEIIOLDKUS AND lUltKCTOHS MANUAL. 
 
 m 
 
 t • 
 
 I, ThomaH Taylor, of tlio City of Iluiniltoii, in the County of Went- 
 worth, EH(juire, nmko oath and Hiiy : 
 
 1. Thrtt I am the Secretary of tlie Huid Tlie Hamilton Utove Com- 
 pany, Limited. 
 
 '2. Tliat a Kor-.eral luoetiii^; of tlio Rluvroiioldors of the saifl Company 
 was held at tlic aaid City of Hamilton, on the Uth July, AD. 18i»7. 
 
 8. That the Hftid meeting was duly called purHuant to the By-laws 
 (d) of the Company, by givinn notice tiieroof on the IhI July, 1H!»7, in 
 Tilt' Hiimiltoii Timc.i, a no\VH|)ai)or published at the said CMty of Hamilton, 
 and by nniilin^ tho sanu> as II ri'^istered letter, duly iiddressod to each 
 Shareholder, at least ten days prior to such meeting. 
 
 4. That the cUppinii; from the said Thf Unmilton Tinifx, attached to 
 tliis, my alVidavit, and now sliown to n\<', marked " A," is a true and 
 correct copy of the said notice jjiven as aforosaiil. 
 
 ."). That said meeting was called for considering^ and sanctioning 
 By-law No. '2'.1 of the said (^iin\piiny, inuroaHin;^ the capital stock of the 
 Company from the sum of two hundred tliousand dollars to the sum of 
 two hundred and fifty thousand dollars by the issue of one thousand 
 shares of new stock of fifty dollars each. 
 Sworn beiore me at the (lity of Hamilton,^ 
 
 in the County of Wentworlh, this Uth - THOS. TAYLOR. 
 
 day of July,"A.l). 18!t7. ) 
 
 John Rok, 
 
 .4 Commissioner, etc. 
 
 FORM NO. 19. 
 
 AB'FIDAVIT PROVING DUE CALLING OF GENERAL MEET 
 ING WHERE NO BY LAW FOR THE PURPOSE HAS 
 BEKN PASSED (//), AND VEIUFYING NOTICE IN LOCAL 
 NEWSPAPER AND ONTARIO GAZETTE. 
 
 Province ok O.ntauio, ) In the matter of the calling of a General 
 County of Wentworth, !- iSIeeting of Tlie Hamilton Stove Company, 
 To Wit. j Limited. 
 
 I, Thomas Taylor, of the City of Hamilton, in the County of Went- 
 worth, Secretary of the above-named Company, make oath and say : 
 
 1. That a notice calling a general meeting of The Ilan.'lton Stove 
 Company, Limited, for the 11th day of July, 18i)7, at the company's 
 Office, in the City of Hamilton, for the purpose of considering and sane 
 tioning By-law No. 29 (made by the Directors 3rd June, 18'.>7) (c), incrers- 
 
 (fi) Provisions of the Statute, or of the Letters Patent, or of a 
 By-law of the Company made for the purpose, as the case may he. 
 
 {I') If the nieetinar was oalled undor spi»cial provisions in tin- Charter, the 
 affidavit must lie drawn to suit the circmiistanoes. 
 
 (i) Or for increasing or decreasing the number of directors, or for, etc., 
 
 f tc, (IS the ca^e may be. 
 
II I 
 
 FORMS. 
 
 im 
 
 iii>4 tlio capital 8',?ck of the Compai.y from tlio nnm of two liiindreil 
 thoiiHaiiil (lollarH to Iho huiii of t%vo linmlred and fifty tlioiiHaiid dollars 
 by the isHUO of one tliouHaiid shares of new stock of fifty dollars oaoli, 
 was inserted in The. Hiimilti>n Timi'n, a newspaper published at the head 
 ofRce and chief place of business of tiioCIompany, on tiie 1st day of July, 
 lHi>7. 
 
 2. That at least ton days' prior notice of the said meoting was 
 tiiven in the said Tlif llnmiltoii Timen. 
 
 8. Tliat the newspaper cuttintj hereto annexed and marked " A, " to 
 this, my aUidavit, is a true copy of the said notice 
 
 4. That at least ton days' notice was also fjiven by publishing the 
 same in The Otitmio Gazette (or, (in the eane mtnj he, by niailinj^ tiie same 
 as a registered letter duly addressed to each Shareholder of the said 
 Company) ('i)- 
 
 :'. That the cli))pin<' from the said Tiie Onfiir'u) Gazette, attached to 
 tliid, my artidavit, and now shown to me, marked " 13," is a true and 
 correct copy of the said notice yiven as aforesaid. 
 
 Sworti before me at the City of Hamilton, | 
 
 in the County of Wentworth, this lltli . THOS. TAYLOR. 
 
 day o'July. A.l). 1H1»7. 
 
 John Rok, 
 
 A Coininisnioner, etc. 
 
 1i:t- 
 
 [.\S 
 
 ;al 
 
 leva I 
 liiiy. 
 
 lent 
 
 Itove 
 
 mo • 
 lecB- 
 
 l)f a 
 
 th 
 
 I'tO. 
 
 rOEM NO. 20. 
 
 PETITION FOR SUPPI.KMENTARY LETTERS PATENT 
 INCREASING CAPITAL STOCK. 
 
 To His Honor the Lieutenant Governor of the Province of Ontario in 
 Couticil : 
 The Petition of the Hamilton Stove Company, Limited, 
 
 Humbly Sheweth : 
 
 1. That The Hamilton Stove Company, Limited, was incorporated 
 under the Ontario Joint Stock Companies' Letters Patent Act by Letters 
 Patent, dated 'ilst March, A.D. is;»7. 
 
 2. That the capital stock of the Company was, by the said Letters 
 Patent, fixed at two hundred thousand dollars, of which nine-tenths has 
 been taken up and ten per centum thereon paid in. 
 
 :$. That the said capital is insufficient for the purposes of the said 
 Company. 
 
 4. That the Company made, on the third day of June, A.D. 1W7, 
 a By-law increasing the capital stock of the Company to the sum of 
 
 {a) Claiine 4 does not apply to compuuies whose capital is $3,000 or less. 
 
 W.S D.M.— 13 
 
id-i 
 
 SllAHEHOLDEU.S AXl) DIUEOTOUS MANLAL. 
 
 two hundred and fifty thonsand dollars, such amount beinji considered 
 by your petitioners rec^uisite for tiie due carrying out of the objects of 
 the Company. 
 
 5. That the said By-law was sanctioned by a vote of not less than 
 two-thirds in value of the Shareholders at a j^eneral meeting,' of the 
 Company duly called for considering the same, held at the City of 
 Hamilton on the 11th day of July, A.D. 1897. 
 
 Your Petitioner therefore prays that Your Honor may be pleased to 
 grant, under the Great Seal, Supplementary Letters Patent confirm- 
 ing the said By-law. 
 And Your Petitioner, as in duty bound, will ever pray. 
 
 Witness : \ 
 
 I' 
 
 W. 
 
 JOHN ROE. 
 
 Seal. 
 
 Dated at Hamilton 
 
 this eleventh day of July, A.D. 1897. 
 
 J. THOMAS, 
 
 Pre»ideiit. 
 
 THOS. TAYLOR. 
 
 Secntiirij. 
 
 rOEM NO. 21. 
 
 AFFIDAVIT VERIFYING SIGNATURES TO PETITION FOR 
 STTPPLEMENTARY LETTERS PATENT. 
 
 Province oi 
 
 lARIO, 
 
 In the matter of the Petition of The Ham- 
 
 f iltou fciove Company, Limited, for Supple- 
 
 County of Wentworth, ^^^t^ry Letters Patent confi-aiing a By-law 
 
 To Wit. J increasing the capital stock of the Company. 
 
 I, John Roe, of the City of Hamilton, in the County of Wentworth, 
 Solicitor, make oath and say : 
 
 1. That I was personally present and did see William John Thomas, 
 as the President, and Thomas Taylor, as the Secretary of the said Com- 
 pany, sign, and seal with the Company's Common Seal, t>lie Petition for 
 Supplementary Letters Patent, marked as Exhibit " A " to tliis, my 
 attidavit. 
 
 2. That 1 know the said parties. 
 
 3. That the signatures " W. J. Thomas " and " Thos. Taylor " are 
 the true signatures of the said parties. . . 
 
 i. That the signature " John Roe,' attesting the signatures herein- 
 before mentioned, is the true signature of me, this deponent. 
 
 Sworn before me at the City of Hamilton, "| 
 
 in the County of Wentworth, this 11th I JOHN ROE. 
 
 day of July, 1897. J 
 
 R. W. Everett, 
 
 A Commissioner, tfc. 
 
FORMS. 
 
 195 
 
 rORM NO. 22. 
 
 AFFIDAVIT RESPECTING BOSA FIDE CHARACTER OF 
 INCREASE OF CAPITAL STOCK. 
 
 PnoviNCE OF Ontario, \ In the matter of the petition of The Hamil- 
 
 ' ton Stove Company, Limited, for Sup pie- 
 
 County of Wentworth,-j^^^^^^.y betters Patent to confirm a By-law 
 
 To Wit : ) ^o'^ *'^^ increase of the capital stock thereof. 
 
 I, William .lohn Thomas, of the City of Hamilton, in the County of 
 Wentworth, EB(iuire, make oath and say : 
 
 1. That I am the President of the Hamilton Stove Company, 
 Limited, and that I have a knowledge of the matters herein deposed to. 
 
 2. That ine-tenlhs of the capital stock of the Company has been 
 taken up, and ten per centum thereon paid in. 
 
 3. That the present capital of the Company is insufficient for the 
 purposes of the Company. 
 
 4. That the proposed increase in the capital stock of the Cjinpany 
 is bona fide, and in the opinion of the Company requisite and necessary 
 for the due carrynif^ out of the objects of the Company. 
 
 .5. That the allefjations in the said petition contained are, to the best 
 of my knowledf^e and belief, true in substance and in fact. 
 
 Sworn before me at the City of Hamil- 
 ton, in the County of Wentworth, . 
 this eleventh day of July, A.D. 1897. J 
 John Rok, 
 
 .4 Commiggioner, et'\ 
 
 ■\ 
 
 W. J. THOMAS. 
 
 FOEM NO. 23. 
 
 BY-LAW INCREASING (OR DECREASING) THE NUMBER OF 
 
 DIRECTORS. 
 By-law Numiieb 30. 
 
 Whereas the number of the Directors of The Hamilton Sto\u 
 Company, Limited, is three (or, ix the case may he), and it is expedient 
 that the number should be increabed ; 
 
 Now, therefore, the said The Hamilton Stove Company, Limited, 
 enacts as follows : 
 
 That the number of Directors of the said Company be and the same 
 is hereby increased (or, decreased) to five. 
 
 Dated at Hamilton, this seventh day of June, A.D. 1897. 
 
 W. J. THOMAS, 
 
 President. 
 
 J 
 
 Seal. 
 
 ) 
 
 J 
 
 THOS. TAYLOR, 
 
 Secretarif. 
 Sanctioned this eleveth day of July, A.I). 1k97. 
 
m 
 
 M 
 
 190 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 The copy of this By-law transmitted to the Provincial Secretary 
 should have appended to it the words : " Certified under the Seal of the 
 said Company to the Honorable the Provincial Secretary." 
 
 W. J. ^JHOMAS. 
 ^— ' — ■ President. 
 
 Seal 
 
 THOS. TAYLOR, 
 
 -,— ' Secretary. 
 
 Affidavit verifying the By-law may be adapted from No. li. 
 
 FORM NO. 24. 
 
 NOTICE PUBLISHING BY-LAW IN THE ONTARIO GAZETTE, 
 CHANGING NUMBER OF DIRECTORS. 
 
 Under the provisions of The Ontario Companies' Act, The Hamilton 
 Stove Company, Limited, hereby fjives public notice that it has 
 sanctioned a By-law for the purpose of increasing the number of 
 Directors of the Company, of which the following is a true copy : 
 
 " Whereas the number of Directors of The Hamilton Stove Com- 
 pany, Limited, is three (or, us the case may be), and it is expedient that 
 the number should be increased ; 
 
 " Now, therefore, the said The Hamilton Stove Company, Limited, 
 enacts as follows : 
 
 " That the number of Directors of the said Company be and the 
 same is hereby increased to five." 
 
 W. J. THOMAS, 
 
 President. 
 
 I 
 
 Seal. 
 
 I 
 
 THOS. TAYLOR, 
 
 Secretary. 
 
 Dated at Hamilton 
 
 this eleventh day of July, \.D. 1897. 
 
 This notice may be adapted for publishing in Ontario Gazette, By-law 
 changing head office. 
 
 FORM NO. 25. 
 
 AFFIDAVIT PROVING PUBLICATION IN ONTARIO GAZETTE 
 OF BY-LAW CHANGING NUMBER OF DIRECTORS. 
 
 Province of Ontario, 
 
 County of Wentworth 
 
 To Wit. 
 
 In the matter of the Bylaw of The 
 Hamilton Stove Company, Limited, chang- 
 ing the number of the Directors of the 
 said Company. 
 
 I, Thomas Taylor, of the City of Hamilton, in the County of Went- 
 worth, Esijuire, make oath and say : 
 
 1. That I am the Secretary of the said The Hamilton Stove Com- 
 pany, Limited. 
 
 I 
 
FORMS. 
 
 197 
 
 2. That the by-law made by the said Company on the seventh day 
 of June, 18{t7, increasinj^ tlie number of Directors thereof from three 
 to five, was published in The Ontario Gazette on the 13th day of July, 
 A.D. 1897. 
 
 3. That the clipping from the said The Ontario Gazette, attached to 
 this, my affidavit, and now shown to rae marked " B," is a true and 
 correct copy of the said notice given as aforesaid. 
 
 Sworn before me at the City of Hamilton, | * 
 
 ni the County of Wentworth, this - THOS. TAYLOR, 
 sixteenth day of July, A.D. 181)7. j 
 
 R. W. Everett, 
 
 A Commii)iioner, etc. 
 
 This affidavit may be adapted for use in case of the removal uf the head 
 office of the Company. 
 
 FORM NO. 26. 
 
 BYLAW CHANGING HEAD OFFICE. 
 
 By-Law Number 30. 
 
 Whereas the Head Office of The Hamilton Stove Company, Limited, 
 
 is in the City of Hamilton, in the County of Wentworth, and Province 
 
 of Ontario ; 
 
 And whereas it has been deemed expedient that the same should be 
 changed to the City of Toronto, in the said Province ; 
 
 Therefore The Hamilton Stove Company, Limited, enacts as 
 follows : 
 
 1. That the Head Office of The Hamilton Stove Company, Limited, 
 be and the same is hereby changed from the City of Hamilton to -the. 
 City of Toronto. 
 
 •2. That this By-law be submitted with all due despatch for the 
 sanction of the Shareholders of the Company at a General Meeting 
 thereof to be called for considering the same. 
 Passed this 3rd day of July, A.D. 18<)7. 
 
 W. J. THOMAS, 
 — — ■ President. 
 
 I Seal. ]- THOS. TAYLOR, 
 
 — , — ■ . Secretary. 
 
 Hamilton, 3rd July, 1897. 
 
 The copy of this By-law transmitted to the Provincial Secretary 
 should have appended to it the words : " Certified under the Seal of the 
 said Company to the Honorable the Provincial Secretary." 
 
 W. J. THOMAS. 
 
 — ' — ^ President. 
 
 I Seal. I THOS. TAYLOR. 
 
 ^. — ■ •- Secretary. 
 
 Affidavit verifying the By law may be adapted from No. H. 
 
IDS 
 
 SHAUEHOLDEUS AND DIUKCTOUS MANUAL. 
 
 FOKM NO. 27. 
 
 PETITION FOIi ORDEIMN-COUNCIL CHANGING NAME OF 
 
 COMPANY. 
 
 To His Honor the Lieutenant-Governor of the Province of Ontario in 
 
 Council. 
 
 The petition of the Hamilton .Stove Company, Limited, 
 
 Humbly Bhewetli : 
 
 1. That The Hamilton Stove Company, Limited, was incorporated 
 under a fjeneral Act («), viz., The Ontario Joint Stock Companies" 
 Letters Patent Act, by Letters l^atent under the Great Seal, bearing 
 date the twenty-first day of March, A.D. 1897. 
 
 2. That Your Petitioner in desirous of chanf!iiif« its corporate name 
 to that of The Toronto Stove Company, Limited. 
 
 3. That Your Petitioner is in a solvent condition, as is shown by the 
 verified statement in General Balance Sheet of the Company, hereto 
 anne.\ed. 
 
 4. That the change desired by Your Petitioner is not for any 
 improper purpose, and is not otherwise objectionable, the object of Your 
 Petitioner beint^ to remove the works of the said Company to the City 
 of Toronto. 
 
 5. That the name desired is not the name of any other known Com- 
 pany, incorporated or unincorporated, or liable to be unfairly confounded 
 therewith. 
 
 Your Petitioner therefore prays that Your Honor will be pleased, 
 by Order-inCouncil, to change the corporate nami. of Your Petitioner 
 from that of " The Hamilton Stove Company, Limited," to that of 
 "The Toronto Stove Company, Limited." 
 
 And Your Petitioner, as in duty bound, will ever pray. 
 
 W. J. THOMAS, 
 ' — ' — • Piexident. 
 
 ■ Seal. ] THOS. TAYLOR, 
 
 — , — Secretary. 
 
 Dated at Hamilton, 
 
 25th July, A.D. 1897. 
 
 POEM NO. 28. ' 
 
 AFFIDAVIT VERIFYING SIGNATURES TO PETITION. 
 
 (In the matter of the application under the 
 Act respecting the changing of the names of 
 Incorporated Companies of The Hamilton 
 Stove Company, Limited, a company about 
 To Wit. to carry on business at the City of Toronto, 
 
 for an Order-in-Council changing its name. 
 
 {«) If Company was incorpoiated under some other Act, insert title here. 
 
FORMS. 
 
 199 
 
 I, Arthur Freeman Lobb, of the City of Hamilton, in the County of 
 VVentworth, Student-at-Law, make oath and say : 
 
 1. That I wa§ personally present, and did see William John Tliomas 
 and Thomas Taylor, President and Secretary, respectively, of the said 
 Company, sign the said Petition marked as Exhibit " A " hereto ; and 
 aftix thereto the Common Seal of the Company, that I know the said 
 parties, and that the sij^natures "W.J. Thomas" and " Thos. Taylor 
 are of the true signatures of the siiid parties. 
 
 Sworn before me at the City of; 
 
 Hamilton, in the County of' 
 
 Weutworth, this 25th day of ' 
 
 July, AD. 1897. j 
 
 J. ROK, 
 
 A Commissioner, etc. 
 
 A. F. LOBD. 
 
 PuoviNCE OF Ontario, 
 
 County of Wentworth, 
 
 To Wit. 
 
 POEM NO. 29. 
 
 AFFIDAVIT VERIFYING PETITION FOIl CHANGE OF 
 
 NAME. 
 
 In the matter of the petition of The Hamil- 
 ton Stove Company, Tjimited, for an Order of 
 -His Honor the Lieutenant-Governor in 
 Council cliant^ing its corporate name to that 
 of " The Toronto Stove Company, Limited." 
 I, William Jo'm Thomas, of the City of Hamiltoi., in the County of 
 Wentworth, President of the Clompany, make oath and say : 
 
 1. That the allegations in the within petition contained are. to the 
 best of my knowledge and belief, true in substance and in fact. 
 
 Sworn before me at the City of Ham- i 
 ilton, in the County of Wentworth, - 
 this 25th day of July, A.D. 1897. j 
 
 John Rok, 
 
 A Commisvioiwr, etc. 
 
 W. J. THOMAS. 
 
 FORM NO. 30. 
 
 EVIDENCE OF THE COMPANY'S SOLVENCY. 
 
 This should consist of a Balance Sheet, or of a Statement specially 
 prepared for the purpose, and bearing a date not more than six months 
 from the date of the petition, setting out the Company's affairs in detail, 
 sufticient to satisfy the Lieutenant-Governor in Council. 
 
 As the Act under which the change of name is to be granted makes 
 proof of the solvency of the applicants a sine qua non, the Provincial 
 
200 
 
 shareholders' and directors' manual. 
 
 Secretary requires that the evidence to be given on that head sliall be 
 clear and convincing,'. Su'-h evidence may conBist of (1) The last 
 Balance Sheet of the Company if of sufficiently recent date, it beiiif^ 
 sworn by one cognizant of the fact that the financial position of the 
 Company has not materially altered since the Balance Sheet was 
 prepared ; or (2) of a General Statement of the Company's affairs, 
 specially made by competent authority, and setting forth the material 
 facts. The Balance Sheet, or the Statement, as the case may be, must 
 be verified by the affidavit of some one conversant with the facts to the 
 correctness of which he swears. 
 
 rORM NO. 31. 
 
 NOTICE OF FIRST GENERAL MEETING. 
 
 The first General Meeting of the Shareholders of The Hamilton 
 Stove Company, Limited, for the purpose of organizing the Company 
 for the commencement of business, will be held at the Company's Office, 
 No. 100 King street east, in the City of Hamilton, on Wednesday, the 
 20fch day of May next, at the hour of 10 o'clock in the forenoon. 
 
 Bv order. 
 
 THOS. TAYLOR, 
 
 Secretary. 
 
 Hamilton, 
 
 30th April, 18!)7. 
 
 P'lr 
 
 I! : 
 
 POEM NO. 32. 
 
 REQUISITION BY SHAREHOLDERS FOR SPECIAL 
 GENERAL MEETING. 
 
 To the Directors of The Hamilton Stove Company, Limited. 
 
 We, the undersigned, members of the above-named Company, hold- 
 ing not less than one-tenth of the subscribed capital of the Company, 
 do hereby, under the provisions of The Ontario Companies' Act, section 
 r)2, require you, within 21 days from the date hereof, to convene a 
 special general meeting of the Company, to be held at the Company's 
 Office in this City, for the purpose of considering, and, if thouglit fit, 
 passing the subjoined resolution (or for such other business as shall be 
 mentioned in this notice). 
 
 Resolution. 
 
 " That," etc. (set it out.) 
 
 Signatures. 
 
 Hamilton, 
 
 15th July, 1897. 
 
FORMS. 
 
 201 
 
 FORM NO. 33. 
 
 BY-LAW UNDER ONTARIO MINING COMPANIES' INCOR- 
 PORATION ACT, FIXING AND DECLARING RATE OF 
 DISCOUNT. 
 
 By-law No. Ifi of The Company, 
 
 Limited (No personal liability), fixing and declaring the rate of dis- 
 count at which shares are to be sold. 
 
 Whereas The Limited 
 
 (No personal liability) deem it advantageous and proper to sell the 
 unissued shares of the Company at a discount, as hereinafter provided. 
 
 Now, therefore. The Limited, 
 
 enacts as follows : 
 
 That the unissued shares of the Company shall be sold a i dis- 
 count on their par value of seventy-five per cent., and the price per 
 share accordingly shall be twenty-live cents instead of one dollar. 
 
 Passed by the said Company this Titli day of October, A.D. Ih'j?. 
 
 Frciident. 
 
 L. S. 
 
 / 
 
 Secretary. 
 
 This By-law must be verified by an affidavit, which may be adapted from 
 Form No. 14, and a copy of the By-liuv naist 1k' transmitted to the Provincial 
 Secretary within 24 hours after it was sanctioned. As a matter of pre- 
 caution, the Shareholder to whom such stock is issued should agree to be 
 subject to the tenns of this By-law. 
 
 FORM NO. 34. 
 
 ANOTHER BY-LAW UNDER ONTARIO MINING COMPANIES- 
 INCORPORATION ACT, FIXING RATE OF DISCOUNT AND 
 LIMITING TRANSFER OF SHARES. 
 
 By-law, No, authorizing the sale of one hundred and tifty 
 
 thousand shares of the capital stock of The 
 
 Limited (No personal liability), at a discount of seventy-five per cent., 
 and limiting the transfer of the same. 
 
 Whereas The Limited 
 
 (No personal liability) deem it advantageous and proper to issue one 
 liundred and fifty thousand shares of the capital stock of the said 
 Company at a discount of seventy-five per cent., and to limit the trans- 
 fer of the same until the Ist day of November, 1898. 
 
 Now, therefore, the said The Limited, 
 
 enacts as follows : 
 
 That one hundred and fifty thousand shares fully paid-up and non- 
 assessable in the capital stock of The 
 
202 
 
 s||.\|{i:ilo|,|»Kl{S ANI> lill!i:i'|(i|{S MANI'AI,. 
 
 be iHSueil at tlie price or aiiin of tweiity-tive ceiitR eacli, and that tlio 
 slmres ho allotted amoiij,' the applicants tlierofor, or such of tliein uh the 
 Huid Directors may, by rewoliition from tinje to time, determine. 
 
 Such HharoB at twenty-five cents each shall be sold upon the express 
 condition tlint the same sliiill ))e non-tranHfcrable until the first day of 
 November IS'.W, without tlie previous consent of the Directors, and that 
 tlu! usual stock certificatoH sliall not be issued tlitrefor until the naid 
 first day of November, IHitrt, in order to proviiie tliat the said shares so 
 sold at twentvlive cents each may not interfere with subscipient issues 
 of stock at hij^lier prices when deemed advisable. 
 
 Passed by the said Company this I'ith day of Novtmber, A.D. 1897. 
 
 Seal. 
 
 President. 
 
 Secretary. 
 
 Toronto, I'-'tli .May, 18!(7. 
 
 Thin Hy-law must he verified liy iin affidavit, whicli may he adapted from 
 J*"urm No. 11, and a copy of tiif By-law niust l)c transmitted to the Provincial 
 .Secretary within 24 hours after it v^as sanctioned. As a matter of precaution, 
 the Sluvreholder to whom such stock ' \ issued siiould ag'ree to be sul)ject to 
 the terms of tiiis liy-law. 
 
 FORM NO. 35. 
 
 POWER OF ATTORNEY TO MAKE TRANSFERS, RECEIVE 
 
 DIVIDENDS, ETC. 
 
 Know all men by these presents that I, 
 do make, constitute and appoint of 
 
 my true and lawful attorney, for me and in my name and on my behalf, 
 to sell, assi^jn and transfer the within shares in the 
 
 capital of The Company, Limited, to me belonging, to 
 
 receive the consideration money, and to give a receipt or receipts for the 
 same, to receive and give receipts for all dividends that are now due, and 
 that shall hereafter become due and payable on the same, for the time 
 being, and generally to do all lawful acts requisite for effecting the 
 premises, hereby ratifyii.g and confirming all that my said attorney 
 shall do therein. 
 
 In witness whereof, I have hereunto set my hand and seal at 
 this day of in the year of Our Lord one 
 
 thousand eight hundred and 
 Signed and sealed in the | — ■ — 
 
 presence of j | Seal. [ 
 
 For affidavit verifying, "use Form No. 8. 
 
Foil. Ms. 
 
 •Mi 
 
 rORM NO. 36. 
 
 A'. .-rHEU l«'OUM OF POWEU OF ATTOllNKY. 
 
 Kuow all men by these prenenta that I, 
 of the of ill the County of 
 
 iiml Province of do htTeby nominate, constitute 
 
 tvnd iip[>oint of the 
 
 of in tiie County of 
 
 in the Province of my true anil hiwfnl iittorney, for 
 
 metind in my name, phice and stead, and for my sole use and benetit, to 
 execute and wi^in a petition to His Honor the Lieutenant Governor in 
 Council for the incorporation by Letters Patent, under the Great Seal of 
 Ontario, of The Company, Limited, and to sign 
 
 and execute all such papers and documents as are reijuisite and necessary 
 for procuring such incorporation, and to do for me and in my name and 
 stead and as my acts, all and every such other thiiif^ which may be 
 necessary and requisite for procurinj^ such incorporation. 
 
 And for all and every of the purposes aforesaid I do hereby nive and 
 yrant to , my said attorney, full and absolute 
 
 power and authority to do and execute all acts, deeds, matters, and 
 things necessary to be done in and about the premises, and also full 
 power and av t'lority for , my said attorney, 
 
 to appoint a suostitute or substitutes, and such substitution at pleasure 
 to revoke ; I hereby ratifying and conlirming, and agreeing to ratify, 
 confirm and allow all and whatsoever my said attorney shall lawfully do, 
 or cause to be done, in the premises by virtue hereof. 
 
 In witness whereof, I have hereunto set my hand and seal at 
 
 , this day of , one 
 
 thousand eight hundred and 
 
 Signed, sealed and delivered 
 in presence of 
 
 For affidavit verifying, use Form No. 8. 
 
 •Seal 
 
 •1 
 
 FORM NO. 37. 
 ANOTHER FORM OF POWER OF ATTORNEY. 
 
 Know all men by these presents that I, 
 of the of in the 
 
 of do hereby appoint of the 
 
 of my true and lawful attorney, for 
 
204 
 
 SHAUEHOLDEllS AN'D I>mECTOHS MANUAL. 
 
 me and in my name and btead and in my belialf, and for my sole and 
 exclnsive iioe and benefit, to Htibacribe for Hhares of tl)e valoe of 
 
 dollars each, in the capital stock of the proponed The 
 Company, Limited, and to vote at meeting's of the 
 Shareholders or Directors of tlie Raid proposed Company in respect to the 
 said stock, and also for me and in my name, and as my act and deed, 
 to execute and do all such assurances, deeds, covenants and thing's as 
 may be requisite or necessary in obtaininjj letters patent incorporating 
 said Company and in mana^jing the affairs of the said proposed Company, 
 when incorporated. And ►:enerally to act in r ^ation to the said propoHed 
 Company as fully and effectually in all respects as I myself could do, if 
 personally present. 
 
 And I do hereby ^rant full power to my said attorney to substitute 
 and appoint one or more attorney or attorneys under him, with the same 
 or more limited powers, and others to appoint. 
 
 I, the said hereby at,'reeing and covenanting for 
 
 myself, my heirs, executors and administrators, to allow, ratify and 
 confirm whatsoever my said attorney, or hia substitute, or substitutes, 
 shall do or cause to be done in the premises, by virtue of these presents, 
 includins^ in such confirmation whatsoever shall be done between the 
 time of my decease or of the revocation of these presents, and tlie time 
 of such decease or revocation becoming known to my said attorney, 
 or such substitute or substitutes. 
 
 As witness my hand and seal this 
 A.D. '8 
 
 Bigned, sealed and delivered 
 in prtsence of 
 
 For altidavit verifying, use Form No. 8. 
 
 day of 
 
 Seal. 
 
 rORM NO. 38. 
 PROXY. 
 
 The Hamilton Stove Company, Limited. 
 
 I, George Peter Sharpe, of the City of Edinburgh, in that part of the 
 United Kingdom of Great Britrin and Ireland called Scotland, being a 
 holder of 400 shares in the stock of The Hamilton Stove Company, 
 Limited, hereby appoint and authorize Herbert Mason, of the City of 
 Hamilton, Esquire, to vote for me and on my behalf at the ordinary (or 
 extraordinary, as the case vunj he) general meetii.gof this Company, to be 
 held on day of , and at any adjournment 
 
/'OHMS. 
 
 205 
 
 thereof (or nt any meeting of the Company that may be held within the 
 proHont year). 
 
 Witness my hand and seal this day of 183 . 
 
 tii)(ued in presence of 
 
 J. JONKS. 
 
 [Seal.] O. P. SHAHPK. 
 
 FORM NO. 39. 
 
 AGREEMENT FOU SALE TO PUOPOSEl) COMPANY OK .STOCK- 
 IN-TRADE, ETC., TO FORM PART OF ASSETS OF COM- 
 PANY. AND AS TO ACCEPTANCE, IN PAYMENT THERE- 
 OF, OF SHARES IN THE COMPANY, WHICH ARE TO 
 BE CONSIDERED AS PAID-UP SHARES. 
 
 day of 
 
 A.D. IH 
 
 This agreement, made this 
 Between 
 
 of the first part, and 
 
 as Trustees, of the second part. 
 
 Whereas are desirous of forming and 
 
 incorporating a Joint Stock Company under the provisions of The 
 Ontario Companies' Act for the purposes of 
 
 And whereas the said 
 
 are Trustees for the said 
 Company for whose incorporation application is about to bs made, and 
 whose proposed corporate name is to be " Tiie 
 Company, Limited." 
 
 And Whereas, the parties of the first part hereto have for some years 
 past been engaged in a business somewhat similar to that which the 
 proposed incorporated Company is to engage in, and are the owners of 
 
 which are suitable to the objects of the salt! 
 Company, and it is proposed that the said parties of the first part 
 hereto shall become Sharehclders in the said Joint Stock Company, and 
 shall transfer to the said Company, as soon as the same is incorporated, 
 the said and shall receive paid-up stock in 
 
 the taid Company as the consideration. 
 
 Now this agreement witnesseth that the parties of the first part have 
 agreed and do agree with the parties of the second part to become 
 Shareholders in the said Company, and to take stock therein to the 
 amount of dollars, that is to say, tlie saii 
 
 is to take shares; the said 
 
 is to take shares ; the said 
 
 is to take shares 
 
 is to take shares ; 
 
 dollars each. 
 
 the said 
 
 bsin* of the value of 
 
I', 'a 
 
 20() 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 And in consideration of the issue of such shares as aforesaid to them, 
 the parties ni the first part, tliey hereby agree witn the parties of the 
 second part to sell, convey, transfer and make over to the said proposed 
 Company and 
 
 that the said conveyance and transfer shall be made free and clear of 
 all incumbrances, and as regards the (land) 
 
 by a good and sufficient deed in fee simple, and as regards the (chattels) 
 by such assurance as may vest the full and absolute 
 title thereto in said Company. 
 
 And the said parties of the first part further agree with the partiea 
 of the second part, that in case upon a valuation and appraisement of 
 said (lands, plant and machinery), they are not found to amount in value 
 to the sum of dollars, then the said parties of the lirst part 
 
 shall and will pay in cash to the said partiea of the second part, or to 
 the Company when incorporated, the difference between such valuation 
 and said sum of dollars, so that the whole consideration 
 
 paid for said shares in (land, plant and machinery), and in cash, stiall 
 amount to dollars. 
 
 And it is agreed that the shares that shall be allotted to the parties 
 of the lirst part, in pursuance of this agreement, shall be fully paid-up 
 shares of the stock of the said Company. 
 
 And the parties of the second part covenant and agree with the 
 parties of the first part to use their best endeavors to procure the issue 
 and allotment of such shares as hereinbefore mentioned to the parties of 
 the first part as soon as possible after the incorporation of said Com- 
 pany, and upon the conveys ^ice and transfer of the said lands, plant and 
 machinery as above mentioned. 
 
 In witness whereof, etc. 
 
 rOEM NO. 40. 
 ANOTHER FORM OF AGREEMENT. 
 
 day of 
 
 Memorandum of agreement, made this 
 
 A.D. 18 
 Between 
 
 of the first part, and 
 of the second part. 
 Witnesseth, that the said party of the first part hereby nndertahes 
 to sell, assign, transfer and make over unto The 
 
 Company, Limited, as soon as Letters Patent have been obtained by 
 the said parties of the second part incorporating the said Company, all 
 the rights granted unto 
 
 by Letters Patent of invention, dated at the City of Ottawa, on the 
 day of A.D. 18 
 
 I 
 
 I 
 
FORMS. 
 
 207 
 
 iiiuler the Great Seal of the Dominion of Canada, and beuriu;; the 
 
 number the same bein^ granted for 
 
 and also any rij^hts for renewal thereof and any improvements thertin. 
 
 The said parties of the second part a^jree to pay unto the said party 
 of the lirst part, in considerauou of the execution by him of these pre- 
 sents, the sum of dolhii's, of which sum the amount of 
 dollars shall be paid forthwith, and the further sum of 
 dollars, as follows : 
 and as to the balance or sum of dollars tlie said parties 
 of the second part undertake to pay the same, by allottinji unto the said 
 party of the first part 
 
 sliares each of paid-up ami unassessable stock in the said Company? 
 which the said party of the first part hereby agrees to accept in full pay- 
 ment and discharj^e of such balance. 
 
 The said parties hereto hereby declare that this afireement is made 
 and entered into in contemplation of the formation of the aforesaid 
 Company, and the ac(]uisition by it of 
 
 and the payment of said acquisition in the 
 manner hereinbefore mentioned and set forth. 
 
 In witness whereof, the said parties hereto have hereunto set their 
 hands and seals at the of 
 
 in the of this day of 
 
 A.D. 18 
 
 Signed, sealed and delivered 
 in the presence of 
 
 ' Seal. '. 
 
 rORM NO. 41. 
 
 ANOTHER FORM OF AGREEMENT. 
 
 Memorandum of agreement, made this day of 
 
 A.D. 18 
 Between 
 of the first part and 
 
 The Company, Limited, a Company projiosed 
 
 to be formed under the provisions of The Ontario Companies' Act, 
 represented herein by 
 
 who are nominated as provisional directors of the said Cnmpany, and 
 act herein as t'-iistees for the said Company, of the second p .rt. 
 
 Whereas the parties of the first part are the joint owners of the 
 patent or the sole right to 
 
 and other purposes. 
 
■^ 
 
 i! 
 
 '.'i. 
 
 208 
 
 SHAUEHOLDERS AN'D DIUECTOUS MANUAL. 
 
 And whereas the parties of the first part are the Shareholders of the 
 said proposed Company, and have paid up per cent, on all 
 
 their shares therein, amountint^ in all to dollars, and they 
 
 hav agreed to sell the said patent or sole rif»ht to the said Company for 
 the said sum of dollars of lawfal money of Canada, payable 
 
 as follows : 
 
 The said sum of dollars in cash, and the balance or sum 
 
 of dollars, to be acknowledged by the said proposed com- 
 
 pany as received by them in cash, and as paid in on the said shares ol 
 the said parties of the first part, thereby making the said shares as paid 
 up in full. 
 
 Now these presents witness that in consideration of the premises 
 and of the said sum of dollars, and for the purpose of carrying 
 
 out the said agreement, the parties of the first part do grant, assign, 
 and transfer to the said parties of the second part, as such trustees and 
 their assigns, the said patent and sole right to 
 
 and the said parties of the second part, representing herein the said pro- 
 posed Company, do hereby acknowledge and admit that the said shares of 
 the said parties of tiie first part are fully paid-up shares and unassessable. 
 
 In witness whereof, the said parties hereto have hereunto set their 
 hands and seals this day of 
 
 A.D. 18 
 
 Signed, sealed and delivered | 
 in presence of ; 
 
 rORM NO. 42. 
 
 ANOTHER AGREEMENT. 
 
 An agreement, made the day of between A. B., of 
 
 of the one part, and C. D., on behalf of the below-mentioned 
 Company, of the other part. 
 
 Whereas, the said C. D. and others are about to procure the forma- 
 tion, under the Ontario Companies' Acts, of a Company limited by 
 shares, by the name of The Company, Limited, with a 
 
 capital of 8100,000, divided into 2,000 shares of |.50 each. 
 
 Now, therefore, it is hereby agreed as follows : 
 
 1. The said A. B. shall sell and the said Company, when formed, 
 shall purchase 
 
 [Here will follow a description of the property or right.] 
 
 2. The consideration for the said sale shall be $.50,000 — payable, as to 
 $25,000, in cash, and, as to the residue, in fully paid-up shares of the 
 CompaTiy. 
 
 3,4,5. [Here trill follow various clauses as to what evidence of title 
 the vendor it to show, and when and where the purchase is to be completed, 
 etc., etc.] 
 
FORMS. 
 
 201) 
 
 (1. If this agreement is not adopted bj' the Company before the 
 day of next, either of the parties hereto may, by notice in 
 
 writing to the other, rescind the same. 
 
 As witness the hands of the said parties hereto the day and year 
 first above written. 
 
 C. !>., mentioned in the above form, is a nominee of the persons who are 
 about to form the Company. He may be one of them or a stranger. Such an 
 agreement is commonly referred to as a " prehminary agreement." 
 
 rORM NO. 43. 
 LIST OF SHAREHOLDERS. 
 
 List, in duplicate, of all persons who, on the Slst December, 18!) 
 •were shareholders in the as required by Ontario 
 
 Companies' Act. 
 
 Names of Shareholders 
 alphabetically arranged. 
 
 Address. 
 
 : Amount 
 Occupation. Amount o ,,,,^^^^^^ 
 I Stock. 
 
 9 
 
 cts. 
 
 » 
 
 cts. 
 
 FOEM NO. 44. 
 
 AFFIDAVIT VERIFYING THE ABOVE LIST, AND THE 
 
 ATTACHED SUMMARY OF THE AFFAIRS 
 
 OF THE COMPANY. 
 
 x In the matter of the Annual Returns of 
 
 the 
 
 We, , and 
 
 of , President and Secretary 
 
 of the above-named Company, respectively 
 make oath and say : 
 
 Province of Ontario, 
 County of 
 
 To Wit. 
 
 1. That the above list of the Shareholders, and the Summary of the 
 Affairs of the said Company hereto attached, are, to the best of our 
 knowledge, information and belief, true and correct in every particular. 
 
 Sworn before me at 
 
 in the of 
 
 this day of 
 
 , a J. P. in and for the County of 
 
 {For Signatures of Deponentt.) 
 
 w.«.n.M. 
 
 -14 
 
210 shareholders' and directors' manual. 
 
 . rORM NO. 45. 
 
 Specimen pa^e— REGISTER OF SHAREHOLDERS (a). 
 
 Date. 
 
 Name. Address. 
 
 Calling. 
 
 Remarks. 
 
 1 
 
 3 
 
 2i • 
 
 H 
 
 2i 
 
 8 
 
 Note. — The figures in each column denote the proper breadth in 
 inches or fractions of an inch of such cohimn. 
 
 (a) If thought desirable, this book may be omitted and the additional 
 columns necessary to give all the particulars required by the Act, inserted 
 in the Index to Share Ledger. 
 
 POEM NO. 46. 
 REGISTER OF DIRECTORS. 
 
 Elected. 
 
 Name. 
 
 Address. 
 
 Calling. 
 
 Retired. 
 
 Remarks. 
 
 1 
 
 iJ 
 
 2i 
 
 2 
 
 2 
 
 8 
 
 i 
 
 2i 
 
 Note. — The figures iutach column denote the proper Ireadth in 
 nches or fractions of an inch of such column. 
 
 I 
 
FORMS. 
 
 211 
 
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214 SHAUEHOLDEUS' AN'D DIRECTORS' MANUAL. 
 
 POEM NO. 50. 
 
 NOTICE OF CALL. 
 
 I beg to give you notice that the Directors of The Company, 
 
 Limited, have made a call of $5 per share, and that the sane will be 
 payable to Mr. , the Treasurer of the Company, at 
 
 the Company's Office street, 
 
 day of 189 . 
 
 T)ie amount payable by you upon the 
 respect of such call is 9 
 
 Your obedient servant, ' 
 
 on the 
 
 shares held by you in 
 
 i;Ki 
 
 Secretary. 
 
 Hamilton 
 
 189 
 
 POEM NO. 51. 
 
 NOTICE BEFORE FORFEITURE. 
 
 The 
 
 Company, Limited, 
 
 No. 
 
 Street, 
 
 day of 
 
 , 18l» 
 , i gave 
 
 Sir, — In my letter of the 
 you notice that at a meeting, etc. 
 
 I am now instructed to inform you that the Directors require you, 
 on or before tlie day of , to pay the said sum of 
 
 9 , together with interest thereon, at the rate of per cent, 
 
 per annum, from the said day of up to the 
 
 day of payment, and that in]the event of non-payment of the said call 
 and interest on or before the said day of at 
 
 the place aforesaid, the shares in respect of which such call was made 
 will be liable to be forfeited. 
 
 I am, etc., 
 
 To 
 
 etc. 
 
 Secretary, 
 
 ■4 
 
 ■I 
 
 FOEM NO. 52. 
 INDEMNITY ON ISSUE OF NEW CERTIFICATE. 
 
 To The Company, Limited, and A., B., and C, the Directors thereof. 
 
 Gentlemen, — I have lost the certificate of title, dated the 
 day of , relating to the shares of each, 
 
 in the above-named Company, of which I am the proprietor, and I 
 
FORMS. 
 
 215 
 
 requeak you to issue to me a fresh certificate of title to such shares, and 
 in consideration thereof I undertaite to indemnify you against all actions, 
 proceedings, claims, and demands which may be brought or made 
 against you, or any of you, in consequence of your having issued such 
 fresh certificate, or in consequence of your permitting at any time here- 
 after a transfer of the above shares, or any of them, without the produc- 
 tion of the original certificate above referred to. 
 
 (Signature) 
 
 And I of concur in the above request, and 
 
 guarantee the performance by the said of the above 
 
 undertaking. 
 
 (Signature) 
 Dated the day of ,189 
 
 The loHs f»li<)uld be proved by nxuu 'it. 
 
 FORM NO. 53. 
 AGREEMENT APPOINTING SECRETARY OR MANAGER. 
 
 This agreement, made the day of , between 
 
 The Company. Limited (hereinafter called the Company), of 
 
 the one part, and A. B., of , of the other part. Whereas the 
 
 Directors of the Company are empowered to appoint a secretary (ot 
 manager) of the Company, either for a fixed term or otherwise, and to 
 fix and determine his remuneration, which may be by way of salary or 
 otherwise. 
 
 Now it is hereby agreed as follows : 
 
 1. The said B. shall be secretary (or manager) of the Company for 
 a term of years/to be computed from the date hereof. 
 
 '2. There shall be paid by the Company to the said B., as such 
 secretary (or manager) as aforesaid, a salary at the rate of $ per 
 
 annum. Such salary shall commence from the date hereof, and shall 
 be payable quarterly on every day of day of 
 
 day of , and day of , the first of such quarterly 
 
 payments to be made on the day of 
 
 3. The said B. shall, unless prevented by ill-health during the said 
 term, devote the whole of his time, attention, and abilities to the business 
 of the Company, and shall obey the orders, from time to time, of the 
 Board of Directors of the Company, and in all respects conform to, and 
 comply with, the directions and regulations given and made by tiiem, 
 and shall well and faithfully serve the Company, and use his utmost 
 endeavors to promote the interests thereof. 
 
 4. The said B. shall, during his tenure of the said office, be entitled 
 to leave of absence for a period in each year not exceeding weeks, 
 

 216 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 ' 
 
 and, nnloss otherwise arranged between the Board of Directors of the 
 Company and the sa.'d B., such leave of absence shall be granted in each 
 year as follows, namely, from the day of to the 
 
 day of , etc., etc. The aforesaid salary of the said B. shall 
 
 continue notwithstanding such leave of absence. 
 
 5. Either of the parties hereto may determine this agreement by 
 giving to the other not less than calendar months' notice in 
 
 writing, and upon the expiration of the period specified in such notice, 
 the said B. shall cease to be secretary (or manager) of the Company. 
 
 In witness, etc. 
 
 rORM NO. 54. 
 AUDITORS' CERTIFICATE. 
 
 To the President, Directors and Shareholders of The Toronto Stovk 
 Co.ypANY, Limited. 
 
 Gentlemen, — We, the undersigned, having examined the securities 
 and vouchers, and audited the books of the Company, certify that we 
 have found them correct, and that the annexed balance sheet is a cor- 
 rect statement of the Company's affairs for the year ending the 3()th of 
 April, 189'7. 
 
 JOSEPH BLAKELEY, * 
 
 W. A. DOUGLAS. B.A.. 
 
 Auditors. 
 Toronto, 13th May, 1897. 
 
 m 
 
 
 FORM NO. 55. 
 EXAMPLES OF AGENDA FOR DIRECTORS' MEETINGS— p. 48. 
 
 To elect Chairman. 
 
 To appoint Secretary. 
 
 To approve design for seal. 
 
 To approve agreement for renting offices. 
 
 To appoint a Committee to buy books and furniture. 
 
 To appoint a Solicitor. 
 
 To appoint Bankers, and give directions as to opening account and 
 signature of cheques thereon. 
 
 To consider and approve prospectus. 
 
 To draw cheques in favor of 
 To read and confirm minutes of last meeting. 
 To produce bank book showing credit of $ 
 To consider applications for shares. 
 
 \i > 
 
 i i. 
 
 i 
 
BY-LAWS. 
 
 As it is impossible to frame a set of by-laws that will be proper and 
 safficient for all kinds of companies organized under the laws of 
 different Provinces, the following are given as examples of by-laws in 
 general, which companies can alter to suit their respective circum- 
 stances and requirements. The first taak of a person about to draw up 
 a set of bylaws should be to examine carefully the charter of the com- 
 pany and the Statutes under which it is organized. After he has done 
 that, he may derive some assistance from an examination of the fol- 
 lowing tablf. Every by-law must have the preamble and enacting 
 clause as given herewith. 
 
 Whereas, the Directors of The Hamilton Stove Company, Limited, 
 deem it expedient that certain By-laws for regulating the affairs of the 
 Company should be made. 
 
 Now thereforejje it enacted, and it is hereby enacted. 
 
 MEETINGS. 
 
 1. That the annual meeting of the Shareholders shall be held at the 
 ofiQce of the Company on the fourth Wednesday in the month of January 
 in each year, to receive the report of the Directors for the pai^t year, lo 
 elect Directors for the ensuing year, and for all other general purposes 
 relating to the management of the Company's a£fairs. 
 
 2. That a general meeting of the Shareholders may be called at any 
 time by the Directors whenever they may deem the same necessary or 
 advisable for any purposes not contrary to law, or the Letters Patent of 
 the Company, and it is incumbent on the President to call a special 
 meeting of the Shareholders whenever required so to do in writing by 
 one-tenth part in value of the Shareholders of the Company, for the 
 transaction of any business specified in such written requisition and 
 notice calling the meeting. 
 
 3. That notice of the time and place for holding the anrual or a 
 general meeting of the Company must be given at least ten days pre- 
 viously thereto in the Hamilton Tivies (a), and also by mailing the same 
 as a registered letter (b) duly addressed to each Shareholder at least ten 
 days previous to such meeting. 
 
 (a) Or in some newspaper published at or near, as may be, to the oflF'ce or 
 chief place of business or the Company, ur by publihhing the same in the 
 Ontario Gazette. 
 
 (b) The publishing of the notice of meeting in the Gazette, or the mailing 
 the same as a registered letter, does not apply to Ontario comuanies having a 
 capital not exceeding three thousand dollars. 
 
218 
 
 SHAHKHOLDEU.S AND DIltECTOIls' MANUAL. 
 
 
 4. That meetin^fl of tlie Directors shall be held as often as the basi- 
 neas of the Company may require, and shall be called by the President. 
 
 5. That at general meetings of the Company, every Shareholder 
 shall b« ennitlod to as many votes as he owns shares in the Company, 
 and may vote by proxy. 
 
 0. That questions. at. meetinf{s shalL be decided by a majority in 
 value of the Shareholders present, either in person or by proxy, and in 
 case the number of votes is equal, the President or Chairman shall have 
 a deciding or castinj? vote. 
 
 DIRECtOBS. 
 
 7. That tiie affairs of the Company shall be managed by a Board of 
 three Directors, of whom two shall form a quorum. 
 
 8. That the President and Vice-President biiall be chosen by the 
 Directors from amongst themHelves at the first board meeting after the 
 annual meeting. 
 
 9. That the President shall, if present, preside at all meetings of the 
 Company. He shall call meetings of the Board of Directors and Share- 
 holders when necessary, and shall advise with and render such absist- 
 ance to the manager as may be in his power. In his absence the Vice- 
 President shall have and exercise all the rights and powers of tho Presi- 
 dent. A Director may at any time summon a meeting of Directors. 
 
 10. That questions arising at any meetmg of Directors shall be 
 decided by a majority of votes. In case of an eijuality of votes, the 
 Chairman, in addition to his original vote, shall have a casting vote. 
 
 11. That the Secretary shall keep a record of the proceedings at ali 
 meetings of the Board and of the Shareholders of the Company, and 
 shall be the custodian of the seal of the Company, and of all books, 
 papers, records, etc., belonging to the Company, which he shall deliver, 
 when authorized so to do by a resolution of the Board, to such person, 
 or persons, as may be named in the resolution. 
 
 12. That any Shareholder not in arrears for payments for calls 
 upon his stock may be elected a Director. 
 
 13. That the Directors shall hold office for one year and until their 
 successors shall be elected. 
 
 14. That in case of the death of a Director, or his being unable to 
 act as such, or his ceasing to be a Shareholder, the vacancy thereby 
 created may be filled for the uitexpired portion of the term by the 
 Board from among the qualified Shareholders of the Company. 
 
 15. That the Company shall have a corporate seal of such design 
 as the Board may determine, which seal shall whenever used be authen- 
 ticated by the signatures of the President and Secretary. 
 
 10. That the Board shall from time to time fix the salary or wages 
 to be paid officers of the Company. 
 
 jf: 
 
HV-LAWS. 
 
 219 
 
 STOCK. 
 
 17. Tliat callH upon aubacribed atock ahall be made from time to 
 time AH the Board may determine— no call ahall exceed twenty-five per 
 cent, of the aubacribed stock, and there shall be an interval of at least 
 thirty days between calls. 
 
 18. That it shall not be compulsory on the board to receive full 
 payment of any ahare or ahtirea until the aamo shall have been de* 
 manded by call. 
 
 11* That the Board ahall have power to summarily forfeit aharea and 
 the money paid thereon, upon which any call ahall have remained un 
 paid for si.\ months after it shall be due and payable, and such forfeited 
 stock ahall thereupon become the property of the Company, and may be 
 disposed of in such manner as the Company in general meetin;^ think fit. 
 
 20. That receipts for payment of calls shall be i^^ued from time 
 to time as such payments are made, but atock certificates shall only be 
 issued when shares are fully paid up, and both receipt and certificate 
 ahall be authenticated by the signatures of the President and Secretary, 
 and sealed with the Company's seal. 
 
 21. That Shareholders may, with the consent of the Board, but not 
 otherwise, transfer their shares, and such transfers shall be recorded in 
 a book provided for the purpose, and signed by him and his transferee 
 and duly witnessed, but no person shall be allowed to hold or own atock 
 in the Company without the consent of the Moard («). 
 
 ACCOUNTS. 
 
 22. That the Directors shall cause true accounts to be kept, — 
 Of the stock-in-trade of the Company. 
 
 Of the sums of money received and expended by the Company, and 
 the matter in respect of which such receipt and expenditure takes 
 place ; and 
 
 Of the credits and liabilities of the Company. 
 
 2.S. That the books shall be kept at the head office of the company, 
 and shall b? open to the inspection of the members during the hours of 
 business (h). 
 
 24. That once at least in every year the Directors shall lay before the 
 Company in general meeting a statement of the income and expendi- 
 ture for the past year. A balance sheet shall be made out in every 
 
 (a) This rule may be desirable under certain circumstances, but as a 
 general thing the owner of fully paid-up shares can transfer them at will. 
 Tlie consent of the Board must be had when transferring shares that are 
 not fully paid-up, and the new holder should be as responsible a person 
 a.s the old. 
 
 (6) Restriction as to the time and manner of insjjecting the book.s may, 
 .subject to the pruvisiuns of the Statutes, be impo.sed by the Company m 
 general meeting, or it may, in certain cases, be well tu strike this by-law out 
 altogether. 
 
220 
 
 SHAREHOLDERS AND DIRECTORS MANUAL 
 
 year, or oftener, if desirable, and laid before the Company in general 
 meeting, and such balance sheet shall contain a summary of the property 
 and liabilities of the Company arranged under the necessary headings. 
 
 BANK ACCOCNT. 
 
 25. That a bank account shall be kept in the name of the Company 
 at a bank to be selected by the Board, and all cheques shall be signed 
 by the Secretary and Treasurer. 
 
 SOLICITOR. 
 
 26. That Charles Brown, of Hamilton, Esq., shall be the Solicitor 
 of the Company, but he may at any time be removed by a resolution of 
 the Company, passed in general meeting. 
 
 AUDITORS. 
 
 27. That one or more Auditors shall be appointed annually by the 
 Shareholders at the annual general meeting, whose duty it shall be to 
 examine all books, vouchers and accounts of the Company and all docu- 
 ments having reference to the business thereof. They shall be supplied 
 with a list of all books kept by the Company and with a copy of 
 the balance sheet and abstract of the affairs thereof and it shall be their 
 duty to examine the same and make a report thereon to the Board as soon 
 after the close or the finarciai ycur as possible, together with such sug- 
 gestions or recommendations as they may think fit. Their remuneration 
 shall be $ ea jli per annum. 
 
 CHANGING BT-LAWS. 
 
 28. That the Board may from time to time repeal, amend and 
 re-enact these by-laws, but such change, unless in the meantime con- 
 firmed at a general meeting duly called for the purpose, shall only have 
 force until the next annual meeting of the Company, and if not con- 
 firmed thereat, shall from that time only cease to have any force. 
 
CHAPTER 19T. 
 
 An Act respecting the Incorporation and Regula- 
 tion of Mining Companies. 
 
 Short title, s. 1. 
 Application of Act, s. 2. 
 Incorporation, s. 3. 
 Powers of Companies, a. 4.. 
 Stock, ss. 5, G. 
 
 Subject to call, etc., s. 5 (2). 
 
 Non -personal liability, s. o (3)-(o). 
 
 Sale at a premium or discount, 
 SB. 6, 7. 
 
 Directors' Liauility for wages, 
 
 etc., 8. 8. 
 Returns, s. 9. 
 Extra- Provincial Companies, ss. 
 
 10,11. 
 Offences akd Penalties, ss. 7, 12. 
 
 Sale of shares at discount, s. 7. 
 
 False returns, s. 12. 
 Companies for constroctino works 
 on mining lands, s. 13. 
 
 HER MAJE8TY, bv and with tht advice and con- 
 sent of the Legislative Assembly of the Province 
 of Ontario, emicts as follows: — , 
 
 1. This Act may be cited as " The Ontario Mining Bhort title. 
 Compiuiies Iiicorporation Act." 
 
 2. All mining companies whether heretofore or here- 
 after incorporated under any general Act in force in 
 Ontario shall be subject to the provisions of this Act. 
 
 3. The Lieutenant-Governor in Council may, by let- 
 ters pitent under the Great Seal, grant a charter under 
 The Ontario Companies Act, to any number of persons, 
 not lesa than five, who petition therefor, constituting 
 such persons, and others who may become shareholders 
 in the company thereby created, a body corporate and 
 politic, for the purpose of earning on within the Pro- 
 vince of Ontario, or any of the counties and districts 
 therein, the business and operations of a mining, mill- 
 
 Applioa- 
 tioii of Act. 
 
 Incorpora- 
 tion by 
 Letters 
 Patent. 
 Uev. Sta'. 
 c. 191. 
 

 li 
 
 11' 
 
 222 
 
 Powers of 
 company. 
 
 SHAllEHOLDER.S AND DIRECTORS MANUAL. 
 
 m^, reduction and development company, or such busi- 
 ness and operations as may be set forth in the letters 
 patent.^ 
 
 4. Every such company shall, if the letters patent 
 pemit, have power for its mining, milling, reduction 
 and development operations only: 
 
 (a) To prospect for, open, explore, develop, work, 
 improve, maintain, and manage gold, silver, copper, coal, 
 iron and other mines, mineral and other deposits and 
 properties and! to dig for, raise, crush, wash, smelt, as- 
 say, analyze, reduce and amalgamate and otherwise 
 treat ores, metals and minerals, whether belonging to 
 the company or not, and to render the same merchant- 
 able, and to sell and otherwise dispose of the same, or 
 any part thereof, or any interest therein; 
 
 (b) To acquire by purchase, lease, concession, license, 
 exchange or other legal title, mines, mining lands, ease- 
 ments, mineral properties, or any interest therein, min- 
 erals and ores and mining claims, options, powers, privi- 
 leges, water and other rights, patent lights, letters pa- 
 tent of invention, processes and mechanical or other con- 
 trivances, and either ab.solutely or conditionally, and 
 either solely or jointly with others, and as principals, 
 agents, contractors or otherAvise, and to lease, mortgage, 
 place under license, hypothecate, sell, dispose of and 
 otherwise deal with the same or any part thereof, or 
 any interest therein; 
 
 (e) To construct, maintain, alter, make, work and 
 operate on the property of the company, or on proi)erty 
 controlled by the company, tramways, telegraph or tele- 
 phone lines, reservoirs, dams, flumes, race and other 
 ways, water-powers, ajjueducts, wells, roads, piers, 
 wharfs, buildings, shops, stamping-mills and other 
 works and machinery, plant, and electrical and other 
 appliances of every description, and to buy, sell, manu- 
 
 ' The Department requires each incipient mining company, on its 
 application, to show, both by its Petition and its Memorandum of 
 Agreement and Stock Book, that, at least, ten per centum of its nominal 
 capital has been subscribed. 
 
MINING COMPANIES. 
 
 223 
 
 factijre aud doal in all kinds of goodH, stoivs, iinj)I('- 
 nients, provisious, chattelH and effects recniired by the 
 compauy or its workmen or servants; 
 
 ((/) To build, acquire, own, charter, navi};ate an.l 
 use steam aud other vessels; 
 
 ((') To take, acquire and hold as the consideration 
 for ores, metals or minerals sold or otherwise disposed 
 of, or for goods supplied, or for work done by contract 
 or otherwise, shares, debentures, bonds or other securi- 
 ties of or in any other company having objects similar 
 to those of a company incorporated under this Act, and 
 to sell or otherwise dispose of the same; 
 
 if) To enter into any arrangement for sharing pro- 
 fits, union of interests, or co-operation with any other 
 person or company, carrying on or about to carry on 
 any business or transaction which may be of benefit to 
 a company incorporated under this Act; 
 
 (r/) To purchase or otherwise acquire and under- 
 take all or any part of the assets, business, property, 
 privileges, contracts, rights, obligations and liabilities 
 of any person or company carrying on any part of the 
 business which a company incorporated under this Act 
 is a,uthorized to carry on, or possiessed of i}roi)erty suit- 
 able for the purposes thereof; 
 
 [h) To subscribe for and take and hold shares or 
 stock in any company incorporated as provided by sec- 
 lion i;i of this Act for the purpose of acquiring, holding, 
 constructing, maintaining, and keeping in repair, roads, 
 bridges, improvements in waterways, or other means of 
 communication, aud drainage works, and other improv;^ 
 ments, upon, through, over or adjacent to, or leading to 
 or from the lands of a company incorporated as men- 
 tioned in «iiis section; Provided, that the consent of the 
 ■shaieliolders shall be first obtained by resolution passed 
 at a special general meeting called for (hat purpose; and 
 
 (/) To do all such acts, matters and things as are 
 incidental or necessary to the due attainment of the 
 above obje<'ts, or any of them. 
 
224 
 
 shareholders' and directors' manual. 
 
 No person- 
 al liability. 
 
 Rev. Stat. 
 c. 191. 
 
 By-law 
 must be 
 verifled. 
 
 Certiflcate 
 of stock, 
 what to 
 coutain. 
 
 STOCK AND shares. 
 
 5. (1) Notwithstanding anything to the contrary in 
 The Ontario Comixmies Act contained, the lettere patent 
 incorporating a mining company under this Act may, if 
 the petition of the applicant so requires, contain a pro- 
 vision that no liability in excess of the amount actually 
 paid, or agreed to be paid, to the company for shares 
 therein shall attach to any holder of such shares, pro- 
 vided, however, that no such shares shall be issued at 
 a discount, or any rate other than had previously been 
 sanctioned by the company, iiuless expressly authorized 
 by a by-law ^ of the company fixing and declaring the 
 rate of discount and any other, if any, terms and con- 
 ditions of issue, and further provided that a copy of such 
 by-law shall, within twenty-four hours after the by-law 
 was sanctioned, be by registered letter transmitted to 
 the Provincial Secretary, and that such copy shall be 
 verified as a true copy by the joint affidavit of the presi- 
 dent and secretary, and if there are no such officers, or 
 they, or either of them, are or is, at the proper time out 
 of this Province, or otherwise unable to make the same, 
 by the affidavit of the president or secretary and one of 
 the directors, or two of the directors, as the case may 
 require; and if the jiresident or secretary does not make 
 or join in the affidavit, the reason thereof shall be stated 
 in the substituted affidavit; and any company which re- 
 fuses or fails to comply with the provision of this sec- 
 tion, relative to the transmission of a copy of the by-law 
 to the Provincial Secretary, shall incur a penalty of 
 |20 for every day during which the default continues. 
 
 (2) Where letters patent incorporating any such 
 company have been granted with the provisions men- 
 tioned in this section, every stock certiticate issued by 
 the company shall bear upon the face thereof, distinctly 
 written or printed in red ink, after the name of the com- 
 pany, the words " Incoriwrated under The Ontario Min- 
 
 1 Forms Nos. 33 and 34, post. Note. — That the By-law muit be 
 verified by the joint affidavit of the President or Secretary or a» othencUe 
 provided. 
 
STOCK AND SHARES. 
 
 225 
 
 ing Companies Incorporation Act,'^ and where such 
 stock certificates are issued in respect of shares subject 
 to call, the words '* Subject to Call '' ; or if in respect of 
 shares not subject to call, the words '' Not Subject to 
 Call." according to the fact. 
 
 (?.) Every mining company, the charter of which 
 contains the said provision, shall have written or printed 
 on its charter, prospectus, stock-certificates, bonds, con- 
 tracts, agreements, notices, advertisements and other 
 official publications, and in all bills of exchange, promis- 
 sory notes, indorsements, cheques, and orders for money 
 (I • goods purporting to be signed by or on behalf of the 
 (•((Uipany, and in all bills of parcels, invoices, and re- 
 ceipts of the company, immediately after or under the 
 name of such company, and shall have engraved upon 
 its seal the words " No Personal Liability '' ; and every 
 such company which refuses, or knowingly neglects to 
 comply with this provision shall incur a penalty of $20 
 for every day during which such name is not so kept 
 written or printed; and every director and manager of 
 the company who knowingly and wilfully aiithorizes or 
 [)ermits such default shall be liable to the like penalty. 
 
 (4) In the event of any call or calls on shares in a 
 (ompany so incorporated remaining unpaid by the 
 fiolder thereof for a period of sixty days after notice 
 and demand of payment, such shares may be declared 
 to be in default, and the secretary of the company may 
 advertise such shares for sale at public auction to the 
 highest bidder for ciish by giving notice of such sale in 
 some newspaper published at the place where the prin- 
 cipal office of the company is situated, or in case no 
 newspaper is published thereat, then in a newspaper 
 published in the nearest place to said office, for a period 
 of one month; and said notice shall contain the num- 
 bers of the stock-certificate or stock-certificates in re- 
 spect of such shares and the number of shares, the 
 amount of the assessment due and unj)aid and the time 
 and place of sale; and in addition to the publication of 
 
 W.8.D.M. — 16 
 
 " No per- 
 ROiial lia- 
 Iiility " to 
 appear on 
 (I K^uuents 
 issued by 
 company. 
 
 Sale of 
 Btock on 
 non-i'fly- 
 uioiit of 
 calls. 
 

 220 SHAREHOLDERS AND DIRECIORS MANUAL. 
 
 tlie noti<(' aforesaid, iiotici' shall be personally served 
 upon sinli shareholder by rej^istered letter mailed to his 
 last known address; and if the holder of snch shares 
 fails to pay the amount due upon such shares with in- 
 terest upon the same and cost of advertisinj^ before tlu" 
 time fixed for such sale, the secretary shall |»roceed t(» 
 . sell the sanu'. or such i)ortion thereof as shall suftice to 
 jiay such ass<'ssment, together with interest and cost of 
 advei'tisin;' ; j)rovided that if the pnce of the shares so 
 sold exceeds the amoiuut due with interest and costs 
 thereon, the excess thereof shall be paid to the default- 
 ing shareholder. 
 
 iiabmty"of ^^^ ^® shareholder in any comiiany so incorporated 
 
 hokioi-p shall be jx'rsonally lial)le for non-payment of any calls 
 made ui)on his shares, n<M* shall such shareholder be i)er 
 sonally liable for any debt contracted by the conii)any 
 or for any sum payable by the company. 
 
 Sale of 
 Kliaros at 
 pteuiiuni 
 or at a 
 discount. 
 Kev. Stai. 
 c. 191. 
 
 Veriflca- 
 
 lion ot b\ ■ 
 Jaw. 
 
 6. (1) Notwithstanding anything to the contrary in 
 * 'The Ontario Corn panics Act contained, any mining com- 
 l)any (whose cJiarter does not contain a i)rovisiou that 
 no liability beyond the amount actually paid, or agreed 
 to be i)aid, ujion shares in such company by the holdei 
 thereof shall attach ti> such holder), may, for the lawful 
 purposes <>f the company and no other, from time to 
 time, by by-law, to be expressly sanctioned by the tom- 
 ]iany and to be made for the ]»urpose, dispose of shares 
 in the comi)any at such ])remium. or at such discount 
 and on such terms and conditions as to the company 
 seems to be advantageous and proper; provided, how- 
 ever, that a co]»y of such by-law shall. Avithiii twenty- 
 four hours after the by-law was sanctioned, be by regis- 
 tered letter transmitted to the I'rovincial Secretary, 
 and that such copy shall be verified ;is a true cojty by 
 the joint aflidavit of the president and secretary, and it 
 there are no such otiicers, or they, or either of them, are 
 or is, at the ju'oper time out of this Province, or other- 
 wise unable to make the same, by the aflfidavit of the 
 president or secretary and one of the directors, oi' two 
 
DJUECTORS LIABILITY. 
 
 of tlu* diiectoi-s, sis thy case lujiy nMiuin-; and if the 
 lii'csidcnt or scnctjirv docs not make or Join in tlu' atTi- 
 davit. tlu' reason tlicrcof sliali be staled in the siibsti 
 t,\ite(i altidavil; and any conipany wiiirli retnses or fails 
 to conijdy with the jtrovisiou of this section relative to 
 the transmission of a copy of the by-law to the Provin 
 cial Secretary, shall in( ni- a penalty of #20 Un- every day 
 daring which default continnes. 
 
 (2) p]very stockcertiticate issued in respect «>f nny 
 share sold <,i disposed of by the <'onipany under tlu' pro- 
 \isions of this s«'ction shall bear ajton the face thereof, 
 distinctly written or i)rinted in red ink, after the name 
 of the company, the words " ()i)eratinj; undei- T/ir On- 
 tario Mining OomjianieH Incorponttioii Ad," and wiiere 
 such stock-certiticates are in respect <tf shares s dd, or 
 disiM)sed of at a discount, the words *' Issued by the 
 <'onipany at a discount of p<M' centum." tin* rate 
 
 of discount to be nu*ntioned as a part of such words. 
 
 T. No share in a mininj.? conii»any shall be issjied, 
 sold, or be in any otlu-r manner disposed of at a rate 
 Kss than par. unless under tiie authority of a by-law 
 passed by virtue of this Act; and any director, otlicei 
 or aj;ent of a compiiny who acts in contravention of 
 this section shall, on coaiviction thereof, be liable to a 
 line of .f2(K) and to the ct)sts of conviction, and in default 
 of ])ayment of such tine and costs may be sentenced to 
 imprisonment for a period not exceedinji three months. 
 
 DIllECnms' LIAHILITY. 
 
 227 
 
 on face o/ 
 stock cer- 
 '.iQcate. 
 
 shares Inf- 
 low par. 
 
 H. Notwithstanding anything contained in this Act. Maiiiiitvoi 
 
 ,1.1. , -. ,, " 1 u 1 • • ..1 1 ilirectoi-f. 
 
 tile directors ol the company shall be jointly and sever 
 ally liable to the labourers, sei ants and apj)renti<es 
 thereof, for all debts not exceedinji one year's waj^es dm* 
 lor services iierformed for the comjtany while they are 
 su( h dirtMtors resjKMtively ; but no directf»r shall be 
 liable to an action theref<n. unless the comiiany has 
 been sued therefoi- within «)ne year after the debt be- 
 came due, nor yet unless sucli director is sued tlierefor 
 
228 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 within one year from the time when he ceased to be sncli 
 director, nor yet before an execution against the com- 
 pany has been retunied unsatislied in whole or in part; 
 and the amount due on sucli execution sliall be the 
 amount recoverable with costs against the directors. 
 
 RETURNS. 
 
 nitn'iug''''' ^^' ^" fiflf^ition to the facts to be stated in the re- 
 conipauies. (urus required of companies incorporated under The 
 Ontario Companies Act, every mining company incor- 
 porated under the said Act, or under tlie provisions of 
 The Ontario Joint StocJ: Compavies Letters Patent Art 
 Kev. Stat ^'' ^^ ^^y Other Act, shall state tho number of shares 
 cc. 191, 190. therein sold, or disposed of by the company under the 
 provisions of this Act, or of any other Act, and the rate 
 at which such shares were sold or disposed of, and shall 
 fortliwitli furnish such further and other information as 
 shall at any time be required by the I'rovincial Secre- 
 tary, or by the Director of Mines, and any company 
 which refuses or fails to comply with the provisions of 
 this section shall, in addition to any other penalty, incur 
 a penalty of |20 for every day during which default 
 continues. 
 
 EXTRA-PROVIXCL\L COMPANIES. 
 
 ; 
 
 
 I !: 
 
 liicense to 
 extra-pro- 
 vi 
 tompauies. 
 
 lO. Xo extra-provincial mining, milling, reduction 
 "nciai or development company having its head office else- 
 where than within this Province, shall, either directly 
 or indirectly, sell or otherwise dispose of within this 
 Province any of its shares, stock, stock-certificates or 
 other securities by whatsoever name known, unless and 
 until it has received from the Lieutenant-Governor in 
 Touncil a license authorizing it to sell and dispose of its 
 shares and other securities, and any person who in con- 
 travention of this section acts for an unlicensed com- 
 l)any shall, on conviction thereof, be liable to a fine of 
 |20 per day for every day while he so acted, and, in case 
 the fine be not paid, shall in the discretion of the Court, 
 be imprisoned for a period not exceeding three months. 
 
 
EXTRA-PROVINCIAL COMPANIES. 
 
 ?2:) 
 
 H. No license Hhall be issued to an extra-provindnl |^^°"j'y«^^ 
 niining, millin};. reduction and development ^^i^Pi*".^ et°c*^^*u°,o;, 
 having its bead otHce elsewhere than within this l*ro- ^/^/u^f.^' 
 vince until the company has satisfied the Director of the |.'^ef|^«^^'^ 
 I?ui"ea,u of Klines that it has been duly incorporated and cou^j*lji„g. 
 that it possesses the real estate, property and assets, 
 and that it is carryinj; on its operations on a scale and 
 in fi manner to command the confidence of the public, 
 {ind for this purpose the Director shall have power to 
 require of the c(uupany such sworn documentary and 
 other evidence as he deems to be rcciuisite in the pre- 
 mises, and upon a report that he is satisfied that the 
 ( (unpany is one which may be licensed under this sec- 
 tion, and upon the recommendatiim of the Provincial 
 Secretary, the Lieutenant-tiovernor in Council may di- 
 rect the issue of a license upon such terms and condi- 
 tions as to him seem pro])er, and he may sumnuirily re- 
 voke and annul such license for any cause that to him 
 appears to be sufficient. * 
 
 The following general conditions are required to be complied with 
 on the part of an extra-provincial company applying for license under 
 the provisions of Sees. 10 and 11 of Chap. l'.)7, R. S. O. 1807 : 
 
 1. The application should be in the form of a petition signed by the 
 executive officers of the company, and under the company's seal. The 
 sij^natures to be duly verified. The petition should set out something of 
 the history of the company, and, apart from other documentary evidence 
 that may be required, should show its powers, its standing, its real 
 estate, properly and assets, and that it is carrying on operations upon a 
 scale and in a manner to command the confidence of the public. The 
 petition should either include or be accompanied by a copy of a resolu- 
 tion authorizing the making of the application. 
 
 2. Where the applicant company has been incorporated in Great 
 Britain, or in British Columbia, it is required, in addition, to file a copy 
 of its memorandum of agreement and articles of association, verified by 
 the Registrar or other proper officer having custody of the originals. 
 
 3. Where the applicant company has been incorporated under any 
 Act it is required to file a copy of the Act, duly verified by the Clerk 
 of the Parliament, or Clerk of the Legislative Assembly, or other 
 proper officer having charge of the Rolls. 
 
 •1. Where the applicant company has been incorporated by Letters 
 Patent it is required to file a copy of its Letters Patent duly verified by 
 the Registrar of the Province or State, as the case may be. 
 
2S0 
 
 SHAUEIiOLDERS' AND DIUECTOlts' MANUAL. 
 
 ! ■''•\ 
 
 . 
 
 I'al«o ro- 
 tui'iiH, etc. 
 
 Incorpora- 
 tion of 
 companies 
 for con- 
 struction 
 of worlfs on 
 niininR 
 lands. 
 
 liev. Stat, 
 c. m. 
 
 5. Where the applicant company haw been incorporated by Declara- 
 tion, it is required to tile a copy of itH Declaration, etc., certified by the 
 officer havinj» custody of the originals. 
 
 6. In addition to any other evidence of financiul ability, the company 
 is required to file a certified copy of its stock book as it stands upon the 
 date of making its application. 
 
 7. Every applicant company iw reciuired to show that at least ten per 
 centnm of its nominal capital has been subscribed. 
 
 Those are conditions of general application. Additional conditions 
 may be required, the nature of which can only be determined by the 
 particular case. 
 
 LiABILlTV Foil FALSE STATEMENTS. 
 
 lU. (1) If ixuy persdii in iinv ri'lurn, leporl, certifi 
 cate, biiliiiuH'-HluM't, oi' othoi' (hMiiiiR'iit icMiuiivd by or 
 for the purposes of this Art, wilfnllv niiikcs ii slatcniciit 
 false ill any iiialerial paiticular, lie shall he liable on 
 eonviclion on indict nieni to inipiisoiiiiient for a term 
 not exieedinjj si.x months, with or without har<l labour, 
 and on siimmarv couvi«-tion to iminisonment not ex 
 teedinj; three months, with or without hard labour, and 
 in either ease to a line of f 100 in lieu of or in ad«lition 
 to siieh imprisonment as aforesaid. 
 
 (2) A person charged with an olTence under this 
 section nuiy, if he thinks tit. tender himself to be ex- 
 amined on his own behalf, and thereupon may give evi 
 dence in the same manner and with the like effect and 
 conse(piences as any other witness. Sec <iIho Cap. 191 , 
 ftec. 97. 
 
 [As to the liability of directors (ivd others for untrue 
 statements in a prospectus, advertisement or notice, see 
 Cap. ?il6] 
 
 COMPANIES FOR CONSTRUCTING WORKS ON MINING LANDS. 
 
 IS- (1) Subject to the provisions of Tlie Ontario 
 Companies Act, the Lieutenant-Ciovernor in Council 
 may, by letters patent under the (Ireat Seal, gi'ant a 
 charter to any number of persons not less than five, who 
 petition therefor, eonstitutinj; the said persons and 
 others who may become shareholders in the company 
 thereby created a body corporate and politic for the pur- 
 
CONSTUUf riNO WORKS ON MININO LANDS, 231 
 
 |i(»HO of acqiiirinjr. lioldin^. const ructiii;;. iiiaiiitiiiiiliij; 
 niwi rTpiiii-injf roiids, hritl^ics, im|trov«'m«'Uls in watcr- 
 wa.vH, and otlwi- inrans of ( onuinuiication and (liaina^c 
 worlvN, and ether imiu-ovenicnts I'pon. tlii'on^'h, or ovei' 
 «)i- iidjaccnt tt>, oi- leading' to or froni, niiiiin;; lands. 
 
 {-) Kvci'v coiiipanv incoi'p(»iat('d under this section i''>wer«of 
 shall have powei-, for caiTvin^ out the objects <»f inciu'- 
 piM-al ion only : 
 
 I//I To const I net, maintain and keep in repair, 
 i"oads, l(i-idj;es, waterways, drainage works 
 and other improvements and means of 
 commnuication, thron;;h. over, oi- adjacent 
 to, or leadin*; to or from, mining' lands; 
 
 (7)1 To ac(i,uii'e by purchase, lease, concession, 
 license, exchan^^e or other lejial title, and 
 h(dd lands an<l othei- jiropei-ties m'cessary 
 for the construction of such woi'ks. and 
 from time to time to sell and <lis|)ose cd' all 
 such lands as may be found to be unneces- 
 sary or unsuitable for the purposes of the 
 c(>mj>any ; 
 
 ((■) To demand and receive from persons and cor- 
 porations for the use of such works, such 
 fees an<l tolls as may be fixed by the com- 
 pany, subject to aj>|»r(»val by the Lieuttii- 
 . ant-(iovernor in Council; 
 
 (f/l To build, ac(iuire, own, charter, navij^ate and 
 use steam and other vesstds; 
 
 (r) To enter into any arrauficments for sharinj; 
 profits. nni(m of interest, or ciroperation 
 with any other person or company, carry- 
 ing on, or about to carry on, any business 
 or transaction which may be of benefit to 
 any company incorporated un<ler this se<r- 
 tion; 
 
 (/) To do all such acts, matters and thinjrs as are 
 incidental or necessary to the due attain- 
 ment of the above objects or any of them. 
 
p" 
 
 •I 
 
 CHAPTER -215. 
 
 REVISED STATUTES OF ONTARIO, 1897. 
 
 An Act respecting the Changing of the Names of 
 Incorporated Companies. 
 
 HER MAJESTY, by aud with the advice aud cousent 
 of the Legislative Assembly of the Proviuoe »>f 
 Ontario, enacts as follows: — 
 
 1. Where an ineoriiorat<.'d company within the legis- 
 lative authority of the Legislature of this Province, whe- 
 ther incorporated under a special or general Act, is de- 
 sirous of changing its name, the Lieutenant-Governor, 
 upon being satisfied that the company is in a solvent 
 condition, that the change desired is not for any im- 
 proper purpose, and is not otherwise objectionable, may. 
 by Order in Council, change the name of the company to 
 some other name set forth in the said Order. 
 
 ueguia- 2. The Lieutenant-Governor in Council uiav make 
 
 tiouB as to ' 
 
 uotke. regulations respectmg the notice (if any) to be given of 
 the application for change of name under this Act. 
 
 incasepro- *$• ^n case the proposed new name is considered ob- 
 naineis jectiouable, the Lieutenant-Governor in Council may, if 
 able. he thinks fit, change the name of the company to some 
 
 Ai){)liea- 
 catiotiB to 
 Lieuteii- 
 ant-Gov- 
 eruor to 
 change 
 natnes of 
 couipaiiies, 
 
 other unobjectionable name without requiring 
 further notice to be given. 
 
 anv 
 
 chaiifie to 4. The change of name shall be conclusively esiab- 
 
 1)6 publish- "^ "^ 
 
 o^Jeue lished by the insertion in 'The Ontario Gazette of a )io- 
 tice thereof by the Provincial Secretary. 
 

 CHANOINQ THE NAMES OF COMTAXIES. 
 
 2Xi 
 
 5. No cond'juf or •'iii:i«L'»'"i«'nt i'litored into by orj'bangenot 
 
 to aiTtct 
 
 with the coinnanv, and no liability incurred bv it j^hall "i^tions or 
 
 ' • ■ * coutrai'tii. 
 
 be iiffi't'ted by tlu' clian^'f of name; and all actions com- 
 UK'Uccd by or agaiuHt the company prior to the change 
 of name may be proceeded with against or by the com- 
 pany under its former name. 
 
 Under the above Act the company should petition the Lieutenant- 
 Governor in Council, setting; forth the facts, and stating: 
 
 . 1. That the company is desirous of chanijing its name from . . . 
 to . . . 
 
 2. That the proposed name is not the name of any other known 
 incorporated or unincorporated company. 
 
 3. That the company is in a solvent condition. 
 
 4. That the change desired is not for any improper purpose. (Adding 
 reason) . 
 
 These facts should be verifled by affidavit. The petition should be 
 signed by the president and secretary, and sealed with the company's 
 common seal. Evidence of the solvency of the company should be fur- 
 nished by a verified balance sheet or other satisfactory statement of the 
 affairs thereof. 
 
 The fee to be paid by a Company, whose capital is over $3,000, for 
 the notice in Th.f Gazette, required by Sec. 4, is ?12 ; if the capital is 
 ?3,000 or less, 85. 
 
 Forms for Changiso the Name of a Company. 
 
 Petition for change of name Form No. '27 
 
 Affidavit verifying same ...... " 2'.» 
 
 Affidavit verifying signatures to petition ... "28 
 
 Evidence of company's solvency "30 
 
 [See as to Insurance Companies, Cap. iJOS, s. 40.] 
 

 ^!! 
 
 CHAPTER iH). 
 
 REVISED STATUTES OF ONTARICJ. 18<)7. 
 
 1 
 
 An Act respecting the Liability of Directors. 
 
 Sbort titk" 
 
 Inloi'iirctH 
 tioii. 
 
 " Uiitnii' 
 state- 
 iiiont. " 
 
 " Secini 
 tiep. " 
 
 "Coin- 
 I'auy," 
 
 Direc- 
 tors." 
 
 
 HER ^FAJESTV, by and with the advico aiul consonj 
 of the Legislative Asscnihly of the I'roviiice of 
 Ontario, enacts as follows: — 
 
 1. This Acf may be cited as " The Directors' LidbUit// 
 
 Ari:- 
 
 '2. In this Act, unless the c(nitext otherwise iv 
 (juii-es: — 
 
 1. "Untrue statement" shall include a concealment 
 (M' intentional nondisclosure of a material fact known 
 In the (lirectcu- or promoter which mijiht reasonably in 
 llueui (' a jtei'son in determining'' whether lo ai»i)ly or not 
 to a]»|»ly for shares, debenture stock, annuities on liv<'S. 
 or other securities of the company for which application 
 is invited; 
 
 2. "Securities" shall include bonds, debentures, in. 
 vestment lauids; also policies, certitlcate. or other in 
 struments of insurance, suretyshi[», or guarantee, or in 
 struments evidencing;' contracts in the nature thereof; 
 
 ''\. " Company " shall include any joint stock or other 
 private corporation which issues or is authori/,ed to 
 issue shares, delxMiture stock, annuriies on li\'es. or othei- 
 securities as heri'inbefore defined; 
 
 4. '' Directors " shall include the officers, by what 
 ev( !• name known, appointed to manajjfe the affairs of the 
 company; 
 
 
LIABILITY OF DIIlECrORS. 
 
 235 
 
 5. '^ I'romoter " slwill nu'an a pntinotcr \vlu> was a'Promo 
 party to tlu* preparation of the pros[)e(tii8 oi* notice, or 
 of llie portion thei'e(>f eontaininj; such iintrne statement, 
 but sliall not include any pei'son by rea<!on of his actinji' 
 in a professional cajtacity for jx-rsons en^'^a^cd in pro- 
 t urinjr the formation of the company: 
 
 (>. •• Expert " shall inciiule any jterson whost i>r(d'es- " Kxpen. 
 sion ^'ives authoiity to a statement nnule by hir.i. 
 
 a. This Act shall apply to all companies whei-e or 
 iiy what authority soever incorjKtratcd. and in respect 
 of Provincial companies shall be construed as one with 
 the several Acts of Ontario incorporating; or jiiovidin;; 
 for the inroriKjrat ion of companies by letters i)atent «»!• 
 otherwise. 
 
 Aliplicii. 
 til 11 of Act. 
 
 4- (li Where a prospectus, advertisement, or any 
 printed or written document answerinji" the purpose of a 
 jirospeclus, adveiMisenient or notice invites [»ers(uis to 
 subscribe or ai»ply f(U' shares, debenture stock, annuities 
 oif lives or other sccuiities. by whatever name known or 
 mentioned, of a comi>any. every person who is a directm 
 of the company at the tinx' of the issiu' (d" the [uospectus. 
 advei'tisement or notice, and every pei'son who. with his 
 authority, is named in the pr(»spectus, adveitisement or 
 notice as a director of the conii»any, or as havin<«- agreed 
 to be«'(tme a director (»f tiie company either immediately 
 oi' after an interval of time, and eveiy prcunoter of the 
 c(unpany, and every person who has authorized the issue 
 of the j»rospectus. advertisement oi- notice, shall be liable 
 lo pay. to all jiersons so subscribing or apjdying (Ui the 
 taith of such |)ros|ie<-t)is, advertisement or notice, com 
 |iensation foi- the loss oi- damage they may have sustain- 
 ed by reason of any untrue statenu'iit in tin: prositectus. 
 advert isenuMit or notice, (u- in any i-eport or menn>randuni 
 appearing on the face thereof, oi- by i-efereiice incorpo 
 rat I'd therein or issued therewith, unless it is proved — 
 
 {<!) With res])ect to every stich untrue statenuMit not 
 purporting to be nnide on the authority id' an 
 expert, or of a public otlicial document or 
 
 Lialiility 
 for state- 
 iiii'iitH ill 
 liroBjicc- 
 tiis. 
 
1 1. 
 
 I ';■! 
 
 236 shareholders' and directors' manual. 
 
 statement, that he had reasonable ground to 
 believe, and up to the time of the allotment 
 or issue of the shares, debenture-stock, an- 
 nuities on lives, or other securities, as the 
 case may be, did believe that the statement 
 was true; and 
 
 (h) With respect to every such untrue statement 
 purporting to be a statement by or contained 
 , in what purports to be a copy of or extract 
 from a report or valuation of an engineer, 
 valuer, accountant, or other expert, that it 
 fairly represented the statement made by such 
 engineer, valuer, accountant, or other exjx'rt. 
 or /as a correct and fair copy of or extract 
 from the report or valuation. Provided al- 
 ways that notwithstanding that such untrue 
 statement fairly represented the statement 
 made by such engineer, valuer, accountant, 
 or other expert, or was a correct and fair copy 
 of or extract from the report or valuation, 
 such director, person named, promoter, or 
 ^ other person, who authorized the issue of the 
 
 prospectus, advertisement or notice as afore- 
 said, shall be liable to pay <'omi)ensation as 
 aforesa.id if it be proved that he had no rea- 
 sonable ground to believe that the person 
 making the statement, report or valuation 
 was competent to make it; and 
 
 ((•) Witli resi)eet to every such untrue statement 
 puri)orting to be a statement made by an 
 official person, or contained in what purports 
 to be a copy of or extract from a public official 
 document, that it was a correct and fair re- 
 presentation of such statement or copy of or 
 extract from such document, 
 
 or unless it is proved that, having consented to become 
 a director of the company, he withdrew his consent be 
 fore the isSiUe of the prospectus, advertisement or n»> 
 
LIABILITY OF DIRECTORS. 
 
 237 
 
 tice, and that the prospectus, advertisement or notice 
 was issued without his authority or consent; or that 
 the prospectus, advertisement or notice was issued with- 
 out his liuowledge or consent, and that on becoming 
 aware of its issue he forthwith gav<^ reasonable public 
 notice that it was so issued without his knowledge or 
 consent; or that after the issue of sudi prospectus, ad- 
 vertisement or notice, and before allotment or issue of 
 the shares, debenture stock, annuities on lives or other 
 securities thereunder, he, on becoming aware of any un- 
 true statement therein, withdrew his consent thereto, 
 and caused reasonable puliic notice of such withdrawal 
 and of the reason therefor, to be given, 
 
 (2) Where any company is desirous of obtaining ^1^^"^'^;^ j^^ 
 further capital by subscriptions for shares, bonds, de- }'j^'«i^ecuis 
 bentures, debenture-stock or other securities, and for [.'^^^'j^j^"^,'" 
 that purpose issues a prospectus, advertisement or no- 
 tice, no director of such company shall be liable in re- 
 spect of any statement therein, unless he authorized the 
 issue of such prospectus, advertisement or notice, or 
 adopted or ratitied the same. 
 
 5. Where any such prospectus, advertisement or no- indemnity 
 tice as aforesaid contains the name of a person as a direc- name of 
 tor of a company, or as having agreed to become a direc- Eeenim *^ 
 lor thereof, and such i)erson has not consented to beconu' msmei. 
 a director, or has withdrawn his consent before the issue 
 of such prospectus or notice, and has not authorized or 
 consented to the issue thereoV, the directors of the com- 
 pany (except any without whose knowledge or consent 
 the prospectus, advertisement or notice was issued), and 
 any other person who authorized the issue of such pro 
 spectus. advertisement or notice shall be liable to in- 
 demnify the person named as a director of the company, 
 or as having agreed to become a director thereof as afore- 
 said, against all damages, costs, charges, and expenses 
 to which he may be made liable by reason of his name 
 having been inserted in the prospectus, advertisement 
 ov notice, or in defending himself against any action or 
 legal proceedings brought against him in respect thereof. 
 
•28H 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 Coiitiibn- 
 tioii from 
 <! > (lircc- 
 toi-H. etc. 
 
 li. Every jici'soii wlio. l).v rciison of his bciii^.^ ;i <]ir<'c- 
 (oi*, or jumicd as a director oi- as liavinji ajireed to lie- 
 «'Oiiie a directoi-, or of his liaviiij; aiitlioriz<'d the issue of 
 the i)rosi)eclus, adv«'rtiseiii«'nt oi- notice, has become liable 
 to make any jiayment un(h'i- the lu-ovisions of this Act. 
 shall be entitled to recover contribution, as in cases of 
 conti'act from any other ]terson who, if sued separately, 
 would have been liable to make the same jjayment. 
 
CHAPTER -m. 
 
 REVISED STATUTES OF ONTARIO, 1897. 
 
 An Act to prevent Fraudulent Statements by Com- 
 panies and others. 
 
 HER M A.J EST Y. bv and with the advice jind coiisfiit 
 of the Legislative Assembly of the rroviiiee of 
 Outai'io, enacts as follows: — 
 
 i. (1) Wliei-e any adveitiseuieiit, h'ttei-head. jjostal- 
 cai'd, account or document is!<ued, published or circulated 
 by any corporation, association or company or any otticer. 
 agent or employee of any such corporation, association 
 or conii>any. purports to state the subscribed capital of 
 the corporation, association or company, then the capital 
 actually and in good faith subscrilx-d and no more shall 
 Im' so stated; and any such cm-itoration, association. «<»ni- 
 |>any. otticer, agent or employee who causes to be in- 
 serted an advertisement in any newspajter. or who jmb- 
 lishes, issues or circulates, or causes to be publislu'd, 
 issued or circulate<l. any advertisement, letter-head, 
 postal-card, account or <locunu'nt which states, as (h«' 
 capital of such comjtany. any larger sum than the amount 
 of such subscribed capital so actually and in good faith 
 subscri1"'d as aforesaid, or which contains any untrue 
 or false statement as to the incorporation, contrttl. sujter- 
 vision, managenu'nt or tiuancial stauHling of such coi- 
 jioriilion, association oi- comiiany, and which statement 
 is intended or calculated or likely to mislead or <leceive 
 any person dealing or having any business or transai tion 
 with the said corporation, association oi- c(uu|iany. «u' 
 with any otticer, agent ov employee of the same, shall. 
 nj)on summary conviction tln'reof, before any Police 
 •Magistrate or .lustice of the Peace having jurisdiction 
 
 I'cualty for 
 falKc state- 
 iiientsas to 
 caiiitnl of 
 comiiatiiet'. 
 
Iff 
 
 i 'i:':; 
 
 240 SHAREHOLDEUS' AND DIUECTOUS' MANUAL. 
 
 where tbe offence was committed, be liable to a penalty 
 not exceeding i|200 and costs and not less than |50 and 
 costs, and in default of payment the offender, being any 
 officer, agent or employee as aforesaid, shall be im- 
 prisoned with or without hard labour for a term not ex- 
 ceeding six months and not less than one month, and on 
 a second or any subsequent conviction he may be im- 
 prisoned with hard labour for a term not exceeding 
 twelve months and not less than three months. 
 
 (2) Any one may be prosecutor or complainant under 
 this Act, and one-half of any line imposed by virtue of 
 this Act shall, when received, belong to Her Majesty for 
 the use of the Province, and the other half shall belong 
 to the prosecutor or complainant. 
 
 I %[ 
 
 < 
 
 ' 
 
CHAPTER m. 
 
 REVISED STATUTES OF ONTARIO, 1897. 
 
 An Act respecting lieturns required from Incorpo- 
 rated Companies. 
 
 H 
 
 ER MAJESTY, by and with the advice and consent 
 ►f the Lcfji 
 Ontario, enacts as foHows: — 
 
 islative Assembly of the Province of 
 
 "Ueturn" 
 — niurtiiiiiK 
 of. 
 
 1. The word '' Retain " where used in tliis Act shall 
 include any list, statement or (ithei- information i-iniuired 
 to be furnished to the Government of Ontario, or 1o any 
 ofticer or department thereof, by any ' icorporated com- 
 pany. 
 
 3. No action broufiht af^ainst any incorporated com- No action 
 
 1 . , . . T , 't ^ ,.. ff>i' default 
 
 piiny which is reijuin-d, or whose directors or onicers in makint' 
 
 return to ' 
 he lii'OU(,'lit 
 after rf- 
 
 0('i))t nf 
 letniii liy 
 proper 
 offioer. 
 
 are required to make a return to the (rovernment of On 
 tario. or to any officer or d<'])artment thereof, or brou}»ht 
 afi'ainst any director or otti<-er of such company, either 
 under the ])rovisions of T/ir Ontario Cornjxinlcs Act, or 
 under any other Act. for not duly makinji" a redirn in 
 accordance with the recjuircMnents of any such Act, or 
 for any default in respect to the mode of dealin»j^ wilh 
 such oflicei' or deiKirtment of a retui'n for a later year: 
 cdinnicnced subsecpient to the receipt by the pr<>per 
 (•nicer or department of the (lovernment of the return, 
 for the non-niakiiif; of which, or with reference to which 
 I lie action is brouj>ht, or snbse(|uent to the receipt by 
 su( li olHcer or de])artnient of a return for a later year: 
 I'lovided the return made is. exce}>( in respect of the time 
 at which the same is made, in substantial comi)Iian(!e 
 with the requirements of the Act under which it is or 
 was made as aforesaid, and is duly veritied in ac^cordance 
 
 W S.D.M.— It) 
 
 Kpv Ktat. 
 
 <■. lyj. 
 
 I'roviso. 
 
242 
 
 SIIAHKIIOLDEUS AND DIKKCTOltS MANl'AI.. 
 
 Tiiinitatioii 
 of amount 
 of peuaUy. 
 
 Kev Btat. 
 c. 101, H, 7!'. 
 
 RoturuH by 
 coiij))anies 
 warehous- 
 ing prude 
 petroleum. 
 
 Itev. Stat. 
 p. 191. 
 
 witli the provisions of siicli Act, unloss the action is 
 broiijjht by the Crown, or by the Attornej-CJeneral of 
 Ontario suin{? on beluilf of tlie Crown. 
 
 3- The entire amount of the penalty or penalties t«» 
 be recovered ajjfainst a company-, or the directors or 
 ofTicers thereof, in resjject of any default or defaults in 
 coniplyinj^ with any of the retinirenients of section 75) of 
 the said Onturio C(nap<rnies Act, or in complying witli 
 the requirements, in respect of the; malving of returns, 
 of any other Act up to the time at wliich the action is 
 brought, shall not in the whole exceed f 1,000; and in 
 case several actions are brought, either against the con»- 
 pany or against its directors or otlicers, the Court or a 
 Judge thereof may give such directions as may appear 
 just, either for consolidating the actions or staying tln' 
 later actions, or any of the actions, upon such terms as 
 may be deemed fitting. 
 
 4. (1) p]very incorporated comj)any carrying on a 
 business of warehousing crude petroleum in this IM-o 
 vince shall, on or before the first day of February of each 
 year, make out a summary in duplicate which shall con- 
 tain the following particulars: — ■ 
 
 in) TIk' total quantity of crude petroleum actually 
 held by the company for the purpose of 
 answering transpoi-tation and warehouse re 
 ceipts, accepted orders, and certificates of 
 crude petroleum. 
 
 (h) The total quantity of crude petroleum in respect 
 of which the company as war<'housemeii or 
 carriers are liable to make delivery to other 
 persons. 
 
 [^.s' to thef-e Refiirufi, see alsio (kip. 191, .s. 7,9 ( .l^).\ 
 
 (2) The said summary shall be in accordance witli 
 sub-sections 5, and 7 of section 70 of 'llic ()iif(tri<) (jovi- 
 panics Act, and subsections S and of the said section 
 shall npply to every such company and to the officers 
 thereof thei-ein named. 
 
DOMINION LEGISLATION. 
 
 Infonnation respecting the incorporation of Joint 
 Stock Companies by letters patent under the 
 provisions of "The Companies Act," lievised 
 Statutes of Canada, 1886, Chapter 119, pre- 
 pared for the use and guidance of intending 
 applicants. 
 
 LETrEHs Patent. 
 
 The Goveruor in Coimcil luav, by IctU'i's patent un- 
 der the Great Seal, grant a charter to any nnnibcr i)l" 
 persons, not less than five, who petition therefor, consti- 
 tuting such ])ei'sons,"and others who Ihereafter become 
 shareliolders in the C'ompany thereliy created, a body 
 corporate and politic, for any of the ])urposes or objects 
 to which the Legislative authority of the Parliament of 
 Ganada extends, except the construction and working of 
 railways or the business of banking and the issue of 
 paper money, or the ])usiness of insurance. 
 
 Pltblic Notice. 
 
 The applicants for such letters patent must give at 
 least one calendar month's previous notice in the ('(imnhi 
 Gdzetfe of their intention to apply for same. All com- 
 munications having reference to the publicalion of the 
 notice should be addressed to the Queen's J'rinter and 
 Controller of Stationery, (Jttawa. 
 
 The notice must contain the following particulars: — 
 
 I. The proposed corporate name of the Company, 
 which must not be that of any other known company, 
 incorporated or unincorporated, or any name liable to be 
 <(»nfounded therewith, or otherwise on i>ublic grounds 
 objectionable. 
 
i 
 
 244 
 
 SHAUEllOLDEUS AND DIUECTORS MANUAL. 
 
 The name of a connpany should, as far as it is iwa- 
 slble, indicate its object. The prefix "The'' and the word 
 " Company " or some equivalent collective appellation, such 
 as "Factory,'' "Association" or "Club," must form part 
 of the corporate name of all companies hicorptorated under 
 this Act. The word "Limited" must likeivise be added to 
 the proposed name. ^ 
 
 JI. The pni'poscs within (he purview of the Act fctr 
 whiih its iiuoipoiiition is Honjilit. 
 
 (a) Intendiny applicants should not overlook the 
 provisions which the Statute makes for the acquiriny of 
 real estate, buildinys, etc.. requisite for the due carrying out 
 of the under'takiny of the comp>any , and for the doiny of all 
 business properly incidental thereto, and should omit from 
 their notice all reference to powers provided for by the Act. 
 
 (b) The intention of the Act is to limit the powers of 
 a company to the due carrying out of but one object and 
 the strictly necessary adjuncts thereto, and the practice of 
 the department is to so restrict them. It is useless, there- 
 fore, for intending applicants to encumber their petition 
 with the recited of a multiplicity of powers which cannot 
 he granted. 
 
 (c) In the charter granted to tclegraplt and telephone 
 companies the following provisos are added to the powers 
 given to these companies, and are incorporated in their 
 charters. These should, therefore, be embodied in the peti- 
 tion for incorporation, though not necessarily inserted in 
 the notice. 
 
 Provided that nothing herein contained shcdl he con- 
 strued to interfere ivith any private rights or to confer on 
 the said company the right of building bridges, piers, or 
 works over any navigable river in Canada, without the 
 consent of the Governor in Council, or of erecting posts or 
 placing tlteir line of telegraph {or telephone) upon the line 
 of any raihvay, without the consent of the company or 
 parties to whom such railway belongs. 
 
DOMINION LEGISLATION. 
 
 246 
 
 Provided also, that any mesmf/e in relation to the 
 administration of justice, the arrest of criitiinals, the 
 discover}/ or prosecution of criuir, oud rjoreriiment iuess- 
 ayes or despatches shall al wo ijs be traiisniittcil in prefer- 
 ence to ani/ other )nessa<je or despatch, if required by any 
 person connected with the administration of justice or 
 any person thereto authorized by any Minister of Canada. 
 
 (d) If it is not specifically stated in the 2^arposes for 
 tvhich incorporation is sought that the operations of the 
 concpany are to be carried on throuyhimf the Dominion of 
 Canada, that fact should be set out in a supplementary 
 paragraph to be added to such purposes. 
 
 III. The place williin the Doniiniou of Canada which 
 Is l(t he its chief jthice of biisiness. 
 
 The above is the liinguaije of the statute ; consequent- 
 ly one place only can be named in the Charter as the 
 chief place of business. 
 
 IV. The ])i'()i>osed anioniit of its ca]dtal stock, whicli 
 ill case of a lean conipanv, shall no( be less than ene 
 handled thonsand (.f ICO.dOII) dollars. 
 
 V. The niiinber of shares into which the capital is 
 intended to be divided, and the ainonnt of each share. 
 
 The statute contemplates the issue of ordinary .<itock 
 only, and, therefore, no provision can be made in the 
 Letters Patent for the issue of any other class of stoch. 
 
 VI. The Christian names in fall, and the address or 
 residence, ami the calling and occupation of each of the 
 applicants, with special mention (d" not h ss than thrtM' — 
 nor more than lifteen. of their nnniber, who are to be 
 the first or j)rovisional directors of the Comiianv. and the 
 majority of whom iiuist be r(>sideiit in Canada. 
 
 Each Director must be a shareholder in the company, 
 and ovm stock al)solutcly in his oivn right. 
 
246 snAUi:ii()hDKus' and DiitKcntus' manial. 
 
 'I'liK Pirrniov. 
 
 I. At iu\y tinic, not inoi-o tluin iin(> luoiith aTtcr tiic 
 liiHl piiliUcalloii of sncli notice in the Cnii<i</(i (iait'ld', the 
 applicjinlH niiiv pt'lilioii the ( Jovcnioi' (Jcncral, tlironj^li 
 (1h* Sccrclary of Stale of Canada, foi- the issiu* of sucli 
 hitters patent. 
 
 (a) The persons who petition mast he the same per- 
 sons ivhose ndines tippear in the notice in the Canada 
 (Jazette and mast be shareholders In the proposed, com- 
 pany. 
 
 (b) One-h(df of the proposed capital stock must he 
 snhscrihed for and ten per cent. In rush paid in thereon 
 hy those ir/iose names ace set out In the notice in the 
 Canada Gazette (( nd in the petition, or hj some of them. 
 Stock suhscrihed for hy persons who have not joined in 
 the notice and petition shall not he recognized. 
 
 (c) The petition mu.*it correspond in every particu- 
 lar with the facts set forth i)i the notice inserted in the 
 Canada Gazette and shoald contain the foUoiviny addi- 
 tional information, that is to say : — 
 
 The amount of stock taken by each of the petition- 
 ers respectively; the amount paid in thereon by each 
 applicant, and how it is held for the Company, and 
 whether it was.i)aid in cash, by services, or by the pur 
 chase or transfer of itrojterty, or how otherwise. This 
 information should be j^iven in the form of the tabulated 
 statement embodied in tlii' specimen petition hereto 
 annexed. The stock book of the Comjiany need not be 
 produced. 
 
 The af?gregate of the stock taken must be at least 
 one-half of the total amount of the stock of the Company. 
 The a^greii;ato paid in on the stock taken must, if the com- 
 l)any be not a loan company, be at least ten per cent, 
 thereof, and must not be less than one hundred thousand 
 dollars. 
 
 Huch agfi^regate must have been paid in to the credit 
 of the Company, or to the credit of trustees (at least two 
 
DOMIMtOM LKOISLATION. 
 
 •247 
 
 ill numbor) thei'cfor, and must be Hlandiiij; at hucIi credit 
 in Konic charlcrrd bank or banks in Canada. A ccrtiti- 
 late must be pioduccd sJKJwin;; tiiat tliis has b«>(ni done, 
 which shouhl be signed by the manaj^er of th«^ bank in 
 whieii the deposit lias been made. The manajjer sliould 
 sijfn in (he presence; of u witness who sliould make a 
 statuloiy (h'claration of execution. 
 
 If (he object of (he Coiiipaiiv is one requiring that it 
 should own real estate, any portion, not more than oue- 
 lu.lf of such afi^reffate, may be taken as paid in, if bona 
 
 such object, duly 
 
 <le 
 
 'd 
 
 ible 
 
 real estate si 
 
 held by trustees (at least two in nund)er) for tlie Com- 
 pany, and beinj;' of the re(iuired value, ovvv and above 
 all encumbrances thereon. 
 
 l"]vidence must be i»roduced showing? the value of the 
 real estate which it is jiroposed 1o transfer to the Com- 
 |.any. 
 
 The jtelilion may ask for the embodying; in the 
 letters pa(ent of any provisicm which inuhr (lie Act 
 niiffht be made by by-law of the company incorporated; 
 and such provision so embodied shall not, unless pro- 
 vision to the contrary be made in the letters patent, be 
 subject to repeal or alteration by by-law. 
 
 The petition must be signed by each of the appli- 
 cants in ])erson, and in pres<'nce of a witness. If. how- 
 ever, this is found impracticable in any case the applicant 
 may sign by an attorney, but the original I'ower of 
 Attorney, or a dul}- authenticated or iiotanal copy there- 
 of, must be produced. Each signature should be verified 
 bv an affidavit or statutory declaration made bv the 
 witness tiieieof. 
 
 PllOOF RKgriRED HV SeCTFOX 6 OF THE ACT. 
 
 («) An afHidavit or statutory declaration establishing 
 the sutticiency of the petition and the truth and suffi- 
 ciency of the facts therein stated, also that the proposed 
 name of the ('omi»any is not that of any other known 
 incorporated or unincorporated Company. 
 
 J 
 
if 
 
 248 
 
 SHAUEHOLDEUS AND DIUECTOllS MAXUAI-. 
 
 il 
 
 III 
 
 (b) An jittidavit or slatutory declaration proving tlie 
 [jiiblit-ation in the Canada Gazette of the notice required 
 bj' Section of tlie Act, setting ouf: the dates of the 
 several insertions and having attached to it a copy of 
 such notice. 
 
 (c) Affidavits or Statutory Declarations verifying the 
 signatures of the petitioners. 
 
 The proofs required with ref(M'ence to the truth and 
 sufficiency of the facts stated in the petition, and with 
 respect to tiie proposed corporate name, may be made by 
 an affidavit or affinnation, or statutorv declaration of any 
 of the petitioners or their Attorney or Agent, who should 
 be a resident of the Dominion of Canada. 
 
 Fee.s. 
 
 No step shall be taken in any department of the 
 Government towards the issue of any letters patent, 
 until after the amount of all fees therefoi- shall have 
 been duly paid. 
 
 The following is the schedule of fet^s i)ayable under 
 section S4 of the Act: — 
 
 1. When the proposed capital is |1,(MJ(),(KI() or up- 
 wards, >f50(». 
 
 2. When the proposed capital stock of the ( 'ompany 
 is |5(MM)0() or up" -uds and less than |l,()()tM)00, |;}()(). 
 
 3. When the proposed cai)ital stock of the Company 
 is )|2(M),()0() or upwards and less than fnoO.OOO, fl-yi). 
 
 4. When the proposed cai)ital stock of the Compjvny 
 is IIOO.OOO or upwards and less than !|LMH),(MI(), |200. 
 
 5. When the proposed capital stock of the Company 
 is more than $40,0()() or less than !|j;i(H),()00, f 150. 
 
 (>. ^Vhen the ])ro])osed capic. 1 stock of the Cmnpany 
 is |4(MMI(» or less than |U),()(M), flOO. 
 
 On application for Supplementary Letters Patent 
 the fee is to be ./iie-half of that charged on the original 
 letters patent, except '* when an increase of capital stock 
 is applied for, in which case the fee therecm shall be 
 based upon the actual increase of the capital stock, and 
 
DOMINION LEGISLATION. 
 
 249 
 
 the fee payable shall be the saim* as is parable upon 
 Letters Patent for the incorporation of a company whose 
 capital stock is of the same amount as such increase.'' 
 
 All fees must be paid in cash or by an accepted 
 cl)eque made payable to the order of the Honourable the 
 Secretary of State, and must be transmitted to him by 
 Kegistered Letter. 
 
 Supplementary Letteus Patent. 
 
 Supplementary letters patent may be }>;ranted to a 
 company for: — 
 
 1. ChanKinj;- corporate name of Company. 
 
 2. Obtaining of further powers. 
 
 3. Increasing the capital stock. 
 
 4. Decreasing the cai)ital stock. 
 
 5. Subdividing the existing shares. 
 
 I'iiny 
 
 lp;'.ay 
 
 pany 
 
 many 
 
 |\tent 
 final 
 <tock 
 111 be 
 and 
 
 LIST OF PAPERS AND FORMS WHICH SHOULD BE FUR- 
 NISHED WHEN MAKING APPLICATION FOR LETTERS 
 PATENT OF INCORPORATION OR SUPPLEMENTARY 
 LETTERS PATENT AND WHICH MAY BE ADAPTED 
 FROM THOSE ALREADY GIVEN UNDER THE HEADING 
 "ONTARIO LEGISLATION." 
 
 A.— LETTERS PATENT OF INCORPORATION. 
 
 1. Notice in Gazette of intention to apply. See piige '2')\. 
 
 'i- Affidavit or declaration verifying insertion of same in Gazette. See 
 
 page 254. 
 H. Petition for incorporation. See page 252. 
 
 4. Affidavit or declaration verifying truth of facts set out in petition. 
 
 See page 254. 
 
 5. Bank manager's certificate with respect to deposit paid in. See page 
 
 256. 
 
 B.— SUPPLEMENTARY LETTERS PATENT. 
 
 1. CllANOK OF CoKPOn.VXK N.\ME. 
 
 1. Petition of company for change of name. 
 
 i. Affidavit or declaration verifying faotw set out therein. 
 
 H. Copy of resolution or by-law of company authorizing change of name, 
 
 and the application for same. 
 4. Certiticato, affidavit, or declaration verifying same. 
 
 2. Ol!TAININ« OF Fu. HIMl PoWERS. 
 
 1 Noiioo in Gazette of intention to apply. 
 
 2. Affidavit or declaration verifying insertion of same in Gazette. 
 ;t. Petition by directors for supplementary letters patent. 
 
I 
 
 I'l :■'■ 
 
 l!ll! 
 
 :■!! 
 
 I 
 
 250 SHAUEHOLDEHS' AND DIUECTOHS' MANUAL. 
 
 Affidavit or declaration verifying sifjnatiires of petitioners. 
 Affidavit or declaration verifyinj,' truth of facta set out in petitioi. 
 Verified copy of notice callinj^ special or general meeting. 
 Copy of by-law or resolution passed by shareholders. 
 Certificate, affidavit or declaration verifying same. 
 
 3. Increasino thk Capital Stock. 
 
 Petition of directors for supplementary letters patent. 
 
 Affidavit or declaration verifying truth of facts set out in petition. 
 
 Affidavit or declaration verifying signaturea to petition. 
 
 Certified copy of by-law under seal of company. 
 
 Verified opy of notice calling special or general meeting. 
 
 Copy of proceedings at special or general meeting with respect to 
 
 passage and sanction of by-law. 
 Affidavit or declaration verifying truth of such minutes. 
 
 4. Decueasino the Capital Stock. 
 
 Petition of directors for sup))lementary letters patent. 
 
 Affidavit or declaration verifying truth of facts set out in petition. 
 
 Affidavit or declaration verifying signatures to petition. 
 
 Certified copy of by-law under seal of company. 
 
 Verified copy of notice calling special or general meeting. 
 
 Copy of proceedings at special or general meeting with respect to 
 
 passage and sanction of by-law. 
 Affidavit or declaration verifying truth of same. 
 
 /). SrBDIVIDINO THE EXISTING ShARES. 
 
 Petition from directors applying for supplementary letters patent. 
 
 Affidavit or declaration verifying truth of facts set out therein. 
 
 Affidavit or declaration verifying signatures of petitioners. 
 
 Certified copy of by-law under seal of company. 
 
 Verified copy of notice, calling special or general meeting. 
 
 Copy of proceedings at special or general meeting wit.^ respect to 
 
 passage and sanction of by-laws. 
 Affidavit or declaration verifying truth of same. 
 
 (5 & 7. Increase or Decrease in Number of Directors. 
 
 Certified copy of by-law under seal of company. 
 Verified copy of notice calling special or general meeting. 
 Verified copy of proceedings at special or general meecing, with 
 /espect to passage of by-law. 
 
 8. CHANC4INO THE ChiEF PlaCE OK BUSINESS IS CaNADA. 
 
 Certified copy of bylaw under seal of company. 
 Verified copy of notice calling special or general meeting. 
 Verified copy of procaedings at special or general meeting relating to 
 passage of by-law. 
 
 These forms should, of course, where necessary, be altered to suit the 
 circumstances of each case. 
 
DOMINION LECilSI.ATION. 
 
 2-1 1 
 
 FORMS. 
 
 NOTICE OF INTENTION TO APPLY FOR LET- 
 TERS PATENT OF INCORPORATION TO BE IN- 
 SERTED IN THE CANADA GAZETTE. 
 
 Notice is liereb}' given tliat witliin one month after 
 the l»st publication of this notice in the Gamubi Gazette, 
 i\\)\\\\K Axon will l)e made to His Excellency the Govemor- 
 (icneral-in-Council for a charter of incorporation l>y 
 letters patent, under the provisions of "The Coiupanies' 
 Act," Revised Statutes of Canada, <hapter 119, incor- 
 jjorating the applicants and such other persons as may 
 become shareholders in the proposed company, a body 
 corporate and jjolitic, under the name and for the pur- 
 poses hereinafter mentioned. 
 
 1. The proposed corporate name of the Company is 
 " The Company " (Limited). 
 
 2. The purposes within the purview of the Act, for 
 which incorporation is sought, are 
 
 3. The chief place of business of the said Company 
 is to be the of in the Province of 
 
 4. The intended amount of the capital stock is 
 
 dollars. 
 
 5. The number of shares 's to be and the 
 amount of each share is to be of the value of 
 
 dollars. 
 
 (5. The names in full, and the address and calling of 
 each of the applicants are as follows: 
 of whom the said 
 
 are to be the first or provisional directors of the said 
 comj)any. 
 
 Dated at this day of A.D. 18 
 
 Solicitors for the applicants. 
 
252 
 
 SHAllEHOLDERiS ANli DIKECTORS MANUAL. 
 
 ii 
 
 FORM OF PETITION i<OR INCORPORATION. 
 To His Excellency 
 
 THE GoVERNOU-GeNEUAL IN COUNCIL. 
 
 The petition of 
 
 (Here insert names in full, address, and calliiKj, or 
 occupation of each of the applicants). 
 
 1. That your petitioners are desirous of obtaininf; a 
 charter of incorporation by letters i)atent under tlie pro- 
 visions of "The Coiiipani(\s Act" (Revised Statutes of 
 Canada, cliai)ter 11 J)), incorporatinj;' your ]K>titioners and 
 aucli others as may become shareliolders in the Com- 
 pany, thereby created, a body corporate and i)olitic. un- 
 der the name of " The Company " 
 (Limited), wliich is not tlie name of any ojlier known 
 Company incorporated or unincorjiorated, or liable to be 
 confoumh'd thei-ewith, or otherwise on public j>rounds 
 objectionable. 
 
 2. That your petitioners have jjiven one nu)nth"s ])re- 
 vioua notice of their intention to apply for the said 
 letters patent, by inscrtinjj; the same in the issues of the 
 Canada Gazette of the following dates, IS , viz: — 
 
 3. That the purposes or objects of the said Company 
 within the purview of the Act for which incorporation is 
 sought are: — 
 
 4. That the operations of the said Company are to l)e 
 carried on at , and elsewhere 
 throughout the Dominion of Canada. 
 
 5. That the chief place of business of the said Com- 
 pany is to be at the of in the 
 I'rovince of in the Dominion of Canada 
 aforesaid. 
 
 ({. That the amount of the capital stock of the said 
 Company is to be dollars. 
 
 7. That the said stock is to be divided into shares, of 
 the value of dollars each. 
 
 
DOMINION LEGISLATION. 
 
 25;j 
 
 8. That the said arc to bo the tirst 
 or provisional directors of the said Company. 
 
 9. That your i)etitioners have taken tlie amount of 
 stoclv, and paid in thf'i'con the several amounts thereon, 
 set opposite to their respective names as follows: — 
 
 r 
 
 Petitioners' names in full. 
 
 No, of 
 rtliares 
 takeu. 
 
 Amount 
 of stock 
 subscrib- 
 ed for 
 
 Amount 
 
 paid in 
 
 oil stock 
 
 sub- 
 scribed. 
 
 How paid. 
 
 
 
 
 
 
 Total 
 
 
 
 
 
 10. The agjj-rcgate of stock so taken amounts 
 to dollars, being one-half of tlie total 
 
 amount of the stock of the Comiiany, and the aggregate 
 paid in on the stock so taken amounts lo dollars, 
 
 being ten per cent, thereof, such aggregate has been paid 
 in to the credit of (Coinpun;), or Trustees, in the latter 
 cane naming the j)erson^) and is now standing at such 
 credit in the Bank in the of 
 
 as appears by the certificate of 
 Manager of the said bank at aforesaid, 
 
 which is hereto annexed. 
 
 There has been invested in real estate, suitable to 
 the objects of the Company, the sum of dollars. 
 
 The said real estate consists of and is of the 
 
 value of at least dollars over and above all 
 
 incumbrances thereon, being sutticient with the sum so 
 jiaid in as aforesaid, to make per cent, of tlie 
 
 iiggrcgate of the stock so taken, and is duly held 
 by and as trustees for 
 
 the said Company ((/). 
 
 Vour petitioners therefore pra^. 
 
 That your Excellency will be jtleascd to grant a 
 charter of incorporation by Letters I'atcnt under the 
 [a) This clause is only to be hiserted when necessary. 
 
2oi SHAKEHOLDEUS' AND DIRECTORS' MANUAI.. 
 
 Great Seal to .vour petitioners and sndi others as may 
 become shareholders in the ('onii)any thereby created, 
 a body corporate and politic, for the jturposes and 
 objects aforesaid, under the name of " The Com- 
 
 pany " (Limited). 
 
 And your petitioners as in duty bound will ever pray. 
 
 Dated at the of in tlie of 
 
 this day of A.I>. IS 
 
 Signed and ' 
 
 executed in the 
 
 presence of 
 
 FORM OF DECLARATION TO BE USED IN FUR- 
 NISHING PROOF REQUIRED IN SUPPORT OF 
 PETITION FOR INCORPORATION.* 
 
 Canada, ' 
 Province of 
 
 In the matter of the application of 
 and others for letters patent of incorporation 
 
 County of 
 To WIT : 
 
 I, 
 
 as 
 
 The 
 
 (Limited). 
 
 Company 
 
 of 
 
 and Pi'oviiice of 
 
 of the 
 in the County of 
 
 , do solemnly declare : — 
 
 1. That I was personally present and did see 
 
 sign their respective names to (he jx'tition 
 (hereunto annexed) praying for letters ijatent of incor- 
 poration as " The Company '' 
 (Limited). 
 
 * Where it is impossihle for one person to suljscrihe 
 as to the facts set out in the several paragraphs of thi-'< 
 declaration, it v)ill, of co. ^se, he vecessary to omit that 
 portion and have it estahliished in a separate declaration 
 bij some one possessim/ the requi,site knovrledrfe. 
 
IiOMIXION LEGISLATION. 
 
 2. That I know the said 
 
 255 
 
 .'{. That the sijiiiatnics of aiv of 
 
 the in'opcr handwiiliii}; of the said parties re8i)ettively. 
 
 4. Tliat the several alh-jrations and statements made 
 and contained in tlie pet i( ion foi* incorpoiation of 
 '' Tlie Company " (Limited) 
 iiereunto annexed are, to tlie best of my i<no\vledji'e and 
 belief, true and correct. 
 
 5. The proposed corporate name " The 
 
 Company " (Limited), is not, as I verily believe, the name 
 of any other known comjjany, incorporated or unincor- 
 porated, or liable to be confounded therewith, or other- 
 wise on public grounds objectionable. 
 
 6. That I have examined copies of the ('<in(«la 
 Gazette published on the and in each 
 of said issues of that publication is inserted the notice 
 of application in this matter similar to that hereto 
 annexed marked 
 
 7. That I was personally present, and did see the 
 annexed certificate of dei)osit duly sifjned by who 
 is manager (aycitt or cashier) of the IJank of at 
 the of aforesaid. 
 
 8. That I know the said 
 
 9. That I am the subscribing witness to the said 
 document. 
 
 And I make this solemn dt'olarfitioii conscientiously 
 believing it to be true, and knowing that it is of the sanu' 
 force and effect as if made under oath and by virtue of 
 " The Canada Evidence Act, 1893." 
 
 Declared before me at the \ 
 of in the 
 
 of this [ 
 
 day of A.]). 189 .) 
 
 n 
 
; Hi', 'i^ 
 
 256 
 
 SHAKKHOLDEKS AND l)IUECT(»KS MANUAL 
 
 BANK MANAGER'S CERTIFICATE. 
 
 In the matter of the application of and 
 
 others foi* letters patent of incorporation, as '' The 
 ConijKinj " (Limited). 
 
 J, , of the . of at 
 
 th(« of In in 
 
 th<* of and Province of do 
 
 liereby certify 
 
 That there is deposited in this bank to, the credit 
 of (a) the snm of dollars, 
 
 and the said snm is now remaining; at such credit. 
 
 Dated at aforesaid this day 
 
 of , A.D. 18 . 
 
 Witness Manager (oy ((f/ent). 
 
 (a) (Here state if amowiit he deposited to the credit of 
 the company or of trustees therefor.) 
 
at 
 ill 
 do 
 
 CHAPTER 111). 
 
 REVISED STATUTES OF CANADA, 188G. 
 
 An Act respecting the incorporation of Joint Stock a.d. isac. 
 Companies by Letters Patent, 
 
 HEK Majesty, by and with the advice and oouseut of 
 the Senate and House of Conunons of Canada, 
 enacts as follows: — 
 
 1. This Act may be cited as "The Companies ^d." short title 
 
 3. In this Act, and in all letters patent and sni)ple- interpreta- 
 mentary letters patent issued under it. unless the con- 
 text otherwise re(iuires. — 
 
 {u) The expression "the conii)any " means the com- "Com- 
 pany incorporated by letters patent under this A<t; 
 
 [It) The expression "the undertakinji' *' means thcrnaer- 
 business of every kinu which the comimny is authorized 
 to carry on ; 
 
 (c) The expression "loan company" meuiis a com-' Loan 
 piiuy incorporated for any of the purposes to which the' pany.- 
 powers of loan companies extend, as hereinafter pro- 
 vided; 
 
 ifl) The expression " real estate '' or " land," includes " Real 
 
 1 1 T "estate." 
 
 messuages, lands, tenements and liereditanients ot any "Land." 
 tenure, and all immovable property » f any kind; 
 
 (r) The ex])ression "^shareholder" means everv sub- ' siare- 
 
 ■ " holder." 
 
 scriber to or holder of stock in the company, and includes 
 I lie personal representatives of Ihe shareholder; 
 
 \V.S.D.M.— 17 
 
ifnii 
 
 258 
 
 SHAREHOLDEHS' AND PIHECTOHS MANUAL. 
 
 Li i 
 
 ^Ip 
 
 '•^ei? ^/) '^''^' cxpressiou "uiuuuger" iucliides the ta^lJii■l• 
 
 and secretary. 
 
 firumi"fo? ^' '^'^^ Goveruor hi Council may, by letters pateiil 
 
 luinroses under the Great Seal, j;;nint a charter to any number of 
 
 corporated P^**'^""^' ^^^^ '^'^^ ^^'^^ ^^'^> ^^'^^^ petition thercfor, cou- 
 
 pateut."" stitutinj; such persons, and others who thereafter become 
 
 shareholders in the company thereby created, a body 
 
 corporate and iiolitic, to: any of the purposes or olijects 
 
 to which the legislative authority of ihe rarliament of 
 
 icxcepUon. Canada extends, excej)t the construction and working of 
 
 railways, or the business of banking and the issue of 
 
 paper money, or the business of in;airance. 
 
 Notice to 
 be ({ivuii, 
 and what 
 it filial! 
 contain. 
 
 4. The api)licant8 for such letters patent shall give at 
 least one mouth's previous notice, in the Canada Gazette, 
 of their intention to apply for the same, stating therein, — 
 
 («) The proposed corporate name of the comjriny, 
 which shall not be that of any other known ccm[uiny, 
 incorporated or unincorporated, or any name liable to be 
 confounded therewith, or otherwise, on public grounds, 
 objectionable; 
 
 (h) The i>urposes for which its incorporation is 
 sought; 
 
 of'bSlS (t) The place within Canada which is to be its chief 
 place of business; 
 
 ((/) The proposed amount of its capital stock — which, 
 in the case of a loan company, shall not be less tlian one 
 hundred thousand dollars. 
 
 Name. 
 
 I'urposes. 
 
 Capital. 
 
 Shares. 
 
 Names.eto 
 of appli- 
 cants. 
 
 ((') The number of shares and the amount of each 
 share; 
 
 (/) The names in full and the address and calling of 
 each of the applicants, with special mention of the names 
 of not more than fifteen and not less than three of their 
 number, who are to be the lirst or provisional directors 
 of the company, and the majority of whom shall be 
 residents of Canada. 
 
DOMINION ACT, 
 
 259 
 
 tout 
 ;r of 
 oou- 
 'onu' 
 boily 
 
 jfttS 
 
 nt of 
 ug of 
 ue of 
 
 ivc ;vt 
 azette, 
 •ein, — 
 
 iiviuy, 
 a\taiiy, 
 ' to be 
 ouudt*, 
 
 ion i*^ 
 
 dnef 
 
 ;in one 
 
 Dins: of 
 nan\os 
 of theiv 
 irot-tors 
 iliall be 
 
 a. At any tiiiu', not more tlian onr nunilli aftrr t lie Pttition 
 lust publication of jsuch notice, the applicaiit.s may peti- I'li'teiit." * 
 tion the Governor in Council, thionj;h the Secretary of 
 State, for the issue «»f such letters pjitent: 
 
 2. Su€b petition shall state liie facts set forth inwimtit 
 the uotu-e. tue amouut ot stock taken by each api»lnant,tain. 
 the amou/it pai<l in upon the stork of riich appliriiut, and 
 I lie manner in ^\hi»■h the same has been jiaid in, and is 
 held for the conii>any: 
 
 li. The a;j:{2:repite of the .stock so taken shall be at \ ceitaiu 
 least the one-halt ot the total amount of the proposed stock must 
 (apital stock of the company: 
 
 4. The ajij-regate so iiaid in thereon shall, if theAn.iater 
 company is not a loan company, be at least ten jtei cent, ""'""'jt 
 of the stock so taken; if the company is a loan con ijKiuy thereon, 
 the afrf;re}»:ate so paid in of the stock so taken shall be at 
 least ten pw cent, thereof, and shall not be less than one 
 hundred thousand dollars: 
 
 T). Such atfsrecate shall be iiaid in to the credit of DiHrosai ..i 
 the company, or of trustees therefor, and shall be stand- i'«''i >'i'- 
 ing at such credit in some chartered bank or banks in 
 <"anada, unless the object of the company is one re(]uiiin;; 
 that it should own real estate — in which case any portion 
 not exceeding one-half of such aggregate may be taken 
 as ])iiid in, if it is bond fuh' invested in real estate suit- 
 able to sudi object, which is duly lield by trustees for 
 the company, and is of th<' required value, over and 
 above all incumbrances thereon: 
 
 0. The i)etition may ask for the embodying in the cvitain 
 letters patent of any provision which, under this Act, uiav'vie^'n- 
 might be made by bylaw of the cmnpany; and such pro- letters " 
 vision so embodied sliall not, unh'ss ]n*ovisi(ui to the con- ^'* '^" ' 
 tiary is made in tlie letters jiateiit, be subject to rejM'al 
 or alteration liy by-law. 
 
 O. liefore the letters patent are issued, the apjdicants I'leUmiu- 
 shall establish, to the satisfaction of the Secretary oftersto'bo 
 Slate, or of such other oflrtcer as is «harged by the 
 
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260 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 Proof of 
 
 facts 
 
 assertod. 
 
 Factsito be 
 recited iu 
 letters 
 patent. 
 
 Governor 
 may give 
 auotlier 
 corporate 
 name. 
 
 Notice of 
 issuing let- 
 ters patent. 
 
 Governor 
 may 
 cliduge 
 name by 
 supple- 
 mentary 
 patent. 
 
 (jovernor in Council to report thereon, the suflflciency of 
 their notice and petition, and the truth and sufficiency of 
 the facts therein set forth, and that the proposed name is 
 not the name of any otlier known incorporated or unin- 
 corporated companA*; and for that purpose, the Secretary 
 of State, or sucli other officer, shall take and keep of 
 record any requisite evidence in writing', by oath or 
 affirmation or bj- solemn declaration. 
 
 7. The letters patent shall recite such of che estab- 
 lished averments of the notice and petition as to the 
 (Jovernor in Council seems expedient. 
 
 S. The Governor in Council may give to the company 
 a corporate name, ditt'ereut from that proposed by the 
 applicants in their published notice, if the proposed 
 •lame is objectionable. 
 
 I>. Xotice of the granting of tie letters patent shall 
 !»(' forthwith given by the Secretary of State, in the 
 Canada Gazette in llu' form A. in the schedule to this 
 Act; and thereupon, from the date of the letters patent, 
 the persons therein nanu^d, and their successors, shall be 
 a body corporate and politic, by the name mentioned 
 therein; and a copy of every such notice shall forthwith 
 be, by the company to which such notice relates, inserted 
 on four separate occasions in at least one newspaper in 
 the county, city or place where the head office or chief 
 agency is established. 
 
 lO. If it is made to appear, to the satisfaction of 
 the Governor in Council that the name of any company 
 (whether given by the original or by supplement;* "v 
 letters patent, or on amalgamation) incorporated Jinder 
 this Act, is the same as the name of an existing incor 
 porated or unincorporated company, or so similar 
 thereto as to be liable to be confounded therewith, the 
 (Jovernor in Council may direct the issue of supple 
 mentary letters patent, reciting the former letters and 
 changing the name of the company to some other name 
 which shall be set forth in the supplementary l'»tters 
 patent. 
 
DOMINION ACT. 
 
 261 
 
 11. When a conipanv incorporated uuder this Act is company 
 
 I • i? 1 ^' ' .1 XI i-. • luay obtain 
 
 desirous of adoi)ting anotlior name, the Governor in change of 
 
 ,, name. 
 
 Council, upon being satisfied that the change desired is 
 not for any improper purpose, may direct the issue of 
 supplementary letters jiatent, reciting the former letters 
 ^ atent and changing the name of the company to some 
 other name, which shall be set forth in the supplemcn 
 tary letters patent. 
 
 12. No alteration of its name umler the two sections change 
 next preceding shall affect the rights or obligations of affect 
 
 ., -1 11 1. 1 .1 rights or 
 
 the comi»any; and all proceedings may be continued or obuga- 
 commenced by or against the company under its new 
 name that might have been continued or rtnumenced by 
 or against the comjiany under its former name. , 
 
 13. The comi)anv mav, from time to time, bv a Companv 
 resolution passed by the votes of sharehobh'rs n-iire- orize direc- 
 
 * . tors to ap- 
 
 senting at least two-thirds in value of the subscribed piy for ex- 
 
 . tension of 
 
 .'itock of the company, at a special general meeting called powers. 
 for the purpose, authorize the directors to apply for sup- 
 plementary letters jiateut extending the powers of the 
 company to such other purposes or objects, for which a 
 company- may be incorporated under this Act, as are 
 defined in the resolution. 
 
 14. The directors mav, at any time within six -^I'piica- 
 
 •^ ' *' tion by 
 
 months after the passing of any such resolution, petition directors. 
 the Governor in Council, through the Secretary of State, 
 for the issue of such supplementary letters patent: 
 
 2. The applicants for such supplementary letters Notice of 
 patent shall give at least one nKtuth's notice in the tion to be 
 Canada Gazette of their intention to apply for the same, 
 stating therein the purposes or objects to which it is 
 desired to extend the powers of the company, 
 
 15. Before such supplementarv letters ])atent are J'^oof toiJ« 
 
 ^ ^ '■ '■ furuiBhed 
 
 issued, the applicants shall establish to the satisfaction to secje- 
 
 * * tary of 
 
 of the Secretary of State or of such other officer as is state. 
 charged by the Governor in Council to repoi-t thereon, 
 the due passing of the resolution authorizing the applica- 
 

 i 
 
 4 ' 
 11 ^ 
 
 II 1 1 
 
 262 
 
 Grant of 
 
 Bupple- 
 
 nientary 
 
 letters 
 
 patent. 
 
 Kotice of 
 
 issue 
 
 thereof. 
 
 Subdivi- 
 sion of 
 shares. 
 
 Increase of 
 capital 
 
 Hy-law for 
 that pur- 
 pose. 
 
 Keductiou 
 of capital. 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 tion and the sufficiency of their notice and petition; and 
 for that purpose the Secretary of State, or such other 
 officer, shall take and Iceep of record any requisite 
 evidence in writing, by oath or affirmation, or by solemn 
 declaration. 
 
 lO. Upon due proof so made, the Governor in 
 Council may grant supplementary letters patent under 
 the Great Seal, extending the powers of the company to 
 all or any of the objects defined in the resolution; and 
 notice thereof shall be forthwith given by the Secretary 
 of State, in the Canada Gazette, in the form B. in the 
 schedule to this Act; and thereupon, from the date of 
 the supplementary letters patent, the uiuleitakiug of the 
 company shall extend to and include tlie other purposes 
 or objects set out in the supplementary letter patent as 
 fully as if such other purposes or objects were mentioned 
 in the original letters patent; and a copy of every such 
 notice shall forthwith be. by the company to which the 
 notic(! relates, inserted on four separate occasions in at 
 least one newsjKiper in the county, city or place where 
 the head office or chief agency is established. 
 
 17. The directors of the com[>aiiy. other than a loan 
 company, may. at any time, make a by-law subdividing 
 the existing shares into shares of a smaller amount. 
 
 IH. The directors of the company may, at any time, 
 after the whole capital stock of the company has been 
 taken up and fifty per cent, thereon paid in, make a by- 
 law for increasing the capital stock of the company to 
 any amount which they consider reijuisite for the due 
 carrying out of the objects of the company: 
 
 2. Such by-law shall declare the number of the 
 shares of the new stock, and may ]>rescribe the manner 
 in which the same shall be allotted; and in de^iult of its 
 so doing, the control of such allotment shall vest abso- 
 lutely in the directors. 
 
 19. The directors of the company may, at any time 
 make a bylaw for reducing the capital stock of the 
 
 n 
 
DOMINION ACT. 
 
 203 
 
 rompaiiy to any amount which they consider advisable 
 iuid sufficient for the due carrying out of the undertaking 
 of the company; but the capital stock of a loan company 
 shall never be reduced to less than one hundred thous- 
 and dollars: 
 
 2. Such by-law shall declare Ihe number and value 
 of the shan's of the stock as so reduced, and the allot- 
 ment thereof, or the manner in which the same shall be 
 nuuh'. ' . •■ " 
 
 M. The liability of shareholders to persons who were, 
 at the time of the reduction of the capital, creditors of 
 the company, shall remain the same as if the capital had 
 not been reduced. 
 
 20. No by-law for increasing or reducing the capital 
 stock of the company, or for subiiividing- the shares, shall 
 have any force or effect whatsoever, until it is approved 
 by the votes of shareholders n/presenting at least two- 
 thirds in value of all the subscribed stock of the com- 
 pany, at a special general meeting of the company duly 
 called for considering the same, and afterwards confirm- 
 ed by supplementary letters patent. 
 
 21. At anv time, not more than six months after 
 such sanction of such by-law, the directors may petition 
 the Governor in Council, through the Secretary of State, 
 for the issue of supplementary letters patent to confirm 
 the same: 
 
 -. The directors shall, with such petition, produce a 
 (•(»I»y of ^uch by-law, under the seal of the company, and 
 signed by ihe president, vice-president or secretary, and 
 establish to ihe satisfaction of the Secretary' of State, 
 or of such other officer as is charged by the Governor in 
 <'oun(il to report thereon, the due passage and approval 
 of such by-law, and the expediency' and bona Jide char- 
 acter of the increa>;e or reduction of capital or sub- 
 division of shares, as the case nuiy be. thereby provided 
 for: 
 
 Proviso : 
 as to loan 
 cuuipauieB. 
 
 Hy-law for 
 that pur- 
 pose. 
 
 Liability 
 to credit- 
 ors not iif 
 (ected. 
 
 Such hy- 
 liiw to he 
 approved 
 by share- 
 holders 
 and con- 
 Urnied by 
 fapple- 
 nientary 
 letters 
 patent. 
 
 Pellticn 
 
 for supplo- 
 
 uientary 
 
 letters 
 
 patent to 
 
 confirm 
 
 by-law. 
 
 Hy-law, 
 
 etc., to be 
 produced 
 witli peti- 
 tion. 
 
M^' 
 
 264 
 
 SHAREHOLDERS AND DIUECTOUS MANUAL. 
 
 Evidenco 3. ^lie Secretary of State or such officer shall, for 
 
 may be •^ 
 
 k^.tb*^"*^ that i)uri)08e, take and keep of record any requisite evi- 
 ^ecr^e^tary dcDce iu Writing, by oath or affirmation or by solemn 
 declaration, as above mentioned. 
 
 of state. 
 
 1 
 
 I I ■ 
 
 
 n 
 
 -notice ; 
 effect of 
 such let- 
 ters pa- 
 tent. 
 
 ^f'supLle- ^^' ^ Pou due proof so made, the Governor in 
 
 ieuers"^^ Couucil uuiy grant such supplementary letters patent 
 -no"iP.i-"°*^^'^' ^^*^' Oreat Seal; and notice thereof shall be forth- 
 with given by the Secretary of State in tlie Caiunia 
 Gazette, in the form C, in the schedule to this Act ; and 
 thereupon, from the date of the supplementary letters 
 patent, the capital stock of the company shall be and 
 remain increased or reduced, or the shares shall be sub- 
 divided, as the case may be, to the amount, in the man- 
 ner and subject to the conditions set forth by sudi by- 
 law; and the whole of the stock, as so increased or 
 reduced, shall become subject to the provisions of this 
 Act, in like manner, as far as possible, as if every part 
 thereof had been or formed part of the stock of the com- 
 pany originally subscribed. 
 
 33. All powers given to the company by the letters 
 8"bject to patent or sui»i)lemeutry letters patent shall be exercised. 
 
 Powers 
 given to bo 
 
 this Act. 
 
 subject to tlie provisions and restrictions contained in 
 this Act. 
 
 General 
 
 corpornto 
 
 powers. 
 
 S44. Every company incorporated under this Act may 
 acquire, hold, sell and convey any real estate requisite 
 for the carrying on of the undertaking of such company, 
 and shall forthwith become ind be invested with all pro- 
 perty and rights, real and personal, theretofore held by 
 or for it under any trust created witli a view to its in- 
 corporation, and with all the powers, ju'ivileges and 
 immuniti« s requisite or incidental to the carrying on of 
 its undertaking, as if it was incorporated hy a special Act 
 of rarliament, embodying the provisions of this Act and 
 of the letters patent: Provided always, that the exercise 
 companies. \^y lo^u companies of the powers conferred by liis 
 section shall be subject to the special jjrovisioiis respect- 
 ing such companies hereinafter contained. 
 
 Proviso; 
 as to loan 
 
DOMINION ACT. 
 
 2(35 
 
 85. Tlio stock of the company shall be personal '^e°gon^i''' 
 estate, and shall be trausfertible, in such manner, and «'^^*^«- 
 subject to all such (onditions and restrictions as are 
 prescribed by this Act or by tiie letters patent or by 
 by-laws of the company. 
 
 2«. If the letters patent, or the supplementary let- Allotment 
 
 ' i X . of s;ock. 
 
 ters jiatent. make no other detinite i)rovision, the stock 
 of the company, or any increased amount thereof, so far 
 as it is not allotted thereby, shall be allotted at such 
 times and in such manner as the directors prescribe by 
 by-law. 
 
 27- Every share in the company shall, subject ^^be^fak/fn 
 the provision of sub-s.'ction tire of section five of this9'i8»^' "ui^- 
 
 * ject to 
 
 Act, be deemed to have been issued and to be held sub- certain ex- 
 
 ' ceptions. 
 
 ject to the payment of the whole amount thereof in 
 • ash, unless the same has been otherwise agreed upon 
 or determined by a contract duly made in writing and 
 filed with the Secretary of State at or before the issue 
 of such shares. 
 
 38. The affairs of the company shall be managed ^o^rdjjf^ 
 by a board of not more than fifteen and not less than 
 three directors. 
 
 2?>. The persons named as such, in the letters itat- r'"°^': 
 cut. shall be the directors of the company, until replaced directors. 
 Iiy others duly appointed in their stead. 
 
 30. No person shall be elected or appointed as a di- ^"ns of"' 
 rector thereafter unless he is a shareholder, owning stock j'irr^org"* 
 absolutely in his own right, and to the amount recjuired 
 by the by-laws of the company, and not in arrear in r»'- 
 sjiect of any call thereon; and at all times the majority 
 <if the directors of the company shall be persons resi- Residence, 
 •lent in Canada. 
 
 31. The companv nuiv. bv bv-law. increase to notl'y'aw 
 
 for 
 icrease or 
 
 more than fifteen, or decrease to not less than three, ^lecrea^e of 
 
 number of 
 
 the number of its directors, or may change the com- directors. 
 j)any"s chief jrlace of business in Canada; but no by-law 
 for either of the said ]iurposes shall be valid or acted 
 

 ilr 
 
 M I 
 
 ii ; 
 
 ;;'■ 
 
 I iil' 
 
 I il 
 
 li 
 
 266 
 
 Wheu to be 
 valid. 
 
 Rlectiou o{ 
 directors. 
 
 Mode and 
 times of 
 election. 
 
 Yenvlv. 
 
 Notice. 
 
 Votes. 
 
 I'roxie?. 
 
 All calls 
 uiiist have 
 been paiJ. 
 
 Majority to 
 decide. 
 
 Casting 
 vote. 
 
 SHA.UEHOLDEIIS AND DIUECTOHS MANUAL. 
 
 upon unk'HB it is approved bv ji vote of at least two- 
 thirds iu value of the stock represented by the share- 
 holders present at a special {j^eueral meeting duly called 
 for considering the by-law; nor until a copy of such by- 
 law, certified under the seal of the company, has been 
 deposited with the Secretary of State, and has also been 
 published in the Canada Gazette. 
 
 Jja. Directors of the company shall be elected by 
 the shareholders, in general meeting of the company as- 
 sembled at some place within Canada, — at such times, 
 in such manner and for such term, not exceeding two 
 years, as the letters patent, or, in default thereof, as the 
 by-laws of the company, prescribe. - , . 
 
 JJJi. In the absence of other provisions in such be- 
 half, in the letters patent or by-laws of the company, — 
 
 ((/) The election of directors sliall take place yearly, 
 and all the directors then in office shall retire, but, if 
 otherwise qualified, they shall be eligible for re-election. 
 
 (6) Notice of the time and place for holding general 
 meetings of the company shall be given at least twenty- 
 (Hie days previously tliereto. in some newspai)er pub- 
 lished in the place where the head office or chief place 
 of business of the company is situate, or if there is no 
 such newspaper, then in the place nearest thereto in 
 which a newspaper is published; , . • .. 
 
 (c) At all general meetings of the company, every 
 shareholder shall be entitled to give one vote for each 
 share then held by him: such votes may be given in per- 
 son or by proxy — the holder of any such. pr(»xy being 
 himself a shareholder, but no shareholder shall be en- 
 titled, either in person or by proxy, to vote at any meet- 
 ing unless he has paid all the calls then jtayable uj)on all 
 the shares held by him; all (juestions proposed for the 
 consideration of the shareholders shall be determined bv 
 
 ft/ 
 
 the majority of votes — the chairman presiding at such 
 meeting having the casting vote in case of an ec^uality 
 of votes; 
 
DOMINION' ACT. 
 
 267 
 
 {(I) Every election of direetcn's shall be by ballot; "*•'"' 
 
 ((') Vacancies occun-in}^ in the bfKird of directors vacancies, 
 may lie rilled, for the reniannler of the icrni. by the di- 
 rectors from among the qualified shareholders of the 
 <'ompany; 
 
 if) The directors shall, from *ime to time, elect from I'.i^eBidei.t. 
 
 ^1 ' _ vice-proMi- 
 
 among themselves a president an<), if they see fit. ^0^?*/"'' 
 vice-president of tlu- company; and may also appoint all 
 other officers thereof. 
 
 514. If. at any time, an election of directors is not ^ ^cl'dlrlc- 
 made. or does not take effect at the iiroper time, the'"'^"'"'^^' 
 company shall not be held to be thereby dissolved; but 
 such election may take place at any subseciueut j;eneral 
 meeting of the company duly called for that purpose; 
 and the retiring directors shall continue in oftice until 
 their successors are elected. 
 
 JJ*5. The directors of the company may administer cowers 
 the affairs of the company in all things, and make orofdircc-" 
 cause to be made for the company, any description of 
 contract which the company may. by law. enter into; 
 and may, from time to time, make by-laws not contniry 
 to law. or to the letters patent of the company, or to 
 tiiis Act. for the following purposes: — 
 
 (a) The regulating of the allotment of stock, the stock, 
 making of calls thereon, the payment thereof, the issue 
 and registration of certificates of stock, the forfeiture 
 of stock for non-payment, the disposal of forfeited stock 
 and of the proceeds thereof, and the transfer of stock; 
 
 (?>) The declaration and payment of dividends; oividendp. 
 
 (c) The number of the directors, their term of ser- Number, 
 vice, the amount of their stock qualiHeation, and their directoie. 
 remuneration, if any; 
 
 (d) The appointment, functic!ia. duties and removal Asenta and 
 of all agents, officers and servants of the company, the 
 security to be given by them to the company and their 
 remuneration; 
 
/ / 
 
 t ' 
 
 III' 
 
 I 
 
 IIIH) 
 
 ^ 
 
 Is 
 
 
 268 
 
 MeetingB. 
 
 Penaltlep. 
 
 General 
 
 Co.ifirma- 
 tioi of by- 
 law?. 
 
 Conflrnia- 
 tioii of by- 
 laws for 
 Bale of 
 stock be- 
 low pre- 
 viouB rate, 
 etc. 
 
 Debts to 
 Company 
 may be de^ 
 ducted 
 from divi- 
 deudF. 
 
 Issue of 
 bonds, etc.. 
 by com- 
 pany. 
 
 Borrowing 
 powere. 
 
 SHAUEHOLDEUS ANt) DIRECTOUS MANUAL. 
 
 ((') The time aiul plat't* for tbt* Iioldin^ of the anmial 
 iiKH'tinjfs (if tilt' ((unpaiiy, (he tailing of mct'tings, regu- 
 lar and sjuMial. of tin- board t>f tliroctors and of the com- 
 pauy, the (iiioruiii, the nMHiirenu'iitH as to proxies, and 
 the procedure in all tilings at suth meetings; 
 
 (/) Tho iini>o.sition and recovery of all penalties axjd 
 forfeitures which admit of regulation by by-law. 
 
 (f/) The conduct, in all other jiartit iilars, of the af- 
 fairs of the conii;any; 
 
 And the directors may, from time to time, repeal, 
 amend or re-enact the same; but every such by-law, and 
 every repeal, amendment or re-enactment thereof, un- 
 less in the meantime confirmed at a general meeting 
 of (he cempanx. duly called for that purjiose, shall only 
 have force until the next annual meeting of the cttmpuny, 
 and in default of coulirmatior. thereat, .shall at and from 
 that time only, cease to have force; 
 
 L*. No by-law for the issue, allotment or sale of any 
 l»ortitui of the unissued stock at any greater discount or 
 at any less i)remiuni than that which has been pie\i- 
 ously authorized at a general meeting, and no by-law 
 for the remuneration of the juesident or any dire<tor. 
 shall be valid or acted uixm until the same has been con- 
 tinued at a general meeting. 
 
 30. The directors may deduct from the dividends 
 payable to any shareliolder all such sums of money as 
 are due from him to the conii)any, on account of calls 
 or otherwise. 
 
 ST*. The directors may. when authorized by a by- 
 law for that jiurjiose. ]iassed and ajtitroved of by the 
 votes of shareholders, repre-senting at least two-thirds 
 in value of the subscribed stock of the company, repre- 
 sented at a special general meeting duly called for con- 
 sidering the by-law. — 
 
 Ui) liorroAV money u])on the credit of the company 
 and issue bonds, debentures or other secnnties for any 
 sums borrowed, at such prices as are deemed necessary 
 
DOMINION' A(;r. 
 
 2Ui) 
 
 or expedient; but tio such deln'ntureH shall be for a less 
 sum thau one hundred dollars; 
 
 (/») Hypothecate or pledge the real or personal pro- rimiBiiK,' 
 jM'rty of the eouipany to secure any sums borrowed by 
 the compauy; 
 
 I'.ut the anuuint borrowed shall not, at any time. beLimitnti 
 
 of 
 
 'n 
 ut 
 
 greater tiian seventy -tive per cent. »)j tlie actual paid uptobe i>or. 
 stock of the company; but the limilati(ui made by this 
 section shall not ai»ply to commercial paper disKouuted Exceptiou. 
 by the company.^ 
 
 38. The directors may, from time to time, makecaiiiug in 
 such calls upon the shareholders ni respect of all moneys mipaid ou 
 unpaid upon their respective shares, as they think lit. at 
 Kuch times and places and in such payments or instal- 
 ments as the letteis patent, or this Act, or the by-laws 
 of the company reiiuire or allow. 
 
 3tt. A call shall be deemed to have been made at interest on 
 the time when the resolution of the directors authorizinj*; duo. 
 ,s\ich call was passed, and if a shareholder fails to i>ay 
 any call due by him. ou or before the day appointed foi- 
 the payment thereof, he shall be liable to pay interest 
 for the same, at the rate of six per cent, per annum, 
 from the day appointed for [tayment to the time of actual 
 payment thereof. 
 
 40. The directors may, if they think fit. receive paynunt 
 from any shareholder willing to advance the same. allou1\iare»® 
 or any part of the amounts due on the siiares held by 
 such shareholder, beyond the sums then actually called 
 for; and upon the money so paid in advance, or so much 
 thereof as, from time to time, exceeds the amount of the 
 calls then nmde upon the shares in respect of which such {"ay'^f 
 advance is nmde, the company may pay interest at such*"****"** 
 rate, not exceedinj^ eight per cent, inn- annum, as the 
 shareholder who pays such sum in advance, and the 
 directors agi^'ee upon. 
 
 ' Amended by Chap. 27, 1897, which see infi'i. 
 
Ill 
 
 I 
 
 A 
 
 270 
 
 Forfeiture 
 of H)iarea 
 for Don- 
 pnvinoiit of 
 calla. 
 
 l'rov'80 : 
 liability 
 of holders 
 roatinued. 
 
 SHAHEHOLDEHS' AND DIHECToJls' MANUAL. 
 
 41. If. after muh (Iciiiimd or notice iiH m pros.iilM'J 
 by tin* l«'tt«'is jiateut or by the by-IawH of the compan.v, 
 any call made upon any share is not paid witiiin snrh 
 (inie as, by snch letters jiatent or by 1h«' by laws, is 
 limited in that behalf, the directors in their discretion, 
 by vote to tliat effect dnly recorded in tlieir minutes, 
 may summarily declare forfeited any shares whereon 
 such payment is not made; and the same shall thereupon 
 become the ]»ropei'ty of the company, and may Iw rfis- 
 jiosed of as, by the by-laws of the company or otherwise, 
 they prescribe; but, notwithstanding such forfeiture, 
 the holder of such shares at the time of forfeiture shall 
 continue liable to the then creditors of the company for 
 the full amount unpaid on such shares at the time of 
 forfeiture, less an}- sums which are subsecpiently re- 
 ceived by the company in respect th( i eof. 
 
 42. The directors may, if they see fit, instead of 
 declaring forfeited any share or shares, enforce pay- 
 ment of all calls, and interest thereon, by action in any 
 Court of competent jurisdiction; and in uch action it 
 shall not be necessary to set forth the special matter, 
 but it shall be sullicient to declare that the defendant is 
 the holder of one share or more, stating the number of 
 shares, and is indebted in the sum of money to which the 
 calls in arrear amount, in respect of one call or more, 
 upon one share or more, stating the number of calls and 
 the amount of each call, Avliereby an action has accrued 
 to the company under this Actj and a certificate under 
 their seal, and purporting to be signed by any officer of 
 the company, to the effect that the defendant is a share- 
 holder, that such call or calls has or have been made, 
 and that so much is due by him and unpaid thereon, 
 shall be received in all Courts as prima facie evidence 
 thereof. 
 
 ke^t and''^ 43. The company shall cause a book or books to be 
 co'iftafn. '^'^'1*^ ^^y ^^^^ secretary, or by some other oflScer speci- 
 ally charged with that duty, wherein shall be kept re- 
 corded, — 
 
 Enforce- 
 iiient of 
 payment of 
 oftlls by 
 action. 
 
 What only 
 need be 
 alleged and 
 proven. 
 
 Certificate 
 to be evi- 
 dence. 
 
DOMINION ACT. 
 
 271 
 
 (a) A copy of tho h'ttci's patent incorporating thocpvoi 
 
 , , U'tttTH 
 
 coinpauv, and of all siipplcnicntary letters patent, an«l patent, by. 
 of all by-laws tnereot; 
 
 {h) The names, alphabetically arranged, of all per- KBine» of 
 hons who are or have been shareholders; bokiere. 
 
 {(■) The address and callin}; of evei-y such person. AidrcHKB. 
 while such shareholder; 
 
 ((/) The number of shares of stock held by each Number of 
 shareholder; • 
 
 ((•) The amounts i)aid in and remaininij; 'inpaUl re-Ainounts 
 spectively, on the stock of each shareholder; 
 
 (/) The names, addresses and calling of all persons N'mf. etc. 
 who are or have been directors of the company, with tlu* 
 several dates at whi<h each became or ceased to be such 
 directoi' ; 
 
 2. A book called the register of transfers shall be H-ist.rot 
 
 ^ trail stern. 
 
 provided, and in such book sl'.all be entered the particu- 
 lars of every transfer of shares in the capital of the 
 rompany. 
 
 44. Such books shall, during reasonable business Hooks to bo 
 hours of everv day, except Sundays and holidays, be kept insi)ti;tk)ii 
 
 ■, ". .. „, ■, 1 ■, t Tj. .. aud takiiiK 
 
 oiR'n tor tlie insi)ection of shareholders and creditors ot extracts 
 the company, and their personal representatives, at the 
 head ottice or chief place of business of the company; 
 j/jd every such shareholder, creditor or personal repre- 
 sentative may make extracts therefrom. 
 
 4*5. Every director, oflicer or servant of the com- i-enaity lor 
 pany, who kuovtingly mokes or assists in making any tries. '^'^ 
 untrue entry in any such booiv, or who refuses or wil- 
 fully neglects to nuike any proper entry therein, or to 
 exhibit the same, or to allow the same to be inspected 
 and extracts to be taken therefrom, is guilty of a mis- 
 demeanor. 
 
 415. F]very company which neglects to keep such Forfeiture 
 book or books as aforesaid, shall forfeit its corjtorate "'' '"''^ '^'-•" 
 lights. 
 
h r* 
 
 272 
 
 shareholders' and directors' manual. 
 
 pruna^l" ^7. Sufli books shtill he pvimu facie evidence of ali 
 evidence, f^cts purporting to hi' tlieieln- stated, in any action, suit 
 
 or proceedincr against the company, or against any 
 
 shareliolder. 
 
 Transfer of 
 shares valid 
 
 48. No transfer of shares, unless made by sale un 
 on;y after aj^r execution, or under the decree, order or judgment of 
 u Court of competent jurisdiction, shall be valid for any 
 purpose whatever, until entry thereof is duly made in 
 the register of transfers, except for the purpose of ex- 
 hibiting the rights of the parties thereto towards each 
 other, and of rendering the transferee liable, in the 
 meantime, jointly and severally, with the transferor, to 
 the cojnpany and its creditors. 
 
 Liabilities 
 of directors 
 
 as rei 
 trans 
 
 40. No transfer of shares, whereof the whole 
 gards amount had not been paid in. shall be made without the 
 
 nets of '■ 
 
 cenffn'" <^oustnt of the directors; and whenever any transfer of 
 cases. shares not fully paid in has been made with such con- 
 stat, to a person who is not apparently of sutticient 
 means to fully pay up such shares, the directors shall be 
 jointly and severally liable to the creditors of the com- 
 pany, in the same manner and to the same extent as the 
 transferring shar«4iolder, but for such transfer, woiild 
 have been; but if any director present when any such 
 transfer is allowed does forthwith, or if any director 
 then absent does, within twentv-four hours after he be- 
 comes aware thereof and is able so to do, enter on the 
 minute book of the board of directors his protest against 
 the same, and within eight days thereafter publishes 
 such protest in at least one newspaper published at the 
 pla<e in which the head office or chief place of business 
 of the company is situated, or if there is no newspaper 
 there published, then in the newspaper published nearest 
 thereto, such directoi may thereby, and not otherwise, 
 exonerate himself from such liability. 
 
 Provision SO. >A'henever the interest in anv shares of tlie 
 
 when 
 
 shares are capital stock of tlio couipauv IS transmitted bv the death 
 
 trausiuit- "■ 
 
 ted other- of auv shareholder or otherwise, or whenever the owner- 
 wise than 
 bytransfer. ship of or legal right of possossion in any shares changes 
 
 How only 
 a director 
 may avoid 
 liability. 
 
DOMINION ACT. 
 
 273 
 
 by any lawful nieansi, other than by transfer according 
 to the provisions of this Act. and the directors of the 
 company entertain reasonable doubts as to the legality 
 of any claim to such shares, the company may make and 
 tile, in one of the superior Courts in the Province in °o\'/n u/a • 
 which the head office of the company is situated, a d<>-of,"aimi'ca*' 
 daration and petition in writing, addressed to the jus- '» '»• 
 rices of the Court, setting forth the facts and the num- 
 ber of shares previously belonging to the person in 
 whose name euch shares stand in the books of the com- 
 pany, and praying for an order or judgment adjudicating 
 and awarding the said shares to the person or i>ersons 
 legally entitled to the same, — by which order or judg- 
 ment the company shall be guided and held fully harm- 
 less and indemnified and released from every other claim 
 to the said shares or arising in respect thereof; 
 
 2. Notice of the intention to present such petition Notice of 
 shall be given to the person claiming such shares, or totion. 
 the attorney of such person duly authoriz«'d for the pur- 
 pose, who shall, upon the filing of such petiti<m. establish 
 his right to the shares referred to in such petition; and 
 the time to plead and all other proceedings in such cases 
 shall be the same as those observed in analogous cases 
 Ix'f'.^re the said Superior Courts: Provided always, that fj^oJitB ^^ 
 the costs and expenses of procuring such order or judg- 
 ment shall be paid by the ihm'sou or persons to whom 
 such shares are declared lawfully to belong; and that 
 such shares shall not be transferred in the books of the 
 <'ompany until such costs and expenses are paid. — saving 
 the recourse of such person against any person contest- 
 iiig his right to such shares. 
 
 »51. No share shall be transferable until all previous Rostriction 
 
 ,, ,, i< II • 1 • as to traufl- 
 
 ealls thereon are fully paid in. f^r. 
 
 52. The directors may decline to register any trans- as to trans- 
 fer of shares belonging to any shareholder who is in dXior to 
 debted to the company. pany.'"" 
 
 W.S.D.M.— 18 
 
■ ■ \ l\ 
 
 274 SHAREHOLDEKS' AND DIRECTORS' MANUAL. 
 
 Transfer by 53. Vuy tijiusfor of tbe sliju'es 01' otliei" interest of 
 
 perBonai • 
 
 Topttiaenth- r^ deceased shareholder, made by his personal represen- 
 tative, shall, notwithstanding; sneh personal representa- 
 tive is not himself a shareholder, be of the same validity 
 as if he had been a shareholder at the tin\e of his execu- 
 tion of the instrument of transfer. 
 
 tive. 
 
 Liability 
 limited to 
 
 When 
 accrue. 
 
 !i4t. The shareholders of the company shall not, as 
 
 *^}°"^'^'^"such, be responsible for any act, default or liability of 
 
 stock. ^}^g company, or for any engagement, claim, jtayment. 
 
 loss, injury, transaction, matter or thing relating to or 
 
 connected with the company, beyond the amount unpaid 
 
 on their respective shares in the capital stock thereof. 
 
 Liability of 9S. Every shareholder, until the whole amount of 
 holders, his sluu'es has been paid up, shall be individually liable 
 to the creditors of the ccmipany to an amount equal to 
 that not i)aid up thereon; but he shall not be liable to an 
 action therefor by any creditor until an execution at the 
 suit of such creditor against the company has b«^eu re- 
 turned unsatisfied in whole or in part; and the amount 
 due on such execution, not exceeding the amount unpaid 
 on his shares, as aforesaid, shall be the amount recover- 
 able, with costs, from such shareholder; and any amount 
 so recoverable, if paid bj- the shareholder, shall be con- 
 sidered as paid on his shares. 
 
 »50. No person, holding stock in the company as an 
 iiabie"""*^ executor, administrator, tutor, curator, guardian or trus- 
 tee, shall be personally subject to liability as a share- 
 holder; but the estate and funds in the hands of such per- 
 son shall be liable in like manner, and to the same ex- 
 tent, as the testator or intestate, or the minor, ward or 
 interdicted person, or the person interested in such trust 
 fund Avould be, if living and competent to act and hold- 
 ing such stock in his own name; and no person holding 
 such stock as collateral security shall be personally 
 subject to such liability, but the person pledging such 
 stock shall be considered as holding the same, and shall 
 be liable as a shareholder accordingly. 
 
 Trustees, 
 etc., not 
 
DOMINION ACT. 
 
 275 
 
 S7- Evorv such executor, julmiiiiistratoi', curator, '''i^®"''*" 
 jjnardian or trustee shall represent the stock held h\ 
 him, at all me<'tinp:s of the company, and may vote as a 
 shareholder; and every pers«)n who pledges his stock 
 may represent the same at all such meetinjxs and, not- 
 withstanding such pledge, vote as a shareholder. 
 
 5S. If the directors of the company declare and Pii.v^^/^g^jj'^^^^ "' 
 any dividend when the conii)any is insolvent, or any 'jf;ia|j,"f " 
 dividend, the payment of which renders the t'omi)any ^^JJ" j^'^JJ|- 
 insolvent, or impairs the capital stock thereof, they shall ^"''^"^'•*' 
 be jointly and severally liable, as well to the company as 
 to the individual shareludders and creditors thereof, for 
 all the debts of the con.pany then existing, and for all 
 thereafter contracted during their continuance in ottice, j^^^^. ^^j,^. 
 respectively; but if any director present when such Jivi- ^""^"g^^i, 
 dend is declared does forthwith, or if any director then '•a^'^'^'ty- 
 absent does, within twenty-four hours after he becomes 
 aware thereof and able so to do, enter on the minutes of 
 the board of directors his ])rotest against the same, and 
 within eight days thereafter publishes such protest in 
 at least one newspaper i»ublished at the place in which 
 the head ottice or chief place of business of the company 
 is situated, or if there is no new.spaper there published, 
 then in the newspaper published nearest thereto, such 
 director may thereby, and not otherwise, exonerate him- 
 self from such liability. 
 
 *%9. No loan shall be made by the coni]>any to any no loan by 
 sliareholder; if such loan is made, all directors and other sharehoid- 
 omcers ot the company making the same, or in anywise by loan 
 assenting thereto, shall be jointly and severally liable f or liabiWty ot' 
 
 1 , <. 11 • i 1 . 'j J J ^ 1 ' directors. 
 
 uie amount of such loan, with interest to the company, — 
 and also to the creditors of the coini)any for all debts of 
 I lie company then existing, or cont.*acte<l between the 
 time of the making of such loan and that of tlu repay- 
 ment thereof; but the provisions of this section shall 
 not apply to loan companies. 
 
 OO. The V ctors of the companv shall be joint Iv Lability oi 
 
 * * directors 
 
 and severally liable to the clerks, laborers, servants andfjrwo^ca 
 
Il i 
 
 376. 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 ^:. 
 
 it ' ii:. 
 
 Limitatiou 
 of suits, etc. 
 
 Oflices and 
 
 agencies of 
 the coiii- 
 i)f»uy iu 
 Canada. 
 
 Service of 
 process on 
 the com- 
 pany. 
 
 Use of C( in- 
 luon Heal 
 dispel; sed 
 with ill c( !•• 
 tain casc^. 
 
 jsppreutiees thereof, for all d«^l)ts hot exeeedins ><ix 
 months' wages due for service performed for the com- 
 pany whilst they are such directors respectively; but no 
 director shall be liable to an action therefor, unless the 
 coMpany i'* sued therefor within one year after the debt 
 be lorjiet- due, nor unless such director is sued therefor 
 w' ' u one year from the time when he ceased to be 
 sucij il'reetor, nor unless an execution against the com- 
 l»any in respect of such debt is returned unsatisfied in 
 whole or in part; and the amount unsatioded on such 
 execution shall be the amount recoverable with costs 
 from the directors. 
 
 Ol. The company shall, at all times, have an office 
 in the city or town in which its chief place of business 
 is situate, which shall be the legal domicile of the coni- 
 pany in Canada; and notice of the situation of such office 
 and of any change therein shall be i)ublished iu the 
 I'anadd Hdzetti' ; and the company may establish such 
 other offices and agencies elsewhere in Canada as it 
 deems expedient. 
 
 <»8. An}' summons, notice, order or other process or 
 document required to be served upon the company, may 
 be served by leaving the same at the said office in the 
 city or town in which its chief place of business is situ- 
 ate, with any adult person in the employ of the company, 
 or on the president or secretan- of the company, or by 
 leaving the same at the domicile of either of them, or 
 with any adull person of his family or in liis employ; or 
 if the company has no known office or chief place of 
 business, and has no known president or secretary, the 
 Court may order such publication as it deems requisite, 
 to l»e made in the premises; and such publication shall 
 be held to be due service upon the company. 
 
 OS. Any summons, notice, order or proceeding re- 
 (Miiring authentication by the company may be signed 
 by any director, manager or other authorized officer of 
 the company, and need not be under the seal of the com- 
 pany. 
 
DOMINION ACT. 
 
 27-7 
 
 6-1. Notices to be st-rved by the compauy Jipou the Peryice of 
 shareholders may be servt'd either personally or by seud- upon mem- 
 ing them through thf post, iu registered letters, ad- 
 dressed to the shareholders at tluMr i>laces of abode as 
 they appear ou the books of tbe coiupauy. 
 
 05. A Dotioe or other document served by post by service oi 
 the company on a sharcluddcr, shall be held to be si-rved post. 
 at the time when the registered letter containing it 
 v.uuld be delivernd in +he ordinary course of iK)st; and to 
 prove the fact and time of service it shall be sufficient 
 to prove that such letter was properly addressed and 
 registered, and was put into the post office, and the 
 time Avhen it was put in. and the time re(juisite for its 
 delivery in the ordinary course of post. ... 
 
 66. A copy of any by-law of the company, under itsj^\^^^g<^«°f 
 .seal, and jiurjiorting to be signed by any officer of the 
 company, shall be received as against any shareholder ' 
 of the company as privui/acie evidence of such by-law 
 in all courts iu Canada. 
 
 6*7. Any description of action may be prosecuted f^^^^Jf^ont 
 aud maintained between the company and any share- Jha/e-*"'' 
 holder thereof; and no shareholder shall, by reason of''"'"**"' 
 being a shareholder, be incompetent as a witness therein. 
 
 68. In any action or other legal proceeding, it shall ?^?por°/.'"" 
 not be requisite to set forth the mode of incorporation [X'tTbe 
 of the company, otherwise than by mention of it under legirpro-"* 
 its corporate name, as incorporated by virtue of letters *^*'*^*"*''" 
 patent — or of letters patent and supplementary letters 
 patent, as the case may be — under this Act; and the 
 notice in the Canada Gazette, of the issue of such letters 
 patent or supplementary letters patent, shall be^/'/?Hrt 
 facie proof of all things therein contained; and on pro- 
 duction of the letters patent or supplementary letters Proof of in - 
 patent or of any exemplification or copy thereof under ^hjD."'* 
 the Great Seal, the fact of such notice shall be presumed ; 
 and, except in any proceeding by scire facias or other- 
 wise for the i>ur]H).se of rescinding or annulling the same, 
 the letters patent or supplementary letters patent, or 
 
lis 
 
 I 
 
 ) 
 
 I V 
 
 I 
 
 Kfiect of 
 
 such 
 
 charters. 
 
 27H SHAUEHOLDERS' AND DIUECTOKS' MANUAL. 
 
 any exemplitlcatiou or copy thereof under the Great 
 Seal, shall be conclu'.ive proof of every matter and thing 
 therein yet forth. 
 
 fompimea ®^- "^^y touipany heretofore incorponUed for aiiv 
 
 fS?cifarteis pi'i'P^se or object for which letters patent may be issued 
 Act.*" '^'"^ urder this Act, whethi'r under a s[>e(ial or a general 
 Act, and now being a subsisting and valid corporation, 
 may apply for letters patent under this Act, and the 
 Governor in Council, upon proof that notice of the ap- 
 plication has Ix'cn inserted for four weeks in the Canada 
 Gazette, may direct the issue of letters patent incor- 
 porating the shareh<dders of llie said <-ompany as a com- 
 pany under this A«t; and thereupon all the rights or 
 obligations of the fwiiner company shall be transferred 
 to the new comi»any, and all proceedings may be con 
 tinned or commenced by or against the new ccunpany 
 that might have been continued or commenced by or 
 against the old company; and it shall not be necessary 
 in any such letters patent to set out the names of the 
 shareholders; and after the issue of the letters patent, 
 the company shall be governed in all respects by the 
 provisions of this Act, except that the liability of the 
 shareholders to creditors of the old company shall remain 
 as at the time of the issue of the letters patent. 
 
 fompliiPea '^®' ^^ '*' Subsisting company applies for the issue of 
 
 fS^charters '^'^^«^i's patent uuder this Act, the Governor in Council 
 
 uinde^" '"**'^'' ^y ^^^ letters patent, extend the powers of the com 
 
 powers. pany to such other objects for which letters patent may 
 
 be issued under this Act as the applicant desires, and 
 
 as the Governor in Council thinks tit to include in the 
 
 letters patent, and whidi liave been mentioned in the 
 
 notice of the application for the same, in the Canada 
 
 Gazette ; and the Governor in Council may, in tlie said 
 
 letters patent, name the lirst directors of tlie new com- 
 
 piiny; and the letters patent may be issued to the new 
 
 company by the name of the old company or by another 
 
 name. 
 
DOMINION A^T. 
 
 27 » 
 
 Provisions 
 touciiiiiR 
 . upple- 
 uioiitary 
 lettorH pat- 
 ent to 
 apply. 
 
 Agencies in 
 
 United 
 
 Kingdom. 
 
 Dividend 
 not to im- 
 pair capi- 
 tal. 
 
 Special 
 ({eneral 
 meetiugK. 
 
 7\. All tlio provisions of this Act in relation to the 
 ohlaininj; (»f suppltnu'ntaiy letters jKitent by tompanies 
 incorpoiateil lu'icandcr shall, so far as applirahle, aj>ply 
 and extend to ai^plications for letters patent under the 
 two sec-tons next preeedinj,'. 
 
 72. The eoinpanv may have an a^'ency (»r ajjjeneies 
 ill any city or town in the I'nited Ivinjjdoni. 
 
 75. No dividend shall be declared which will im- 
 pair the capital of the company. 
 
 T4. Shareholders who hold one-fourth part in value 
 of tlie subscribed stock of tlu* company may, at any 
 time, call a special meeting thereof for the transaction 
 of any business specified in such written re(iuisition and 
 notice as they make and issue to that effect. 
 
 ^♦l. Kverv deed which anv person, lawfullv em- Acts of 
 
 ' • co!npany H 
 
 powered in that behalf by the company as its attorney, attorney 
 signs on behalf of the company, and seals with his seivl, 
 sliall be binding; on the company and shall have the 
 
 s.une etiect as if it was under the soul of the company. 
 
 76. Every contract, a}?reemeut, eugaj^ement or bar- contracts, 
 gain made, and every bill of exchange drawn, iieceptedjobebmd- 
 or endorsed, and every promissory note and che(iuei"^"y- 
 made, drawn or endorsed on behalf of the company, by 
 
 any agent, officer or servant of the company, in general 
 accordance with his powers as such unJer the by-laws 
 of the company, shall be binding upon the company; 
 and in no case shall it be necessary to have the seal of 
 the comi>any affixed to any such contract, agreement, 
 engagement, bargain, bill of exchange, promissory note 
 or chetiue. or to prove that the same was made, drawn, 
 iUM-epted or indorsed, as the case may be, in pursuance no individ- 
 <if any by-law or special vote or order; and the person go "*' "**^""*' 
 acting as agent, officer or servant of the company, shall 
 not be thereby subjecttni individually to any liability 
 whatsoever to any third person therefor ; Provided al- Proviso: ae 
 ways, that nothing in this Act shall be construed to notes." 
 authorize the company to issue any note payable to the 
 
^rm^. 
 
 .». 11 i! 
 
 2S6 SHAREHOLDEKS' AND DIKEdOUs' MANUAL. 
 
 bearer thereof, or any promissory note iuteua«3dto be 
 . circulated as money, or as tlie note of a bank, or 1o en- 
 gage ill the business of banking or insurance. 
 
 boS°y™c'c^ '^'^'- Troof of any matter which is necessary to be 
 
 l^davu."' •Qiit^t' under this Act may be made by oath or affirma- 
 tion, or by solemn declaration, before any justice of the 
 peace, or any commissioner for taking affidavits, to be 
 used ia any of the Courts in any of the PiH>vinces of 
 Canada, or any notary public, each of whom is hereby 
 authorized and empowered to administer oaths and re- 
 ceive affidavits and declarations for that purpose. 
 
 ^ormiiities' '^^' ^^^' provisious of this Act relating to matters 
 vaudatl" prelinunary to the issue of the letters patent or supi»le- 
 letters nieutarv letters patent shall be deemed directorv only, 
 
 patent. .1 . . 7 
 
 and no letters patent or sui»plementary letters i):itcnt 
 issued raider this Act shall be held void or voidable on 
 account of any irregularity in any notice prescribed by 
 this Act, or on account of the insufficiency or absence of 
 any such notice, or on account of any irregularity in re- 
 spect of any other matter preliminary to the issue of the 
 ' letters patent or sui»i>lementaiy letters patent. 
 
 it'e°d"tobe' '^^ '^^^^ company shall keei> i)ainted or affixed its 
 Mat\mine °'""*^'' ^'^^^^ ^^^^ word " limited " after the name, on the 
 ^^^^jj"i"^"y outside of every office or place in which the business of 
 notices, etc. the Company is carried on, in a conspicuous position, in 
 letters easily legible, and shall have its name with the 
 said word after it engraven in legible characters on its 
 seal, and shall have its name with the said word after it 
 mentioned in legible characters in all : ^tices, advertise- 
 ments, and other official publications of the company, 
 and in all bills of exchange, promissory notes, indo'r '- 
 nients, checjues, and orders for money or goods, purport- 
 ing to be signed by or on behalf of such company, and in 
 all bills of parcels, invoices and receipts of the company. 
 
 Penalty for 
 violation of 
 
 2. Every company which does not keep painted or 
 eectiol]'"'^ affixed its name, with the word '* limited " after it, in 
 manner directed by this Act, sIkijI incur a penalty of 
 
DOMINION ACT. 
 
 2H1 
 
 twenty dollars for cvi'ry «liiv (Itiriuj; wliich such iuuih' is 
 not so kept painted or allixcd. 
 
 3. Every director and nianauer of the loinuauv, wliui'enaitv for 
 kiiowiii^'Iy and wilfully authorizes or jierniits siieh de- violation. 
 fault, shall be liable to the like jKualty. 
 
 4. Everv director, nianajjer or ttlticer of the com- Penalty ou 
 
 , ■ .,,!«, directors 
 
 l>any, and every person on its behalf, who uses or au- or offlceri 
 thorizes the use of anv seal iiurportine: to be a seal ofautiiuriz- 
 
 ii 1 ' .. . , ., . , , iiiR use of 
 
 the company, whereon its name, with the said word seal with- 
 " limited " after it, is not so engraven as aforesaid, or ed" on it. 
 who issues or authorizes the issue of any notice, adver- 
 tisement or other otlicial publication of such company, 
 or who signs oi authorizes to be signed ou behalf of such 
 company any bill of exchange, promissory note, indorse- 
 ment, cheque, order for money or goods, or who issues 
 or authorizes to be issued any biU uf ■I'urcels, invoice or 
 receipt of the company, wheiein its name, with the said 
 word after it, is not mentioned in manner aforesaid, shall , , ,.. , 
 
 ' Liability in 
 
 incur a penalty of two hundred dollars, and shall also be addition. 
 personally liable to the hjlder of any such bill of ex- 
 change, promissory note, cheque, or order for money or 
 goods, for the amount thereof, unless the same is duly 
 paid by the company. 
 
 80. Eveiy prospectus of the company, and every no- gt''"''^^';'^'"'' 
 tice inviting persons to subscribe for shares in the com- t^'f.f g^on!"*" 
 pany, shall specify the dates and the names of the per- J^acts e.i- 
 sons to any contract entered into by the company or the !^^n°y°^,. ^^ 
 promoters, directors or trustees thereof, before the is- fra^ldutent 
 sue of such prospectus or notice, whether subject to 
 adoption by the directors or the company or otherwise; 
 and every prospectus or notice which does not specify '■ 
 
 the same shall, with respect to any person who takes 
 shares in the company on the faith of such prospectus 
 or notice, and who has not had notice of such contract, 
 be deemed fraudulent on the part of the i)romoters, di- 
 rectors and officers of the company who knowingly is- 
 sue such prospectus or notice. 
 

 282 
 
 Couii>aiiy 
 not to bio 
 liable in 
 respect of 
 trusts. 
 
 Uirectors 
 iudeiiini- 
 tied in 
 suit", etc., 
 acaiuHt tlie 
 oonipany. 
 
 lOxcept by 
 tlieir own 
 neslect cr 
 default. 
 
 Forfeiture 
 of charter 
 for non- 
 user. 
 
 Fees on let- 
 ters pateiU, 
 ytc, to bo 
 fixed by 
 Governor 
 in Council. 
 
 i 
 
 SHAUEHOLDEUS' AND DIUEtTOiw' MANUAL. 
 
 HI. Tlu* coiiipaiiy hIuiII not Im* Ixmnd to Kec to tlii- 
 ••xecution of miv tnist. wlictlHT «'Xitn*sK. implied or roii 
 Htnictivc, in rcsiHM-t of any sliaiv; and tlu' iccoipt of tin* 
 Hliaivholdcr in wliosr naiiu* tiu' sanic stands in the hooixs 
 of the company, shall be a valid and bindinj,' discharge 
 to the company for any <lividend or money payable in 
 respect of such share, and whether or not notice of such 
 trust has been j^iveu to the c(unpany; and the comiKiny 
 shall not be bound to see to the ai»i»lication of the money 
 paid upon such receipt. 
 
 53. Every director of the company, and his heirs, 
 executors and administrators, and estate and ettects, re- 
 speitively, may, with the cous<'nt of the company, {^iveu 
 at any {ieneral meetinj; theietd". from time to time, and 
 at all times be indemnitied and saved harmless out of 
 the funds of the company, from and aj^ainst all costs. 
 «harji:es and expenses whatsoever which he sustains or 
 incurs in or about any action, suit or prweedin^ which 
 is brought, commenced or pro8«'cuted ajj;ainst him. for 
 (»r in respect of any act, deed, matter or thinj; whatso 
 ever, made, done or permitted by him, in or about the 
 execution of the duties o^f his otticc; and also from and 
 a;iainst all other costs, charjics and expenses which he 
 sustains or incurs, in or about, or in relation to the af 
 fairs thereof — except such costs, charjies or expenses as 
 are occasioned by his own wilful iiej-lect or default. 
 
 SJ{. The charter of the company shall be forfeited 
 by non-u.ser during three consecutive years, or if the 
 comjiany does not fjo into actual operation within thr«'e 
 years after it is {^ranted. 
 
 54. The Governor in Council may, from time to 
 time, establish, alter and r«,'j,'ulate the tariff of the fees 
 lo be paid on application for letters patent and supjde 
 mentary letters patent under this Act, may designate 
 the department or dei)artments through which the issue 
 thereof shall take place, and may prescribe the forms of 
 proceeding and registration in respect thereof, and all 
 other matters reeuisite for carrying out the objects oi" 
 this Act. 
 
 I ? ( 
 
 t 
 
DOMINION ACT. 
 
 28t.'> 
 
 2. The amount of tlic fees may be varied aceordiii},' 
 to the iiat\iie of the ((MJipany, the amount of the eaiatal 
 Htoek and other iiat'tieuhiiH u» the (Jovernor in (U)uuiil 
 IhiukH tit. 
 
 :{. No steps shall be lalcen in any depailnient to 
 wards t]ie issue of any letters |»atent or supplementary 
 letters i>atent >inde.- this Act. until after all fees there- 
 for are duly paid. 
 
 ^*.l. The direct (US ()f every conj|NUiy shall lay be- 
 fore its shareh(>lders a full printed statement of the af- 
 fairs and financial position of the company at or before 
 each general meetinfj of the company f(»r the election «>f 
 directors. 
 
 Amount of 
 feea iii»y Ix* 
 varied. 
 
 Must he 
 Iiai(ll>ofore 
 action is 
 lak«n. 
 
 Kull Hlate- 
 niont of 
 HtTali'H at 
 each moot- 
 ing for olec- 
 
 tJOIlH. 
 
 SCHEDULE. 
 
 Ik^RM a. 
 
 Public notice is hereby given that under " The Com- 
 /Kinics' Act," letters patent have been issued under the 
 Great Seal of Canada bearing date the day of 
 
 incorporating [here state names, address and 
 'filing of each corporator named in the letters patent\, 
 tor the purpose of [Itere state the undertakinfj of the 
 Company, as set forth in the letters 2^('tent], by tlie name 
 of [here state the name of the Company as in the letters 
 pidcnt], with a total capital stock of dollars, 
 
 divided into shares of dollars. 
 
 Dated at the ottice of the Secretary of State of Can- 
 ada, this day of IS . 
 
 A. B. 
 
 Secretary. 
 
284 
 
 HHAREHOLDI da' AND DIREOTOUS' MANUAL. 
 
 |l ( 
 
 rOEM B. 
 
 I'ublic Dotice is hereby ^iven, that under '• Thr Com- 
 ptniien' Act,'' wuppleineiitary letterH patent have been 
 issued under the (Jreat Seal of <'anada, bearing^ date tht 
 day of , whereby the undertaking of the 
 
 Company has been extended to include [here set out tlu 
 othtr purposes or objects mentioned in the supplementary 
 letters patent.'\ 
 
 Dated at the ottice of the Se' *iry of State of Can- 
 ada this day of . 
 
 A. B. 
 
 Secretary. 
 
 rORM 0. 
 
 Public notice is hereby given, that under '* The Com' 
 panics' Act,'' supplementary letters patent have been 
 issued under the Great Heal of Canada, bearing date the 
 day of whereby the total capital 
 
 stock of {here state the name of Vie Company'] is in- 
 creased [or reduced, as the case may he] from 
 dollars to dollars. 
 
 I>ated at the office of the Secretary of State of Can 
 ada this day of 18 . 
 
 A. B. 
 
 Secretary. 
 
CHAPTER •>:. 
 
 [AHsented to :iOth June, 1897.] 
 
 • •... 
 
 All Act to Aiuencl the Compuuies' Act. 
 
 T f ER Majesty, by and with the consent ot the Senate proambie. 
 J--*- and House of Conunons of Canada, enacts as 
 follows: — - • 
 
 1. Section 37 of The Companies Act is herebj' k.b.c, c. 
 amended by btriking out the following words nt the endam'tudei 
 thereof. "But the limitation made by this section shall from'rV" 
 not apply to commercial paper discounted by the ( ^oni- of"borrow- 
 l)any " ; — and by substituting therefor tlie followir'j;'"^'^''*"""" 
 words : — " Provided alwa^'s, that the limitations and re- 
 strictions on the borrowing powers of the Company con- 
 tained in this section shall not ai)ply to or include moneys 
 Ixu'rowed by the company on bills of exchange or promis- 
 
 s(»ry notes drawn, made, accepted, or indorsed by the . 
 ('ompany." ., . 
 
 2. This Act shall be read as part of TJte Ct)7)ipfnn'<?8*Ai>i)iioa 
 Act, and the provisions hereof shall apply and extend to amend- 
 all e:;isting companies to which the provisions of Tlic 
 Companieii Act are ai)plicable. 
 
M 
 
 QUEBEC ACT. 
 
 Revised Statutes, Quebec, 1888. 
 title xi., chapter iii. 
 
 SECTION II. 
 
 INCORPORATION OF JOINT STOCK COMPANIES. 
 
 § 1. Declaratory and Interpretative. 
 
 469)4. This section may be cited as " The Joint Stock Companies' 
 Incorporation Act." 
 
 4<tO<S'« The following expressions, in this section and in all letters- 
 patent and supplementary letters- patent issued under the sa^ie, have 
 the meanings hereby assigned to them, unless there is something in the 
 subject or context repugnant to such construction : 
 
 1. The expression letters-patent" means the letters-patent incor- 
 porating a company for any purpose contemplated by this section ; 
 
 2. The expression " supplementary letters-patent " means any let- 
 ters patent granted for the increasing or reducing of the capital stock of 
 such company, or for changing its name ; 
 
 3. The expression "company " means the company so incorporated 
 by letters-patent ; 
 
 4. The expression "the undertaking" means the whole of the 
 works and business of every kind, which the company is authorized to 
 carry on ; 
 
 5. Ths expression " real estate " or " land " includes all immovable 
 property of every kind ; 
 
 (5. The expression "shareholder" or "stockholder" means every 
 subscriber to or holder of stock in the company, and extends to id 
 comprises the personal representatives of the shareholder. 
 
 §2. Granting of the Charter. 
 
 4606t The Lieutenant-Governor may, by letters-patent under the 
 Great Seal, grant a charter to any number of persons, not less than five, 
 who petition therefor. 
 
QUEBEC ACT. 
 
 287 
 
 es 
 
 rs- 
 ive 
 he 
 
 or- 
 
 et- 
 of 
 
 ;ed 
 
 ;he 
 to 
 
 ble 
 
 r-ry 
 
 id 
 
 he 
 ve, 
 
 Such charter constitutes the petitioners and all others who may 
 become shareholders in the company thereby created a body politic and 
 corporate for any of the purposes within the jurisdiction of this Legisla- 
 ture, except for the construction and working of railways and the busi- 
 ness of insurance. 
 
 2. It is not necessary that an order in council be passed for granting 
 any such charter, but the Lieutenant-Governor may grant any charter 
 upon a favourable report from the Attorney-General. 
 
 4697« The applicants for such letters-patent shall previously give 
 notice of their intention to make such application. 
 
 Such notice shall be published during four consecutive weeks in the 
 Quebec Official Gazette and contain : 
 
 1. The corporate name of the proposed company, which shall not be 
 that of any other company, or any name liable to be confounded there- 
 with or otherwise on public grounds objectionable ; 
 
 2. The object for which the incorp jration is sought ; 
 
 3. The pUce, within the limits of the Province, selected as its chief 
 \AaLce of business ; 
 
 4. The proposed amount of its capital stock ; 
 
 6. The number of shares and amount of each share ; 
 
 6. The nams in full and the address and calling of each of the 
 applicants, with special mention of the names of not less than three or 
 more than nine of their number who are to be the first directors of the 
 company. 
 
 The major part of such directors shall be resident in Canada and be 
 subjects of Her Majesty. 
 
 ■4608« At any time not more than one month after the last publi- 
 cation of such notice, the applicants may petition the Lieutenant- 
 Governor through the Provincial Secretary for the issue of such letters- 
 patent. 
 
 2. Such petition must recite the facts set forth in the notice, and 
 must further state the amount of stock taken by each applicant, and by 
 all other persons therein named, and also the amount paid in upon the 
 stock of each applicant, and the manner in which the same has been 
 paid in, and is held for the company. 
 
 3 The aggregate of the stock so taken must be at least one-half of 
 the total amount of the stock of the company. 
 
 4. The aggregate so paid in thereon must be at least ten per cent, 
 thereof, or five per cent, of the total capital; unless such total exceed 
 five hundred thousand dollars, in which case the aggregate paid in upon 
 such excess must be at least two per cent, thereof. 
 
 5. Such aggregate must have been paid in to the credit of the com- 
 pany or of trustees therefor, and must be standing at such credit, in 
 
•289: 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 [til 
 
 m 
 
 n 
 
 some chartered bank within the Province, unless the object of the 
 company is one requiring that it should own real estate, in which case- 
 not more than one-half thereof may be taken as invested in real estate 
 suitable to such object, (July held by trustees therefor, and being fully of 
 the required value over and above all incumbrances thereon. 
 
 6. The petition m&y ask the embodying in the letters-patent of .any 
 provision which otherwise under this section might be embodied in any 
 by-law of the company when incorporated. 
 
 4690. Before the letters-patent are issued, the applicants must 
 establish to the satisfaction of the Provincial Secretary or of such other 
 officer as may be charged by order of the Lieutenant-Governor in 
 Council to report thereon, the sufficiency of their notice and petition, the 
 truth and sufficiency of the facts therein set forth, and further that the 
 applicants, and more especially the provisional directors named; are 
 persons of sufficiently reputed means to warrant the application. ' 
 
 '2. To that end, the secretary or such other officer may take and keep 
 of record any requisite evidence in writing under oath or affirmation, 
 and may administer every requisite oath or affirmation. 
 
 4700- The lettars-patent shall recite all the material averments of 
 the notice and petition^ as so established. 
 
 4701. The Lieutenant-Governor may, if he deem it expedient, give 
 to the company a name different to that chosen for it by the applicants, 
 if such name be objectionable, and may prescribe that the objects for 
 which the company is cc ited be changed, provided that they be of 
 
 the same nature as that i in the notice. 
 
 4703. If it happens that the name of a company, constituted as 
 aforesaid, is the same as that of any other existing company, or so nearly 
 resembles it as to be liable to create confusion, the Lieutenant-Governor 
 may order the issue of supplementary letters-patent to change the name 
 to another to be chosen. 
 
 Such supplementary letters-patent shall refer to the former letters 
 patent. 
 
 Such change of name shall not affect the rights or obligations of the 
 company. 
 
 4703- Whenever a company, incorporated under this section, 
 desires to have its name changed for another, the Lieutenant-Governor 
 may, on petition to that effect, grant supplementary letters patent, if he 
 deem that such change of name is not made for some unavowed or 
 illegitimate purpose ; which letters patent shall be made in the manner 
 provided in the preceding article, and shall have the same effect to all 
 intents and purposes. 
 
 4704. Notice of the granting of the letters patent shall be forthwith 
 given by the Provincial Secretary, in the Quebec Official Gazette, in the 
 form of the schedule A of this section ; and thereupon, from the date 
 
j; 
 
 QUEBEC ACT. 
 
 289 
 
 of the letters-patent, the persona therein named and their Buccessora 
 shall be a body corporate and politic by the name mentioned therein. 
 
 § 3. General Poicem. 
 
 4705. Every company so incorporated may acquire, hold, alienate 
 and convey, any real estate requisite for the carrying on of its under- 
 taking, and shall forthwith become and be invested with all rights, real 
 and personal, theretofore held by or for it under any trust created with 
 a view to its incorporation, and with all the powers, privileges and 
 immunities requisite to the carrying on of its undertaking, as though, 
 incorporated by a charter from the Legislature, making it by that name 
 a body politic and corporate, and embodying all the provisions of thia 
 section and of the letters-patent. 
 
 The company mc /, by a simple resolution, issue notes, payable to 
 order or to bearer, for t"ie settlement of accounts or other current matters ; 
 it may further, on a resolution of the two-thirds of the actual share- 
 holders present at a meeting specially convened for the purpose, issue 
 bonds or debentures to the amount of the two-thirds of the total value 
 of the immovable property. 
 
 Such bonds or debentures, after their registration in the office or 
 offices of the registration division or divisions in which the inimovablea 
 of the said company are situated (which must be described in a notice to 
 that effect given to the registrar), constitute a privileged claim in favour 
 of the holders thereof against the company, and give a right of preference 
 over all other debts and claims against the company, posterior to the 
 issuing of such debentures. This and preceding paragraph enacted by 54 
 V. c. 35, g. I. 
 
 4706. The directors of the company may, if they see fit, at any time 
 after the whole capital stock of the company has beer' allotted and paid 
 in, but not sooner, make a bylaw for increasing the capital stock of thfe 
 company to any amount which they may consider requisite in order to 
 the due carryiiig out of the objects of the company. 
 
 2. Such by-law shall declare the number and value of the shares of 
 the new stock, and prescribe the manner in which the same shall be 
 allotted ; in default of its so doing, the control of such allotment shall be 
 held to vest absolutely in the directors, 
 
 4707. The directors of the company, if they see fit at any time, 
 may make a by-law for decreasing the capital stock of the company to 
 any amount which they may consider sufficient in order to the due car- 
 rying out of the undertaking of the company, and advisable. 
 
 2. Such by law shall declare the number and value of the shares of 
 the stock as so decreased, and the allotment thereof, or the rules by 
 which the same shall be made. 
 
 W.S.D.M. — 19 
 
|-*'-»^-it«Ww-4, 
 
 
 " 
 
 200 KTIAHEHOLDEKS' AND DTRECTOHS' MANUAL. 
 
 470N. But no by-law for incroasinc or decreasinf,' tlie capital stock 
 of the company shall have any force or effect whatever, nntil after it has 
 been sanctioned by a vote of not less than two-thirds in amount of the 
 shareholders at a j^eneral nieetinf^ of the company duly called for con- 
 siderinf,' the same, and has afterwards been confirmed by su»-plementary 
 letters-patent. 
 
 4700. At any time, not more than six months after snch sanction 
 of such by-law, the directors may petition the Lieutenant-Governor 
 through Ine Provincial Secretary, for the issue of supplementary letters- 
 patent to confirm the same. 
 
 2. With snch petition they must produce such by-law, and estab- 
 lish, to the satisfaction of the Secretary or of such other oflicer as may 
 be charged by order of the Lieutenant-Governor in Council to report 
 thereon, the due passage and sanction of such by-law, and the bona Jiih- 
 character of the increase or decrease of capital thereby provided for. 
 
 3. To that end the Secretary or such officer may take and keep of 
 record any requisite evidence in writing under oath or affirmation, and 
 may administer every requisite oath or affirmation. ,, 
 
 4710. Upon due proof so made, the Lieutenant-Governor may 
 grant such supplementary letters-patent under the Great Seal ; and 
 notice thereof shall be forthwith given by the Provincial Secretary in 
 the Quebec Official Gazette, in the form of the schedule B of this section. 
 
 2. From the date of the supplementary letters-patent, the capital 
 stock of the company shall be and remain increased, or decreased, as the 
 case may be, to the amount, in the manner, and subject to the conditions 
 set forth by such by-law; and the whole of the stock, as so increased or 
 decreased, shall become subject to the provisions of this section, in like 
 manner (so far as may be) as though everv part thereof had formed part 
 of the stock of the company originally subscribed. 
 
 4711. AH powers given to the company by the letters-patent and 
 supplementary letters-patent granted in its behalf shall bo exercised 
 subject to the provisions and restrictions contained in this section. 
 
 § 4. Directors. 
 
 4713. The affairs of the company shall be managed by a board of 
 not less than three, or more than nine directors. 
 
 The persons named as such in the letters patent shall be the direc- 
 tors of the company, until replaced by others duly named in their stead. 
 
 471«t. No person shall be elected or named as a director thereafter, 
 unless he be a shareholder, owning stock absolutely in his own right, and 
 not in arrear in respect of any call thereon. 
 
 The major part of the after-directors of the company shall further, 
 at all times, be persons resident in Canada and subjects of Her Majesty 
 by birth or naturalization. 
 
QUKHEC ACT. 
 
 2m 
 
 '171S. (") The company may, by by-law, increaae to not more tlian 
 nine or decrease to not less than three the number of itH directors, or 
 may change the company's chief phice of business in the Province; but 
 no bylaw for either of the said purposes shall be valid or acted upon, 
 unless it is approved by a vote of at least two-thirds in value of the stock 
 represented by the shareholders present at a special ^jeneral meetinj^ duly 
 called for con8iderin<,' the by-law, nor until a copy of such by-law, certi- 
 fied under the seal of the company, has been deposited with the Provincial 
 Secretary and publ'shed in the Quebec Ojlicial Gazettt: This section 
 enacted by 58 V. c. 37, s. 3. 
 
 4711. The after-directors shall be elected by the shareholders, in 
 {general meetin{4 of the company assembled, at such times, in such wise, 
 and for such term, not exceedinf^ two years, as the letters-patent, or, in 
 default thereof, the by-laws of the company may prescribe. 
 
 4715- In default only of other express provisions in such behalf, 
 by the letters-patent or by-laws of the company : 
 
 1. Such election shall take place yearly, all the members of the 
 board retiring, and, if otherwise (jualified, being eligible for re-election ; 
 
 2. Notice of the time and place for holding general meetings shall be 
 given at least ten days previously thereto, in some newspaper published 
 at or as near as may be to the office or chief place of business of the 
 company ; 
 
 3. At all general meetings, every shareholder shall be entitled to as 
 many votes as he owns shares in the company, and may vote by proxy ; 
 
 4. Elections of directors shall be by ballot ; 
 
 5. Vacancies occurring in the board of directors may be filled for the 
 unexpired remainder of the term, by the board, from among the (lualified 
 shareholders ; 
 
 6. The directors shall from time to time elect from among them- 
 selves a president ; and shall also name, and may remove at pleasure, all 
 other officers of the company. 
 
 4716. If at any time an election of directors be not made or do not 
 take effect at the proper time, the company shall not be held to be there- 
 by dissolved ; but such election may take place at any general meeting 
 duly called for that purpose ; and the retiring directors shall continue in 
 office until their successors are elected. 
 
 4717. The directors have full power in all things to administer the 
 affairs of the company, and may make or cause to be made for it any 
 description of contract which the company may lawfully enter into ; and 
 may from time to time make by-laws not contrary to law, or to the 
 letters-patent of the comj)any, to regulate : 
 
 1. The allotment of stock ; 
 
 "2. The making of calls thereon ; 
 
 3. The payment of calls ; 
 
r''*w^ 
 
 il 
 
 ': 
 
 292 
 
 SHAREHOI.DEP.S' AND DIKECTORS' MANUAL 
 
 4. The issue and registration of certificates of stock ; 
 
 5. The forfeiture of stock for non-payment ; 
 
 6. The disposal of forfeited stock and of the proceeds thereof ; 
 
 7. The transfer of stock ; 
 
 8. The declaration and payment of dividends ; 
 
 9. The number of directors and their term of office ; 
 
 10. The amount of their stock qualification ; 
 
 11. The appointment, functions, duties and removal of all agents, 
 officers and servants of the company ; 
 
 12. The security to be given by them to the company ; 
 
 13. Their remuneration and that of the dirti lurs ii! they have a 
 right thereto ; 
 
 14. The time at which and the place within this Province where tlie 
 annual meetings of the company shall be held, and the places where its 
 business shall be conducted ; 
 
 15. The calling of meetings, regular and special, of the board of 
 directors and of the company ; 
 
 16. The quorum ; 
 
 17. The requirement as to proxies, and the procedure in all things 
 at such meetings, the imposition and recovery of all penalties and for- 
 feitures admitting of regulation by by-law, and the conduct in all other 
 particulars of the affairs of the company. 
 
 They may also, from time to time, repeal, amend or re-enact such 
 by-lawB. 
 
 Every such by-law, and every repeal, amendment or re-enactment 
 thereof, unless in the meantime confirmed at a general meeting of the 
 company duly called for that purpose, shall only have force until the 
 next annual meeting of the company, and in default of confirmation 
 thereat, shall, from that time only, cease to have force. 
 
 4718. A copy of any by-law of the company, under its seal and 
 purporting to be signed by any officer of the company, shall be received 
 as primd facie evidence of such by-law iu all courts of justice in this 
 Province. 
 
 4710. No loan shall be made by the company to any shareholder, 
 and if such be made, all directors and other officers of the company mak- 
 ing the same, or in any wise assenting thereto, shall be jointly and sever- 
 ally liable for all debts of the company contracted from the time of the 
 making of such loan to that of the repayment thereof, towards the com- 
 pany for the amount of such loan, and also towards third parties, to the 
 extent of such loan with legal interest. 
 
 4720. The directors shall be jointly and severally liable to the 
 laborers, servants and apprentices of the company for all debts, not 
 exceeding one year's wages, due for services performed for the company 
 whilst they are such directors, respectively ; but no director shall be 
 
QUEBEC ACT. 
 
 293 
 
 liable to an action therefor, unless the company has been sued therefor 
 within one year after the debt became due, nor yet unless such director 
 is sued therefor within one year ^rom the time when he ceased to be 
 such director, nor yet before an execution against the company has been 
 returned unsatisfied in whole or part. 
 
 The amount due on such execution shall b« the amount recoverable 
 with costs against the directors. 
 
 § 5. Shareholders, Shares and Calls. 
 
 4731. One-fourth part in value of the shareholders of the company 
 has, at all times, the right to call a special meeting thereof, for the 
 transaction of any business specified in such written requisition and 
 notice as they may issue to that effect. 
 
 47S3. The capital stock of all joint stock companies shall consist 
 of that portion of the amount authorized by the charter, which shall 
 have been bond fide subscribed for and allotted, and shall be paid in cash. 
 
 The amount of paid-up capital, from year to year, shall be pub- 
 lished annually in a report of the shareholders of the Company. 
 
 2. The property accounts of a company shall represent only the 
 amount of the actual bona fide outlay necesgary for the undertaking. 
 
 No stock shall be issued to represent the increased value of any 
 property. 
 
 Any such issue shall be null and void. 
 
 3. The practice, commonly known as watering of stock, is prohibited, 
 and all stock so issued shall be null and void. 
 
 4. The capitalization rf surplus earnings, and the issue of stock to 
 represent such capitali/od surplus an also prohibited, and all stock so 
 issued shall be null and void, and tlie directors consenting .o such issue 
 of stock shall be jointly and severally liable to the holders thereof for tie 
 reimbursement of the amount paid for such stock. 
 
 5. Every form and manner of fictitious capitalization of stock in 
 any joint stock company, or the issuing of stock which is not represented 
 by a legitimate and necessary expenditure in the interest of such com- 
 pany, and not represented by an amount in cash paid into the treasury 
 of the company, which has been expended for the promotion of tho 
 objects of the company, is prohibited, and all such stock shall be null 
 and void. 
 
 472JI. The stock of the company is deemed to be personal estate, 
 and shall be transferable, in such manner only, and sub ject to all such 
 conditions and restrictions, as by this section or by the letters-patent, or 
 the bylaws of the company, shall be prescribed. 
 
 4'7!84. If the letters-patent make no other definite provisions, the 
 stock of the company, so far as the same is not allotted thereby, shall be 
 allotted when and as the directors, by by-law or otherwise, may ordain. 
 
r*".' 
 
 294 
 
 SIIAItKIHU.DKUS AND I>l lUCCTOHS MANl'AI,. 
 
 dTSti. Tlio directors may call in and demand from the sliareholdorK 
 all siuuB of money by thora Hubscril^ed, at hucIi times and places, and in 
 Bucli payments or instalmentR, as tlip letters patent, or this section, or 
 tlie by-laws of the company, may require or allow. 
 
 Interest shall accrue and fall due, at the rate of six per cent, per 
 annum, upon the amount of any unpaid call, from the day ajipointed for 
 the payment of such call. 
 
 473A. Not leas than ten per cent, upon the allotted stock of 
 the company shall, by means of one or more calls, be called in and made 
 payable within one year from the incorporation of the company. 
 
 For every year thereafter, at least a further live per cent, shall in 
 like manner be called in and made payable, until one-half has been so 
 called in. 
 
 4737. The company may enforce payment of all calls and interest 
 thereon, by action in any competent court; and in such action it shall 
 not be necessary to set forth the special matter, but it shall be sufficient 
 to declare that the defendant is a holder of one share or more, statintj 
 the number of shares, and is indebted in the sum of money to which the 
 calls in arrear amount, in respect of one call or more upon one share or 
 more, stating the number of calls and the amount of each, whereby an 
 action has aoo>-ued to the company. 
 
 A certificate under the seal of the company, and purporting to bo 
 signed by i; v of its officers, to the effect that the defendant is a share- 
 holder, that such calls have been made, and that so much is due by him 
 thereon, shall be received in all courts aa priind facie evidence to that effect 
 
 4T28. If, after such demand or notice as by the letters-patent or 
 by-laws of the company may be prescribed, any call made upon any 
 share or shares be not paid within the time prescribed by the letters- 
 patent or by-la ws, the directors, in their discretion, by vote to that effect, 
 reciting the facts and duly recorded in their minutes, may summarily 
 declare forfeited any shares whereon such payment is not made; and 
 the same shall thereupon become the property of the company, and may 
 be disposed of as by by-law or otherwise they shall oi'dain. 
 
 4720. No share shall be transferable until the previous calls there- 
 on have been fully paid in or until declared forfeited for non-payment 
 of calls thereon, or sold under execution. 
 
 47tt0. No shareholder in arrear in respect of any call shall be 
 untitled to vote at any meeting of the company. 
 
 47*11. Each shareholder, until the whole amount of his stock has 
 been paid up, shall be personally liable to the creditors of the company, 
 to an amount equal to that not paid up thereon ; but he shall not be 
 liable to an action therefor by any creditors, before an execution against 
 the company has been returned unsatisfied in whole or in part ; and the 
 amount due on such execution shall be the amount recoverable, with 
 costs, against such shareholder. 
 
qup:bec act. 
 
 29') 
 
 't7ltZ. The H)iareholderB Hhall not as bucIi bo held reRponsiblo for 
 any act, default or liability whatever, of the company, or for any en(<a^o- 
 meiit, claim, payment, loss, injury, traiiHaction, matter or thinj? what- 
 ever, relatint{ to or connected with the company, beyond the amount of 
 their respective shares in the capital stock thereof. 
 
 47!t!t. No person holdinf{ stock in the company in the name of 
 another hIiiiU be personally subject to liability as a shareholder, but the 
 estates and funds in the hands of suuh person, boloM>^int{ to the person he 
 represents, shall be liable in like manner, and to the same extent, as the 
 person represented woidd be, if holding such stock in his own name. 
 
 47JI4. No person holdinj^ stock as collateral security shall be per- 
 sonally subject to such liability, but the person pled^in^ such stock 
 shall be considered as holdin({ the same and shall bo liable as a share- 
 holder accordint^ly. 
 
 4735- Every person holding and possessing shares in tiie name of 
 another shall represent the stock in his hands at all meetings of tha 
 company, and may vote accordingly as a shareholder ; and so with every 
 person who pledges his stock. 
 
 S 0. Diviileiuh. 
 
 4736. No company shall declare a dividend, the payment of which 
 infringes upon or lessens the capital of the company. 
 
 No dividend shall be declared or paid, which has not been actually 
 earned by the company, 
 
 2. The annual dividend may, however, be supplemented or paid 
 entirely out of the reserve fund ; but payment of the dividend in this 
 way must be publicly announced to the shareholders at the annual 
 meeting, and duly authorized by a resolution of the company. 
 
 In default of such resolution, the directors of the company, voting 
 for or consenting to such increase, shall be jointly and severally liable to 
 the creditors of the company for the amount of dividend paid in excess 
 of that actually earned. 
 
 3. Should any dividend be so declared or paid, the directors voting 
 for or consenting to the payment of such dividend shall be jointly and 
 severally liable to the creditors of such company for the amounts so 
 paid. 
 
 ' 4737- The directors, who declare and pay any dividend when the 
 company is insolvent, or any dividend the payment of which renders 
 the company insolvent, or diminishes the capital stock thereof, shall be 
 jointly and severally liable, as well to the company as to the individual 
 shareholders and creditors thereof, for all the then existing debts of the 
 company, and for all thereafter contracted during their continuance in 
 office. 
 
 But if any director present when such dividend is declared do forth- 
 with, or if any director then absent do within twenty-four hours after he 
 shall have become aware thereof and able so to do, enter on the minutes 
 
29G 
 
 SHAUKHOLDKHS AND DFUECTOHS MANUAL. 
 
 of tho board of diieutorH liis protest a^jaiiist the same, and do within 
 ei^ht days thereafter publinh such protest in at leaut one newspaper 
 publiHlicd at, or aa near uh may be possible to, the office or chief place of 
 business of the company, sucii director may thereby, and not otherwise, 
 exonerate liimself from such liability. 
 
 U 7. Books to be kept. 
 
 4738* The company shall cause a book or books to be kept by its 
 secretary, or by some other oflicer specially charfied with that duty, 
 wherein shall be kept correctly recorded : 
 
 1. A copy of the letters-patent incorporatnig the company, of any 
 supplementary letters-patent, and of all the bylaws thceol'; 
 
 2. The names, alphabetically arranged, of all persons who are or 
 have been shareholders ; 
 
 3. The address and calling of every such person while such share- 
 holder ; 
 
 4. The number of shares of stock held by each shareholder ; 
 
 5. The amounts paid in and remaining unpaid on the stock of each 
 shareholder ; 
 
 (j. All transfers of stock in their order, as presented to the company 
 for entry, with the date and other p«>'ticulars of each transfer, and the 
 date of the entry thereof ; and 
 
 7. The names, addresses and calling of all persons who are or have 
 been directors of the company, with the several dates at which each 
 became or ceased to be such director. 
 
 4730. The directors may refuse to allow the entry, into any such 
 book, of any transfer, not made by sale under execution, of stock whereof 
 the whole amount has not been paid in ; and whenever an entry is made 
 in such book of any such transfer of stock not fully paid in, to a person 
 not being of apparently sufficient means, the directors jointly and sever- 
 ally shall be liable to the creditors of the company, in the same manner 
 and to the same extent as the transferring shareholder would have been, 
 but for such entry. 
 
 But if any director, present when such entry is allowed, do forthwith, 
 or if any director then absent do. within twenty-four hours after he shall 
 have become aware thereof, a.id able so to do. enter on the minute book 
 of the board of directors his protest against the same, and do within 
 eight days thereafter publish such protest in at least one newspaper 
 published at or as near as may be possible to the office or chief place of 
 business of the '■ompany, such director may thereby, and not otherwise, 
 exonerate himself from such liability. 
 
 4740. No transfer of stock, unless made by sale under execution, 
 shall be valid for any purpose whatever, sa»"^ only as exhibiting the 
 rights of the parties thereto towards each other, and as rendering the 
 
gi'KBEC ACT. 
 
 297 
 
 trannforee liable ml interim jointly uiid severiilly with the transferor, to 
 the company and thoir creditory until entry thereof has been duly made 
 ill such books. 
 
 4741. Such books shall, durinj^ reasonable business hoars of every 
 (lay, except Sundayp ...id holidays, be kept open for the inspection of 
 sliareholders and creditors of the company, and their representatives at 
 the of!ice or chief place of business of the compHny, 
 
 Every such shareholder and creditor, or their represonte-tives, may 
 make extracts therefrom. 
 
 4748. In any suit or proceeding against the company or against 
 any shareholder, such books shall be primA facie evidence of all facts 
 purportin}^ to be thereby stated. 
 
 47i!t. Kvery director, officer or servant of the company who 
 knowinjily makes or assists in makinf^ any untrue entry in any such 
 book, or who refuses or neglects to make any proper entry therein, or to 
 exhibit the same, or to allow the same to be inspected and extracts to be 
 taken therefrom, shall be liable to a penalty of one hundred dollars for 
 every such untrue entry and for every such refusal or neglect, and also 
 in damages for all loss or injury which any party interested may have 
 sustained thereby. 
 
 4744. Every company neglecting to keep such books opeu for 
 inspection shall forfeit its corporate rights. 
 
 ji 8. TnistK, Contracts, etc. 
 
 4745* The coil oany is not bound to see to the execution of any 
 trust, whether express, implied or constructive, in respect of any shares. 
 
 The receipt of the shareholder in whose name the same may stand in 
 the books of the company is a valid and binding discharge to the com- 
 pany for any dividend or money payable in respect of such shares, and 
 whether or not notice of such trust has been given to the company. 
 
 The company is not bound to see to the application oZ *be money 
 paid upon such receipt. 
 
 474<l. Every contract, agreement, engagement or bargain made, 
 and every bill of exchange drawn, accepted or endorsed, and every 
 promissory note and cheque made, drawn or endorsed, on behalf of the 
 company, by any agent, officer or servant of the company, in general 
 accordance with his powers as such under the by-laws, shall be binding 
 upon the company. 
 
 In no case shall it be necessary to have the seal of the company 
 affixed to any such contract, agreement, en;mgement, bargain, bill of 
 exchange, promissory note or cheque, or to prove that the same was 
 made, drawn, accepted or endorsed, as the case may be, in pursuance of 
 any by-law, or special vote or order. 
 
 The party so acting as agent, officer or servant of the company, 
 shall not thereby be subjected personally to any liability whatever to any 
 third party therefor. 
 
 w.s.D.M. — 19a 
 
I 
 
 I 
 
 298 
 
 sirAi<i:H()rj)Kii,s and diukctous manual. 
 
 Provided alwayn, tlmt notliiii;^ in tliin arti(;le Hhall bo construed to 
 authori/o tlio company to isHue any note payable to the bearer thereof, 
 or any promisHory note intended to bo circulated as money, or as the note 
 of a bank. 
 
 47-17. No company ahall use any of its funda in tlio purchase of 
 stock in any other corporation, unless in so far as such purchase may bo 
 specially authorized by its charter and also by the charter of such other 
 corporation. 
 
 § 9. Suits. 
 
 4748. Any description of action may be pro8ec'.:ted and main- 
 tained between the company and any shareholder thereof. 
 
 2. No shareholder, not bein<{ himself a party to such suit, shall be 
 incompetent as a witness therein. 
 
 3. Service of all manner of summons or proceedings whatever upon 
 the company may be made by leavinj^ a copy thereof at the oftico or 
 chief place of business of the company, with any f^rown person in chart?e 
 thereof, or elsewhere with the president and secretary thereof ; or if the 
 company have no known office or chief place of business, or have no 
 known president or secretary, then, upon return to that effect duly made, 
 the court or judj^e orders Huch publication as it may deem requisite to 
 be made in the premises, for at least one month, in at least one news- 
 paper. 
 
 Such publication shall be held to be due service upon the company. 
 
 4740. In any action or any other legal proceeding, it shall not be 
 requisite to set forth the mode of incorporation of the company, other- 
 wise tl an by mention of it under its corporate name, as incorporated by 
 virtue -*' letters-patent or of letters-patent and supplementary letters- 
 patent, as the case may be, under this section ; and the notice in the 
 Quebec Ul/ktal Gazette of the issue thereof shall be primd facie proof of 
 all thirgs thereby declared. 
 
 On production of the letters- patent or supplementary letters-patent 
 themsftlves, or of any exemplification or copy thereof under the Great 
 Seal, the fact of such notice shall be presumed ; and, save only in any 
 proceeding, by scire jar/as or otherwise, for direct impeachment thereof, 
 the letters-patent or supplementary letters-patent themselves, or any 
 exemplification or copy thereof under the Great Seal, shall be conclusive 
 proof of every matter and thing therein set forth. 
 
 § 10. Miscellaneous. 
 
 4750. The charter of the company shall be forfeited by non-user 
 during three consecutive years at any one time, or if the company do 
 not go into actual operation within three years after it is granted ; and 
 no declaration of such forfeiture by any act of the Legislature shall be 
 deemed an infringement of such charter. 
 
 4751. The company shall be subject to such further and other 
 provisions as the Legislature may hereafter deem expedient to enact. 
 
(^UEHKC ACT. 
 
 2m 
 
 ITttS* The Lientoiiftnt-Governor in Council may from time to tim«« 
 cstabliHli, iiltor, nnd rc^iilatu the tariff of fees to bo paid on applicutiouM 
 for letters-patent and supplementary letters-patent under this section, 
 may designate the department or departmontH through \vhi(;h tlie isHue 
 tlicreof sliall take place, and may prescribe the forma of proceodinjj 
 and record in respect thereof, and all other matters requisite for carry- 
 ing out the objects of this section. 
 
 '2. Such fees may be made to vary in amount, um'er any rule or 
 rules as to the nature of tlu company, amoi <t of capital, and otherwise, 
 that may be deemed expedient 
 
 3. No step shall be taken in any department towards the issue of 
 any ictterspatent or Hiipplcmoiitary letters patent under this section, 
 until after the amount of all fees therefor shall have been duly paid. 
 
 Secrktaiiy'b Office, 
 
 Quebec, /ith December, 1892. 
 
 Ilia Honor the Lieutenant Governor has been pleased, by Order in 
 Council, dated the Urd of December instant, to amend Ordei- in (!onnc,il 
 No. '20;), of tile '27th of April last, concerning' the tariff of foes of the 
 Provincial Secretary and Ue^istrar, by strikinj,' out Article '2(i, and 
 replaciuf^ the wiioie of Articles 17, IH, i;», '20 and '21, by the following : 
 
 17. On letters patent incorporating,' joint stock com- 
 panies, when ♦^lie capital stock is ft 500,000 or over, 
 
 the fee will be »'2U0 00 
 
 18. When the proposed capital stock is ft'2(i0,00(( or 
 
 over, but under W»).Om 150 00 
 
 10. When the proposed capital stock is ftl00,0<»0or 
 
 over, but under *'20O,00(» 100 (M> 
 
 '20. When the proposed ca))ital stock is under $100,000 50 00 
 
 '21. On applications for supplementary letters patent, other than 
 those for increasinfj capital stock, the fee will be one-half of 
 the amount payable on the orij^inal letters-patent. 
 
 When application is made for an increase of capital stock, the fee 
 will be calculated on the actual amount of the increase of such capital 
 stock, and will be the same as th&i. payable on original letters-patent for 
 an amount equal to such increase. 
 
 LOUIS P. PELLETIER, ' 
 
 Provincial Secretary. 
 
 475JI. No biH for incorpo'-ating a company for any of the purposes 
 set forth in article 4ti!)G. or for increasiuf.^ or decreasinj^ the capital stoc^ 
 of any such company, or for chantiinf^ its name, sliall be introduced or 
 proceeded with, either in the Lcfjislative Council or in the Legislative 
 Assembly, until there has been paid in, to the credit of the Treasurer, 
 for the public uses of the Province, over and above "diatever may be 
 required to be paid by way of fee or for printin<{ or otherwise, under the 
 rules of the Legislative Council or Legislative Assembly, a sum equal 
 to what would have to be paid under the order or orders in council 
 in force upon letters patent or supplementary letters-patent, as the case 
 may be, if the privileges sought by means of such bill were sought by 
 means of letters-patent or supplementary letters-patent under this 
 section. 
 
300 
 
 SIIAKEllOLnEUS AND DIUECToH.S MANUAL. 
 
 2. Should such bill fail to become law, so much only of such amount, 
 not exceeding one-third thereof, as may be remitted by joint resolution 
 of the Legislative Council and Legislative Assembly, may be repaid to 
 the depositor. 
 
 3. Should such bill be so amended as to make the amount payable 
 therefor as amended, other than what was so payable therefor as intro- 
 tluced, any excess of i)ayinent shall be repaid or any required further 
 payment made good, as the case may be. 
 
 4. No such bill shall be presented for sanction to the Lieutenant- 
 Governor, unless there is endorsed thereon a certiticato by the clerks of 
 the Legislative Council and Legislative Assembly respectively, that they 
 are officially assured of the fact that all payments hereby exigible, have 
 been duly made upon the bill. 
 
 FORM A. 
 
 Public notice is hereby given that, under the Joint Stock Companies' 
 Incorporation Act, letters-patent have been issued under the Great Seal 
 of the Province of Quebec, bearing date the day of , 
 
 incorporating (here state names, addi-L'ss and calling, of each corporator 
 named in the letters-patent), for the purpose of (here state the uiidertaking 
 of the covrpany, as set jorth in the letters patent), by the name of [here state 
 name of company, as in the letters-patent' , with a total capital stock of 
 dollars divided into shares of dollars each. 
 
 Dated at the office of the Secretary of the Province of Quebec, 
 this day of 
 
 A. B.. 
 
 Provincial Secretary. 
 
 FORM B. 
 
 Public notice is hereby given that, under the Joint Stock Companies' 
 Incorporation Act, supplementary letters-patent have been this day 
 issued under the Great Seal of the Province of Quebf j, bearing date the 
 day of , whereby the total capital stock of {here state 
 
 the name of the company) is increased {or decreased, as the case may he) 
 from dollars to dollars (or whereby the name of the 
 
 said company has been changed to that of ) 
 
 Dated at the office of the Secretary of the Province of Quebec, this 
 day of 
 
 A. B., 
 Provincial Secretary. 
 
t^UEHEC ACT. 
 
 801 
 
 SECTION III. 
 
 UKCLARATION TO ItE MADU IIY INOOUPORATEIJ COMl'ANIEH. 
 
 4754. P^very incorporated company, carrying,' on any labour, tradi; 
 or business in this Province (except banks) sliall cause to be delivered to 
 the prothonotary of the Superior Court in each district, or to the re{,'i8- 
 trar of each registration division in which it carries on, or intends to 
 carry on, its operations or business, a declaration in writing to the effect 
 hereinafter provided, made and signed by the president, when its chief 
 oflice or principal place of business is in this Province, or by the prin- 
 cipal manager or chief agent in the Province when it has only branches 
 or agencies therein. 
 
 2. Sucu declaration shall state the name of the company, where and 
 how it was incorporated, the date of its incorporation, and where its 
 principal place of business within the Province is situated. 
 
 8. Such declaration shall be in the form or to the effect of form A 
 of this s?ction, and shall be produced by the president or the principal 
 manager or chief agent, as the case may be, of every such incorporated 
 company, and filed within sixty days after commencing operations and 
 business. 
 
 4. When and so often as any change takes place in the name of the 
 company, or in its principal place of business in the Province, a declara- 
 tion thereof shall in like manner be made, within sixty days from such 
 change. 
 
 4735. The prothonotary and the registrar shall enter such declaia- 
 iiion in the books kept by tliem respectively fur the registration of 
 declarations of partnerships. 
 
 4750. The prothonotavy and the registrar shall be entitled to a 
 fee of one dollar for the entry of every declaration made under the 
 authority of this section. 
 
 4757. A failure to make and file the declarations required by 
 article 4754 renders each of the incori)orated companies above mentioned 
 liable to a fine of four hundred dollars, and the president, principal man- 
 ager, or chief agent, as the case may be, to a fine of two hundred dollars. 
 
 475H. Should the declaration be made and filed after the expiration 
 of the sixty days above mentioned and before any suit for a contravention 
 o* this section has been instituted, then the company making and filing 
 Fuch declaration, its president, principal manager or ciiief agent, as the 
 case may be, shall no longer be deemed to have been in default. 
 
 475©. The fines impose d by this section are recoverable, before any 
 court having jurisdiction in civil cases to the amount of such fine, by any 
 person suing as well in his own name as in the name of Her Majesty, 
 or by the Attorney-General in the name of Her Majesty. 
 
wm 
 
 ^1 
 
 jlii 
 
 302 
 
 SHAIIEIIOLDKIIS AND I)niP:rT()I{.S MANUAL. 
 
 ■f 700. One-half of all fines recovered belongs to the party snint; for 
 the same, and the other half to the Crown, and forms part of the con- 
 Bolidatec' revenue fund of the Province, unless, the suit be brout,'ht on 
 behalf of the '^,rowi. only, in which case the whole of the fine shall belong 
 to the Crown for the uses aforesaid. 
 
 FORM A. 
 
 Province of Quebec, ) 
 District of j 
 
 The — {name} — Company. 
 
 The {name) Company was incorporated in (name of the country, province, 
 etc.,) by (Letters-Patent or Statute, giving tit'e, etc.,) granted (or sanctioned 
 ()/• registered, as the case iniy be), on the (dite) 
 
 Its principal place of business in the Province of Quebec is at (name 
 of town, lOc.) 
 
 In testimony whereof, this declaration in duplicate is made and 
 signed by me (name,(uldrcs>i and calling), the (pre.-iident, principal manager, 
 chief agent, as the case may lie) of the said company, at (name of 'dace) on 
 the (date) 
 
 SECTION IV. ' 
 
 SPECIAL PROVISIONS RESPECTINd CERTAIN COMPANIES AND CORPORATIONS. 
 
 S 1. Powers of certain companies to divide their capital stock and to acquire 
 
 and hold real estate. 
 
 4761 • It is lawful for the directors of any company, of which the 
 capital stock is divided into shares being a multiple of one hundred, to 
 pass a by-law declaring that the capital stock of such company shall be 
 divided into shares of one hundred dollars each, and, from and after the 
 passing of such by-law such capital stock shall be divided into shares of 
 one hundred dollars each. 
 
 4703. Every company incorporated and existing in Great Britain, 
 in the United States of America, or in Canada, has the right to ac(iuire 
 and hold any lands and real estate in this Province, for its occupation or 
 the prosecution of its business only, any law to the contrary notwith- 
 standing. 
 
 470!t* No such corporation formed for the purpose of promoting 
 art, science, religion, charity, or any other like object, not involving the 
 ac(iuisition of gain by the corporation or by the individual members 
 thereof, shall, without the sanction of the Lieutenant-Governor in 
 Council, hold more than ten acres of land ; but the Lieutenant-Governor 
 in Council may, by license under the hand of the Provincial Secretary, 
 empower any such corporation to hold lands in such quantity and subject 
 to such conditions as he shall think fit. 
 
 
mUTISII COLUMBIA ACT. 
 
 303 
 
 BRITISH COLUMBIA 
 
 THE COMPANIES ACT, 1897. 
 
 An Act for the Incorporation and Kegulation of Joint Stock 
 Companies and Trading Corporations. 
 
 TTTIII'jREAS there are now several systema whereunder Joint Stock 
 ' ' Companies and Trading Corporations can be incorporated and 
 formed, and it is expedient to amend and consolidate the law in this 
 respect, and to enact an exclusive and comprehensive law f^overning 
 the formation and incorporation of Joint Stock Companies and Trading 
 Corporations. 
 
 Therefore, Her JVIajesty, by and with the advice and consent of the 
 Lej^islative Assembly of the Province of British Columbia, enacts as 
 follows : — 
 
 Interpretation. 
 
 1. In the constructi;!! and for the purposes of this Act(if not incon- 
 sistent with the context or subject matter) the following terms shall 
 have the respective meanings hereinafter assigned to them : — 
 
 " Charter " of a company shall mean the Act, statute, ordinance, or 
 other provision of law by or under which the company is incorporated, 
 and any amendments thereto applying to such company, whether of 
 this or of any other Province, or of the Dominion of Canada, or of the 
 United Kingdom, or of any colony or dependency thereof, or of any 
 foreign state or country, the Memorandum of Association or agreeme it 
 or deed of settlement of the company, and the letters patent, or charter 
 of incorporation, and the license or certificate of registration of t le 
 company, as the case may be : 
 
 " Charter and regulations " of a company shall mean the charter of 
 the company and the Articles of Association and all bylaws, rules and 
 regulations of the company, and all resolutions and contracts relating 
 to or affecting the capital and assets of the company : 
 
 " Company " shall mean any company which has been or is about to " 
 be incorporated under this Act, for any purpose or object to which the 
 legislative authority of the Legislature of liritish Columbia extends, 
 except the construction and working of railways and the business of 
 nsnrance : 
 
f^T'yy 
 
 ;i 
 
 I 
 
 i 
 
 I 
 
 304 
 
 SHAKEFIOLDEUS AND DIllECroKS MANUAL. 
 
 " Extra-Provincial Company " sliali mean any duly incorporated 
 company other than a company incorporated under the laws of the Pro- 
 vince of British Columbia : 
 
 " Real Estate " or " land " shall include all messuages, lands, tene- 
 ments, leaseholds and hereditaments of any tenure, and all immovable 
 real property of every kind : 
 
 " Ref^istrar " shall mean the Registrar of Joint Stock Companies : 
 " Registrar- General" shall mean the Registrar-General of Titles: 
 
 " Supreme (3ourt" and " the Court," shall mean and refer to Her 
 Majesty's Supreme Court of British Columbia: 
 
 " Shareholder " shall mean every subscriber to or holder of shares in 
 the company, and extend to and include the personal representatives of 
 the shareholder : 
 
 " Subscriber " shall mean any person who subscribes for shares in 
 the Memorandum of Association of the company. 
 
 Prdiminari/. 
 
 2. The Lieutenant-Governor in Council may from time to time 
 appoint such person as he shall think proper to act as Registrar of Joint 
 Stock Companies. 
 
 (2) It shall be the duty of the Registrar to enforce compliance with 
 the several provisions, regulations and stipulations in this Act con- 
 tained, or in any regulations made thereunder, but such duty shall not 
 affect the right of any other person to com.pel compliance with the 
 provisions hereof. 
 
 3. The Lieutenant-Governor in Council may from time to time, by 
 Order or Orders in Council, make and establish such General Rules and 
 Orders, not inconsistent with this Act, as may from time to time to him 
 appear necessary or expedient for the purpose of giving full effect to the 
 provisions of this Act or any or either of them, and for prescribing the 
 course to be adopted in the course of official business under this Act 
 and the forms to be used therein. All such General Rules and Orders 
 shall, after the making thereof, be published in the llritisli Columbia 
 Oiizette and shall thereupon have the force of law, until amended, 
 altered, or revoked. 
 
 Incorporation. 
 
 4. Associations of persons for the acquisition r.f gain by any lawful 
 means within the scope of this Act, may be formed according to the pro- 
 visions of Mils Act, and any such company, the members, shareholders, 
 and stockholders thereof shall be subject to the conditions and liabilities, 
 and be entitled to the rights and privileges imposed and conferred by 
 this Act. _..^ 
 
 a. In case a resolution, authorizing registration under the provisions 
 of this section, and the execution by the directors on behalf of tlie 
 shart'holdors of the company of a Memorandum of Association for the 
 objects specified in such resolution, is passed by a vote of not less than 
 
niUTISH COLUMHIA ACT. 
 
 305 
 
 two-thirds in value of the shareholders present in person or by proxy 
 at a general nieetinj^ of the company duly called for considering the 
 subject of such resolution, any company heretofore incorporated, or 
 purported or expressed to have been incorporated, under any Act of this 
 Province, or either of the former Colonies of Vancouver Island or 
 British Columbia, for purposes or objects and possessing powers and 
 rights within the scope of this Act, or within the scope of this Act as it 
 may be hereafter amended, and being at the time of registration a sub- 
 sisting and valid corporation, may deliver to the Registrar an official 
 copy of the Charter and regulations of the company, certified under the 
 hand and seal of a person duly authorized for the purpose by the resolu- 
 tion aforesaid, and the certificate (if any) of the incorporation of such 
 company, or an official copy thereof, certified as aforesaid, and upon 
 payment to the Registrar of a fee of ten dollars shall be entitled to 
 tdceive from the Registrar a certificate of the reincorporation and registra- 
 tion of the company as a company under this Act, for the objects and 
 purposes set out in the Memorandum of Association executed in pursu- 
 ance of such resolution, and, thereupon the old company shall as such 
 company cease to exist, and all the rights and obligations of the former 
 company shall be transferred to the new company, and all proceedings 
 may be continued and commenced by or against the new company that 
 might have been continued or commenced by or against the old com- 
 pany, and it shall not be necessary in the certificate of reincorporation 
 and registration to set out the names of the shareholders ; and after 
 such reincorporation and registration the company shall be governed in 
 all respects by the provisions of this Act, except that the liability of the 
 shareholders to creditors of the old company shall remain as at the time 
 of the reincorporation, and of such reincorporation the certificate afore- 
 said shall be conclusive evidence, as well as conclusive evidence of due 
 registration and observance of all statutory recjuirements with respect 
 to registration or incorporation in force prior to the passage of this Act. 
 
 (a) Where an existing company applies for registration under this 
 section the directors may, in and by the IMemorandum of 
 Association executed pursuant to and conforming to the pro- 
 visions of the resolution of the company authorizing the 
 execution thereof, extend, vary or limit the powers and objects 
 of the company, and the certificate of registration under this 
 section may be to the new company by the name of the old 
 company, or by any other name of which the last word shall be 
 the word " limited : " 
 
 (6) Where an existing company is registered under this section the 
 capital of the company may be increased or decreased to any 
 amount which may be fixed by the resolution of the company 
 authorizing such registration : 
 
 (c) The said resolution may prescribe the manner in which the 
 shares or stock in the new company are to be allotted, and in 
 
 W.E.DM. — 20 
 
■^^m 
 
 
 
 306 SHAIIEHOLDERS' AND DIUECTORs' MANUAL, 
 
 default of its so doing the control of the allotment shall vest 
 absolutely in the directors of the new company: 
 
 {(l) Whenever the Registrar considers that public notice of an 
 intended application, under this section, should be given, he 
 may require such notice to be published i* le Gazette or other- 
 wise as he thinks proper : 
 
 (e) Every certificate of registration issued under this section shall 
 be published for four weeks in the British Columbia Gazette 
 and in one newspaper circulating In the city or district in 
 which the registered office of the company is situate : 
 
 6. For the purposes of this Act, a company that carries on the 
 business of fire, life, marine, or other insurance in common with any 
 other business, shall be deemed to be an Insurance Company. 
 
 7. No company, association, or partnership, consisting of more 
 than twenty persons shall be formed, after the commencement of this 
 Act, for the purpose of carrying on any business, within the scope of 
 this Act, that has for its object the aciiuisition of gain by the company, 
 association, or partnership, or by the individual members thereof, unless 
 it is registered as a company under this Act, or is formed in pursuance 
 of some other Act, or of letters patent. 
 
 8. This Act is divided into ten parts, relating to the following 
 subject-matters : — 
 
 The First Part, — to the Constitution and Incorporation of Com- 
 panies and Associations under this Act : 
 
 The Second Part, — to the Distribution of the Capital, and the 
 Liability of Members of Companies and Associations under 
 this Act : 
 
 The Third Part, — to the Extraordinary Powers of Companies under 
 this Act : 
 
 The Fourth Part, — to the Management and Administration of Com- 
 panies and Associations under this Act : 
 
 The Fifth Part, — to the Borrowing Powers of Companies under this 
 Act: 
 
 The Sixth Part, — to the Licensing and Registration of Extra-Pro- 
 vincial Companies : 
 
 The Seventh Part, — to the Procedure in Actions against Unregistered 
 Extra-Provincial Companies : 
 
 The Eighth Part, — to the Voluntary Winding up of Companies 
 under this Act : 
 
 The Ninth Part, — to the Protection of Purchasers of Stock from 
 Losses by Forged Transfers, and the Prevention of Fraudulent 
 and Negligent Practices : 
 
 The Tenth Part, — to the Repeal of Former Enactments. 
 
1. .ITISH COU'MHIA ACT. 
 
 307 
 
 PART I. 
 
 Constitution and Incorporation of Companies and Associations 
 
 UNDER THIS AcT. 
 
 Menioramlum of Association. 
 
 9. Any five or more persons associaced for any lawful purpose 
 within the scope of this Act may, by Bubscribinf' their names to a Mem- 
 orandum of Association, and otherwise complying with the requisitions 
 of this Act in respect of registration, form an incorporated cortpany, 
 with or without limited liability. 
 
 10. The liability of the members of a company formed under this 
 Act may, according to the Memorandum of Association, be limited 
 either to the amount, if any, unpaid on the shares respectively held by 
 them, or to such amount as the members may respectively undertake 
 by the Memorandum of Association to contribute to the assets of the 
 company, in the event of its being wound up. 
 
 11. Where a company is formed on the principle of having the 
 liability of its members limited to the amount unpaid on their shares, 
 hei"einafter referred to as a company limited by shares, the Memoran- 
 dum of Association shall contain the following things, that is to say : — 
 
 /I) The name of the proposed company, with the addition of the 
 word " Limited " as tlie last word in such name : 
 The part of the Province in which the registered office of the 
 company is proposed to be situate : 
 
 The objects for which the proposed company is to be estab- 
 lished : 
 
 The time of existence of the proposed company, if it is intended 
 to secure incorporation for a fixed period : 
 
 (5) A declaration that the liability of the members is limited : 
 
 ((i) The amount of capital with which the company proposes to be 
 registered, divided into shares of a certain fixed amount : 
 
 Subject to the following regulations : — 
 
 (1) That no subscriber shall take less than one share : 
 
 (2) That each subscriber of the Memorandum of Association shall 
 write opposite to his name the number of shares he takes : 
 
 That each subscriber to the Memorandum of Association shall 
 be the bona fide holder in his own right of the share or shares 
 for which he has subscribed in the Memorandum of Association. 
 
 (2) 
 (3) 
 
 w 
 
 (3) 
 
 1!3. Where a company is formed on the principle of having the 
 liability of its members limited to such amount as the members respec- 
 tively undertake to contribute to the assets of the company in the event 
 of the same being wound up, hereinafter referred to as a company 
 limited by guarantee, the Jlemorandum of Association shall contain the 
 following things, that is to say : — 
 

 u 
 
 I 
 
 li i 
 
 308 shareholders' and directors' manual. 
 
 (1) The name of the proposed company, with the addition of the 
 words " Limited by guarantee " as the last words in such name : 
 
 (2) Tlie part of the Province in which the registered office of the 
 company is proposed to be situate : 
 
 (8) The objects for which the proposed company is to be estab- 
 lished : 
 
 (4) A declaration that each member undertakes to contribute to the 
 assets of the company, in the event of the same being wound 
 up, during the time that he is a member, or within one year 
 afterwards, for payment of the debts and liabilities of the com- 
 pany contracted before the time at which he ceases to be a 
 member, and of the costs, charges and expenses of winding up 
 the company, and for the adjustment of the rights of the con- 
 tributories amongst themselves, such amount as may be required, 
 not exceeding a specified amount. 
 
 13> Where £>. .v;.r.pany is formed on the principle of having no limit 
 placed on the liability of its members, hereinafter referred to as an 
 unlimited company, the Memorandum of Association shall contain the 
 following things, that is to say : — 
 
 (1) The name of the proposed company : 
 
 (2) The part of the Province in which the registered office of the 
 company is proposed to be situate : 
 
 (3) The objects for which the proposed company is to be estab- 
 lished. 
 
 14. The Memorandum of Association shall be signed by each sub- 
 scriber in the presence of, and be attested by, one witness at the least ; 
 it shall, when registered, bind the company and the members thereof to 
 the same extent as if each member had subscribed his name and affixed 
 his seal thereto, and there were in the memorandum contained, on the 
 part of himself, his heirs, executors and administrators, a covenant to 
 observe all the conditions of such Memorandum, subject to the provisions 
 of this Act. 
 
 J 3. Any company limited by shares may so far modify the condi- 
 tions contained in its Memorandum of Association, if authorized to do 
 80 by its regulations as originally framed, or as altered by special 
 resolution in manner hereinafter mentioned, as to increase its capital, 
 by the issue of new shares of such amount as it thinks expedient, or to 
 consolidate and divide its capital into shares of larger amount than its 
 existing shares, or to convert its paid-up shares into stock, but, save 
 as aforesaid, and save as to the location of the registered office of the 
 company, and as is hereinafter provided, no alteration shall be made 
 by any company in the conditions contained in its Memorandum of 
 Association. 
 
ItHITlSH COLL'MIUA ACT. 
 
 300 
 
 ArticleH of Aimocidtioii. 
 
 10. Tlie Memorandum of Associiition may, in the case of a com- 
 pany limited by Hhareu, and Hliall, in the case of a company limited by 
 guarantee or nnlimited, be accompanied, when reii^istered, by Articles 
 of Association, sif^ned by the subscribers to the Memorandum of 
 Association, and prescribiufj such regulations for the compatiy as the 
 subscribers to the Memorandum of Association deem expedient. The 
 Articles shall be expressed in separate paratjraphs numbered arith- 
 metically ; they may adopt all or any of the provisions contained in 
 the table marked A in the First Schedule hereto; they shall, in the 
 case of a company, whether limited by f^uarantee or unlimited, that 
 has a capital divided into shares, state the amount of capital with 
 which the company proposes to be registered ; and in the case of a 
 company, whether limited by guaraxf > or unlimited, that has not a 
 capital divided into shares, state tK_ . iber of members with which 
 t.ie company proposes to be registered, for tiie purpose of enabling the 
 Registrar to determine the fees payable on registration. In a company 
 limited by guarantee or unlimited, and having a capital divided into 
 shares, each subscriber shall take one share at the least, and shall svrite 
 opposite to his name in the Memorandum of Association the number of 
 shares he takes. 
 
 IT". In the case of a Company limited by shares, if the Memoran- 
 dum of Association is not accompanied by Articles of Association, or in 
 so far as the articles do not exclude or modify the regulations contained 
 in the table marked A in the First Schedule hereto, the last mentioned 
 regulations shall, so far as the same are applicable, be deemed to be the 
 regulations of the company in the same manner and to the same extent 
 as if they had been inserted in Articles of Association, and the Articles 
 had been duly registered. 
 
 18. The Articles of Association shall be printed, and shall be signed 
 by each subscriber in t,he presence of, and be attested by, one witness at 
 the least. When registered, they shall bind the company and the mem- 
 bers thereof to the same extent as if each member had subscribed his 
 name and affixed his seal thereto, and there were in such Articles con- 
 tained a covenant on the part of himself, his heirs, executors, and 
 administrators, to conform to all the regulations contained in such 
 Articles, subject to the provisions of this Act ; and all moneys payable 
 by any member to the company, in pursuance of the conditions and 
 regulations of the company, or any of such conditions or regulations, 
 shall be deemed to be a debt due from such member to the company in 
 the nature of a specialty debt. 
 
 General Provisions. 
 
 19. The Memorandum of Association and the Articles of Associa- 
 tion, if any, shall be delivered to the Registrar of Joint Stock Com- 
 panies, who shall retain and register the same. There shall be paid 
 to the Registrar by a company having a capital divided into shares, 
 
m 
 
 ill' 
 
 
 v'li 
 
 310 
 
 SHAUEHOLDEIIS AXD DIUECTOllS MANUAL. 
 
 in renpcct of the several matters mentioned in the table marked D in 
 the First Schedule hereto, the several fees therein specified, or such 
 smaller fees as the Lieutenant Governor in Council may, from time 
 to time, by Order or Orders in Council, direct ; and by a company 
 not havinfi a capital divided into shares, in respect of tlie sovoral 
 matters mentioned in the table marked C in the First Schedule 
 hereto, the several fees therein specified, or such smaller fees as the 
 Lieutenant-Governor in Council may, from time to time, by Order or 
 Orders in Council, direct. All fees paid to the said lle^'istrar in pursu- 
 ance of this Act shall be paid and carried to the account of the Consoli- 
 dated Revenue Fund of the Province. 
 
 20. Upon the re{»istration of the Memorandum of Association, and 
 of the Articles of Association in cases where Article.-} of Association are 
 recjuired by this Act, or by the desire of the parties to be registered, 
 the He^istrar shall issue a certificate of incorporation, showing the cor- 
 porate name of the company, the part of the Province wliere the ref^is- 
 tered oflice of the company is proposed tc; lie situate, the objects for 
 which the company has been established, the amount of the capital of 
 the company, tlie number of shares into wliich the same is divided, 
 and the amount of each share, the time of existence of the company if 
 incorporated for a fixed period, and in the case of a limited company 
 that the company is limited, and in tho case, of a mining' company the 
 liability of the members whei'eof is specially limited under section 56 
 hereof, that the company is so specially limited under said section 5C ; 
 and such certificate shall be published for four weeks in the Britixh 
 Columbia Gazi'tt". Tiie subscribers of the Memorandum of Associa- 
 tion, together with sucli other persons as may from time to time become 
 members of the company, shall thcreui)on be a body corporate by the 
 name contained in the Memorandum of Association, capable forth- 
 with of exercising all the functions of an incorporated company, and 
 having perpetual succession and a common seal, with power to hold 
 lands, but with such liability on the part of the members to contribute 
 to the assets of the company in the event of the same being wound 
 up as is hereinafter mentioned. A certificate of the incorporation 
 of any company given by the Registrar shall be conclusive evidence that 
 all the requisitions of this Act in respect to registration have been com- 
 plied with. 
 
 31. Subject to the provisions of this Act, any company registered 
 under this Act may, by special resolution, alter the provisions of its 
 Memorandum of Association, so far as may be required for any of the 
 purposes hereinafter specified, but in no case shall any Such alteration 
 take effect until confirmed, on petition, by the Supreme Court. 
 
 (2) Before confirming any such alteration the Supreme Court must 
 be satisfied — 
 
 (a) That sufficient notice has been given to every holder of 
 debentures or debenture stock of the company, and any 
 
HIUTISH COLUMBIA ACT. 
 
 311 
 
 person or class of persona whose interests will, in the 
 opinion of the Court, be affeoted by tlio ulteratioti ; and 
 (b) That, with respect to every creditor wlio, in the opinion of 
 the Court, is entitled to object, and who signifies his objec- 
 tion in manner directed by the Court, either his consent to 
 the alteration has been obtained or his debt or claim has 
 been discharged or has determined, or has been secured to 
 the satisfaction of the Court : 
 
 Provided that the Court may, in the case of any person or class 
 of persons, for special reasons, dispense with the notice 
 re(]uired by this section : 
 
 (3) An order confirming any such alteration may be made on such 
 
 terms and subject to such conditions aa to the Court seems fit, 
 and the Court may make such orders as to costs as it deems 
 proper : 
 
 (4) The Court shall, in exercising its discretion under the provisions 
 
 of this section, have regard to the rights and interests of the 
 members of the company, or of any class of those members, as 
 well as to the rights and interests of the creditors, and may, if 
 it thinks fit, adjourn the proceedings in order that an arrange- 
 ment may be made to the satisfaction of the Court for the pur- 
 chase of the interests of dissentient members ; and the Court 
 may give such directions and make such orders as it may think 
 expedient for the purpose of facilitating any such arrangement 
 or carrying the same into effect : Provided always, that it shall 
 not be lawful to expend any part of the capital of the company 
 in any such purchase : 
 
 (5) The Court may confirm, either wholly or in part, any such alter- 
 
 ation as aforesaid with respect to the objects of the company if 
 it appears that tlie alteration is rei^uired in order to enable the 
 company — 
 
 (a) To carry on its business more economically or more effi- 
 ciently ; or 
 
 (b) To attain its main purpose by new or improved means ; or 
 
 (c) To enlarge or change the local area of its operations ; or 
 
 (d) To carry on some business which, under existing circum- 
 
 stances, may conveniently or advantageously be combined 
 with the business of the company ; or 
 
 (e) To restrict or abandon any of the objects specified in the 
 
 Memorandum of Association. 
 
 33. Where a company has altered the provisions of its Memoran- 
 dum of Association with respect to the objects of the company, and 
 such alteration has been confirmed by the Court, an office copy of the 
 order confirming such alteration, together with a printed copy of the 
 
1^ 
 
 i 
 
 812 
 
 SHAUEHOLDEIIS AND DIRECTOUS MANUAL. 
 
 Memorandum of AsBociatiun so altered Bhall be delivered by the com- 
 pany to the RoRistrar witliin fifteen days from the date of the order, 
 and the Registrar Hhall register tlie Hame, and Hhall certify under his 
 hand the registration thereof, and his certificate shall be conclusive evi- 
 dence that all the requiHitions of this Act witii respect to such alter- 
 ation and the confirmation thereof have been complied with, and thence- 
 forth (but subject to the provisions of this Act) the Memorandum so 
 altered shall be the Memorandum of Association of the company. 
 
 (2) If a, company makes default in deliverinjj to the Rejjistrar any 
 document required by this section to be delivered to him, the company 
 shall, upon summary conviction, be liable to a penalty not exceedinfj 
 fifty dollars for every day during,' which it is in default, and every 
 director, mana^^er, secretary and officer of the company who shall 
 knowingly and wilfully authorize or permit such default, shall, upon 
 summary conviction, be liable to the like penalty. 
 
 23. A copy of the Memorandum of Association, having; annexed 
 thereto the Articles of Association, if any, shall be forwarded to every 
 member, at his request, on payment of the sum of one dollar, or such 
 less sum as may be prescribed by the company, for each copy ; and 
 if any company makes default in forwardin^j a copy of the Memoran- 
 dum of Association and Articles of Association, if any, to a member, 
 in pursuance of this section, the company so making default shall, 
 upon summary conviction, for each offence be liable to a penalty not 
 exceeding five dollars, and every director, manager, secretary and ofticer 
 of the company who shall knowingly and wilfully authorize or permit 
 such default shall, upon summary conviction, be liable to the like 
 penalty. 
 
 24* No company shall be registered under a name identical with 
 that by which a subsisting company is already registered, or so nearly 
 resembling the same as to be calculated to deceive, except in a case 
 where such subsisting company is in the course of being dissolved, 
 and testifies iis consent in such manner as the Registrar requires ; and 
 if any company, through inadvertence or otherwise, is, without such 
 consent as aforesaid, registered by a name identical with that by which 
 a subsisting company is registered, or so nearly resembling the same 
 as to be calculated to deceive, such first- mentioned company shall, upon 
 the direction of the Registrar, change its name, and upon such change 
 being made the Registrar shall enter the new name on the register in 
 the place of the former name, and shall issue a certificate of incorpo- 
 ration alt»ired to meet the circumstances of the case; but no such 
 alteration of name shall affect any rights or obligations of the company 
 or render defective any legal proceedings instituted or to be instituted 
 by or against the company, and any legal proceeding may be continued 
 or commenced against the company by its new name that might 
 have been continued or commenced against the company by its former 
 name. 
 
BRITISH COLUMBIA ACT. 
 
 313 
 
 Contracts. 
 
 Sff. ContractH on bohalf of any company incorporated under this 
 Act may be made aa follows, that is to say : — 
 
 (1) Any contract which, if made between private persons, would bo 
 
 by law reciiiired to be in writing, and if made according; to 
 the law of this Province or of the Dominion of Canada to bo 
 under seal, may be made on behalf of the company, in writing, 
 under the common seal of the company, and such contract may 
 be in the same manner varied or discharfjed : 
 
 (2) Any contract which, if made between private persons, would be 
 by law required to be in writing, and signed by the parties to 
 be charged therewith, may be made on behalf of the company 
 in writing, signed by any person acting und'^i the express or 
 implied authority of the company, and such contract may in 
 the same manner be varied or discharged : 
 
 (3) Any contract which, if made between private persons, would by 
 
 law be valid, although made by parol only, and not reduced 
 into writing, may be made by parol on behalf of the company 
 by any person acting under the express or implied authority of 
 the company, any such contract may in the same way be 
 varied or discharged : 
 
 And all contracts made according to the provisions herein contained 
 shall be effectual in law, and shall be binding upon the company and 
 their successors, and all other parties thereto, their heirs, executors, or 
 administrators, as the case may be. 
 
 SO. A promissory note or bill of exchange shall be deemed to have 
 been made, accepted, or indorsed on behalf of any company under this 
 Act if made, accepted, or indorsed in the name of the company by 
 any person acting under the authority of the company, or if made, 
 accepted, or indorsed by or on behalf or on account of the company by 
 any person acting under the authority of the company. 
 
 27. t,\ery contract, agreement, engagement, or bargain made and 
 every bill of exchange drawn, accepted, or indorsed, and every promis- 
 sory note and cheque made, drawn, or inairsed on behalf of the com- 
 pany by any agent, officer, or servant of the company, in general 
 accordance with his powers as such under the fegulation& of the company, 
 shall be binding upon the company ; and ir no case shall it be neces- 
 sary to have the seal of the company aft xed to any such contract, 
 agreement, engagement, bargain, bill of exchange, promissory note, or 
 cheque, or to prove that the same was made, drawn, accepted, or 
 indorsed, as the case may be, in pursuance of any regulations, or special 
 resolution or order ; nor shall the party so acting as agent, officer, or 
 servant of the company be thereby subjected individually to any 
 liability whatsoever to any third party therefor. 
 
314 
 
 SHAREHOLUEHS' AND DIRECTORS' MANUAL 
 
 (rt) Nothing in this Act shall be constiucd to authorize the com- 
 pany to issue any note payable to the bearer thereof, or any promis- 
 sory note intended to be circulated as money, or as the note of a bank 
 or to engage in the business of banking. 
 
 28- The directors of the company shall not declare or pay any divi- 
 dend when the company is insolvent, or any dividend, the payment of 
 which renders the company insolvent, or diminishes the capital 
 thereof, but if any director present when such dividend is declared, 
 forthwith, or if any director then absent, within twenty-four hours, 
 after he has become aware thereof and able so to do, enters on the 
 minutes of the Board of Directors his protest against the same, and 
 within eight days thereafter causes such protest to be published in at 
 least one newspaper published at, or as near as may be possible to, the 
 head office or chief place of business of the company, such director 
 may thereby, and not otherwise, exonerate himself from liability. 
 
 20- No loan shall be made by the company to any shareholder, 
 and if such loan is made all directors and other officers of the com- 
 pany making the same, and in anywise assenting thereto, shall be 
 jointly and severally liable to the company for the amount thereof, 
 and also to third parties to th( extent of such loan with legal interest, 
 for all debts of the company contracted from the time of the making of 
 the loan to that of the repayment thereof, but this section shall not 
 apply to a building society, or to a company incorporated for the lending 
 of money. 
 
 PART II. 
 
 DiSTRinUTION OF CAPITAL OF COMPANIES AND LIABILITY OF MeMBEKS AND 
 
 Officers of Companies under this Act. 
 Distribution of Capital. 
 
 30. The subscribers of the Memorandum of Association of any 
 company under this Act sliall be deemed to have agreed to become mem- 
 bers of the company whose memorandum they have subscribed, and 
 upon the registration of the company shall be entered as members on 
 the Kegister of Members hereinafter mentioned ; and every other person 
 who has agreed to become a member of a company under this Act, 
 and whose name is entered on the Register of Members, shall be deemed 
 to be a member of the company. 
 
 31. The shares or other interest of any member in a company under 
 this Act shall be personal estate, capable of being transferred in manner 
 provided by the regnlations of the company, and shall not be of the 
 nature of real estate, and each share shall, in the case of a company 
 having a capital divided into sliares, be distinguished by its appropriate 
 number. 
 
BUITISH COLUMBIA ACT. 
 
 315 
 
 32. Any transfer of the share or other interest of a deceased mem- 
 ber of a company under this Act, made by his personal representative, 
 shall, notwithstandinj* such personal representative may not himself 
 be a member, be of the same validity as if he had been a member at the 
 time of the execution of the instrument of transfer. 
 
 33. Every executor, administrator, fjuardian or trustee, shall 
 repress \t the shares or stock in his hands at all meetings of the company 
 and mr.y vote accordingly as a shareholder ; and every person who 
 pledges (lis stock may nevertheless represent the same at all such meet- 
 ings, and may vote accordingly as a shareholder. 
 
 34. A company shall, on the application of the transferor of any 
 share or interest in the company, enter in its Register of Members the 
 name of the transferee of such share or interest, in the same manner 
 and subject to the same conditions as if tiie application for such entry 
 were made by the transferee. 
 
 35. Any transfer of shares in a company under this Act, made for 
 the purpose of getting rid of the further liability of a shareholder, as 
 such, for a nominal or no consideration, or to a person in the menial or 
 domestic service of the transferor, shall be deemed to be a fraudulent 
 transfer and need not be recognized by the company or by the Court on 
 the winding up of the company. 
 
 30. Every company under this Act shall cause to be kept in one or 
 more books a Register of its Members, and there shall be entered therein 
 the following particulars :-- 
 
 (1) The names and addresses, and the occupations, if any, of the 
 members of the company, with the addition, in the case of a 
 company having a capital divided into shares, of a statement of 
 the shares held by each member, distinguishing each share by 
 its number ; and of the amount paid or agreed to be considered 
 as paid on the sliares of each member : 
 
 (2) The date at which the name of any percon was entered in the 
 Register as a member. 
 
 (3) The date at which any person ceased to be a member : 
 
 And any company acting in contravention of this section, shall, npon 
 summary corviction, be liable to a penalty not exceeding twentytive 
 dollars for e^ ery day during which its default in complying with tlie 
 provisions of this section continues, and every diractor, manager, secre- 
 tary and f/flicer of the company who shall knowingly and wilfully 
 authorize or permit such contravention shall, upon summary conviction, 
 be liable to the like penally. 
 
 37. Every company under this Act, and having a capital divided 
 into shares, shall make, once at least in every year, a list in the form E 
 in the Second Schedule, of all persons who, on the fourteenth day 
 succeeding the day on which the ordinary general meeting, or if there is 
 
M 
 
 316 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 more than one ordinary meeting in each year, the first of such ordinary 
 general meetings is held, are members of the company ; and such list 
 shall state the names, and so far as may be possible, addresses and occu- 
 pations of all the members therein mentioned, and the number of shares 
 held by each of them, and shall contain a summary specifying the 
 following particulars : — 
 
 (1) The amount of the capital of the company, and the number of 
 shares into which it is divided : 
 
 (2) The number of shares taken from the commencement of the 
 company up to the date of the summary : 
 
 (3) The amount of calls made on each share : 
 
 (4) The total amount of calls received : , 
 
 (5) The total amount of calls unpaid : 
 
 (6) The total amount of shares forfeited : 
 
 (7) The names, addresses, and occupations of the persons who have 
 
 ceased to be members since the last list was made, and the 
 number of shares formerly held by each of them : 
 
 The above list and summary shall be contained in a separate part of 
 the Register, and shall be completed within seven days after such 
 fourteenth day as is mentioned in this section, and a copy shall forth- 
 with be forwarded to the Registrar. 
 
 38. If any company under tliis Act, and having a capital divided 
 into shares, makes default in complying with the provisions of this Act 
 with respect to forwarding such list of members or summary as is here- 
 inbefore mentioned to the Registrar, such company shall, upon summary 
 conviction, be liable to a penalty not exceeding twenty-five dollars for 
 every day during which such default continues, and every director, 
 manager, secretary and officer of the company who shall knowingly and 
 wilfully authorize or permit such default sliall, upon summary convic- 
 tion, be liable to the like penalty. 
 
 30. Every company under this Act, having a capital divided into 
 shares, that has consolidated and divided its capital into sliares of 
 larger amount than its existing shares, or converted any portion of its 
 capital into stock, shall forthwith give notice to the Registrar of such 
 consolidation, division or conversion, specifying the sliares so consoli- 
 dated, divided, or converted, and in default shall be subject to the 
 penalty in the last section mentioned. 
 
 40. Where any company under this Act, and having a capital 
 divided into shares, has converted any portion of its capital into stock, 
 and given notice of such conversion to the Registrar, all the provisions 
 of this Act which are applicable to shares only shall cease as to so 
 much of the capital as is converted into stock; and the Register of 
 Members hereby required to be kept by the company, and the list of 
 members to be forwarded to the Registrar, shall show the amount of 
 stock held by each member in the list, instead of the amount of shares 
 and the particulars relating to shares hereinbefore required. 
 
milTlSH COLUMBIA ACT. 
 
 317 
 
 41. No notice of any trust, expressed, implied, or constructive, shall 
 be entered on the Ilef^ister, or be receivable by the Registrar, in the 
 case of companies under this Act. 
 
 42 The company shall not be bound to see to the execution of any 
 trust, whether express, implied or constructive, in respect of any share ; 
 and the receipt of the shareholder in whose name the same stands on 
 the books of the company shall be a valid and bindinj^ discharge to the 
 company for any dividend or money payable in respect of such share, 
 whether or not notice of the trust has been fjiven to the company; and 
 the company shall not be bound to see to the application of the money 
 paid upon such receipt. 
 
 43. A certificate, under the common seal of the company, specify- 
 ing any share or shares or stock held by any member of a company, shall 
 be primd jacie evidence of the title of the member to the share or shares 
 or stock therein specified, 
 
 44. The Register of Members, commencing from the date of the 
 registration of the company, shall be kept at the registered office of the 
 company hereinafter mentioned. Except when closed as hereinafter 
 mentioned, it shall, during business hours, subject to such reasonable 
 restrictions as the company in general meeting may impose (but so 
 thsX no less than two hours in each day be appointed for inspection), be 
 open to the inspection of anj member gratis, and to the inspection of 
 any other person on the payment of twenty-five cents, or such less sum 
 as the company may prescribe for each inspection ; and every such 
 member or other person may require a copy of such Register, or of any 
 part thereof, or of such list or summary of members as is hereinbefore 
 mentioned, on payment of twenty-five cents for every hundred words 
 required to be copied. If such inspection or copy is refused, the com- 
 pany shall, for each refusal, upon summary conviction, be liable to a 
 penalty not exceeding ten dollars, and a further penalty not exceeding 
 ten dollars for every day during which such refusal continues ; and every 
 director, manager, secretary and officer of the company who shall know- 
 ingly authorize or permit such refusal shall, upon summary conviction, 
 be liable to the like penalty ; and in addition to the above penalty any 
 Judge of the .Supreme Court, sittnig in Chambers, may by summary 
 order compel an immediate inspection of the Register. 
 
 45. Any company under this Act 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. 
 
 40. Where a company has a capital divided into shares, whether 
 such shares may or may not have been converted into stock, notice of 
 any increase in such capital beyond the registered capital, and where a 
 oompany has not a capital divided into shares, notice of any increase in 
 
^ 
 
 318 
 
 SHAllEHOLDEllS AND DIRECTOIIH MANUAL. 
 
 i 
 
 the number of members beyond the registered number, shall be given to 
 the Registrar in the case of aft increase in capital, within fifteen days 
 from the date of the passing of the resolution by which such increase 
 has been authorized, and in the case of an increase o! members within 
 fifteen days from the time at which such increase of members has been 
 resolved on or has taken place, and the Registrar shall forthwith record 
 the amount of such increase of capital or members. If such notice is 
 not given within the period aforesaid, the company in default shall, upon 
 summary conviction, be liable to a penalty not exceeding twenty-five 
 dollars for every day during which such neglect to give notice continues ; 
 and every director, manager, secretary and officer of the company who 
 shall knowingly and wilfully authorize and permit such default shall, 
 upon summary conviction, be liable to the like penalty. 
 
 47. If the name of any person is, without sufficient cause, entered 
 in or omitted from the Register of Members of any company under this 
 Act, or if default is made or unnecessary delay takes place in entering in 
 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 com- 
 pany, or the company itself, may by motion in the Supreme Court, or 
 by application to a Judge thereof sitting in Chambers, apply for an order 
 of the Court that the Register may be rectitied, and the Court or Judge 
 may either refuse such application, with or without costs, to be paid by 
 the applicant, or it may, if satisfied of the justice of the case, make an 
 order for the rectification of the Register, and may direct the company 
 to pay all the costs of such motion or application, and any damages the 
 party aggrieved may have sustained. The Court may in any proceeding 
 under this section decide on any (inestion relating to the title of any 
 person who is a party to such proceeding to have his name entered in or 
 omitted from the Register, whether such question arises between two or 
 more members or alleged members, or between any members or alleged 
 members and the company, and generally the Court may in any such 
 proceeding decide any question that it may be necessary or expedient to 
 decide for the rectification of the Register : Provided that the Court or 
 Judge may direct an issue to be tried, in which any question of law may 
 be raised, and an appeal shall lie. 
 
 48- Whenever any order has been made rectifying the Register, in 
 the case of a company hereby required to send a list of its members to 
 the Registrar, the Court shall, by its order, direct that due notice of 
 such rectification be given to the Registrar. 
 
 49. The Register of Members shall be prima jacie evidence of any 
 matters by this Act directed or authorized to be inserted therein. 
 
 Liability of Members. 
 
 50. Every share in any company shall be deemed and taken to 
 have been issued and to be held subject to the payment of the whole 
 amount thereof in cash, unless the same shall have been otherwise de- 
 
BRITI-SH COLUMBIA ACT. 
 
 319 
 
 termined by a contract duly made in writing and filed with the Registrar 
 at or before the issue of such share. 
 
 51. Each shareholder, until the whole amount of his shares, stock, 
 or other interest has been paid up, shall be individually liable to the 
 creditors of the comjmny to an amount equal to that not paid up thereon, 
 but shall not be liable to an action therefor by any creditor before an 
 execution against the company has been returned unsatisfied in whole 
 or in part; and the amount due on such execution, but not beyond the 
 amount so unpaid of his said shares, stock, or other interest, shall be the 
 amount so recoverable with costs, against such shareholder : 
 
 (a) Any shareholder may plead by way of defence, in whole or in 
 part, any set-off which he could set up against the company 
 except a claim for unpaid dividends, or a salary or allowance 
 as a president or a director of the company : 
 • (b) The shareholders of the company shall not as such be held 
 responsible for any act, default, or liability whatsoever, of the 
 cotnpany, or for any enga}<ement, claim, payment, loss, injury, 
 transaction, matter or thing whatsoever, relating to or con- 
 nected with the company, beyond the unpaid amount of their 
 respective shares in the capital stock thereof. 
 
 53- No person holding shares, stock, or other interest in the com- 
 pany as executor, administrator, guardian or trustee, shall be personally 
 subject to liability as a shareholder ; but the estates and funds in the 
 hands of such person shall be liable in like maimer and to the same ex- 
 tent, as the testator or intestate or the minor, ward, or person interested 
 in the trust fund, would be, if living and competent to act and holding 
 such shares, stock, or other interest in his own name. 
 
 53. No person holding shares, stock, or other interest as collateral 
 security, shall be personally subject to liability as a shareholder ; but 
 the person pledging such shares, stock, or other interest as such collateral 
 security shall be considered as holding the same, and shall be liable as a 
 shareholder in respect thereof. 
 
 54. In the event of a company formed under this Act or under any 
 other Act of the Legislature being wound up, every present and past 
 member of such company shall be liable to contribute to the assets of the 
 company to an amount sufficient for payment of the debts and lia- 
 bilities of the company, and the costs, charges, and expenses of the 
 winding up, and for the payment of such sums as may be required for 
 the adjustment of the rights of the contributories amongst themselves, 
 with the qualifications following (that is to say): — 
 
 (1) No past member shall be liable to contribute to the assets of tiie 
 company if he has ceased to be a member for a period of one 
 year or upwards prior to the commencement of the winding up : 
 
 (2) No past member shall be liable to contribute in respect of any 
 debt or liability of the company contracted after the time at 
 which he ceased to be a member : 
 
320 SHAIIEHOF.DEIIS' AND DIRECTORS' MANUAL. 
 
 (3) No past member Hliall be liable to contribute to the assets of the 
 company unless it appears to the Court that the existing mem- 
 bers are unable to satisfy the contributions required to be made 
 by them in pursuance of this Act : 
 
 (4) In the case of a company limited by shares, no contribution 
 shall be re(juired from any member exceediiif^ the amount, if 
 any, unpaid on the shares in respect of which he is liable as a 
 present or past member : 
 
 (5) In the case of a company limited by f>uarantee, no contribution 
 shall be required from any member exceeding the amount of the 
 undertaking entered into on his behalf by the Memorandum of 
 Association : 
 
 (6) Nothing in this Act contained shall invalidate any provision 
 contained in any contract whereby the liability of individual 
 members upon any such contract is restricted, or whereby the 
 funds of the company are alone made liable in respect of such 
 contract : 
 
 (7) No sum due to any member of a company, in his character of a 
 member, by way of dividends, profits, or otherwise, shall bo 
 deemed to be a debt of the company, payable to such member in 
 a case of competition between himself and any other creditor 
 not being a member of the company ; but any such sum may bo 
 taken into account, for the purposes of the final adjustment of 
 the rights of the contributories among themselves. 
 
 PART III. 
 
 EXTRAOKDINAHY PoWERS OF CoMl'AMES. 
 
 Preferfuce Shares. 
 
 5«l. The directors of any company incorporated or re-incorporated 
 under this Act may, with the sanction of a special resolution of the com- 
 pany previously given in general meeting, create and issue any part of 
 the capital as preference shares, giving the same such preference and 
 priority as respects dividends and otherwise over ordinary shares as may 
 be declared by the special resolution : 
 
 (a) The special resolution may provide that the holders of such 
 preference shares shall have the right to select a certain stated 
 proportion of the board of directors, or may give iImui such 
 other control over the affairs of the company as may be con- 
 sidered expedient : 
 (h) Holders of such preference shares shall be shareholders within 
 the meaning of this Act, and shall in all respects possess the 
 rights and be subject to the liabilities of shareholders within 
 the meaning of this Act ; provided, however, that in respect of 
 
HUlTISir COLUMIUA ACT. 
 
 321 
 
 (livideiids and otlierwiso, they shall, as H^ainst the original or 
 ordinary Bhareholders, be entitled to the i)reforence ^iven by 
 any special resolution as aforesaid : 
 
 ('•) Nothint? in this Hection shall affect or impair the rights of 
 creditors of any company. 
 
 IiiKiii' of sharcH without personal liabiliti/ hi/ MiniiKj Compdiiien, 
 
 ff6. The Memorandum of Association of a company incorporated or 
 re-incorporated under this Act, the objects whereof are restricted to 
 acquiriiif^, manafjinfi, developing, workinj^ and sollinj^ mines, mineral 
 claims, and mil ig properties, and the winninj^, j^fetting, treating, refin- 
 ing and marketing of mineral therefrom, may contain a provision that 
 no liability beyond the amount actually paid upon shares or stock in 
 such company by the subscribers thereto or holders thereof shall attach 
 to such subscriber or holder, and the Certificate of Incorporation issued 
 under section 20 of tliis Act shall state that the company is specially 
 limited under this section : 
 
 («) The license or certificate of registration to any extra-provincial 
 company (the objects whereof are restricted as aforesaid) issued under 
 the provisions of Tart VI. of this Act, may, if applied for in the appli- 
 cation for such license, or the petition for such registration, contain the 
 provision aforesaid : 
 
 57. Where a Certificate of Incorporation, incorporating any such 
 company, or a license or certificate of registration to any extra-provin- 
 cial company has been issued containing the provision mentioned in 
 section .50 of this Act, every certificate of shares or stock issued by the 
 company shall bear upon the face thereof, distinctly written or printed 
 ill red ink, after the name of the company, the words " Issued under 
 section 5(5 respecting Mining (Companies of the ' Companies Act, 1897,' '* 
 and where such shares or stoclc are issued subject to further assessmenta 
 the word " Assessable," or if not subject to further assessments, the 
 word " Non-assessable," as the case may be. 
 
 {5S. Every mining company, the Memorandum of Association of 
 which contains the said provision, shall have written or printed on its 
 charter, prospectuses, stock certificates, bonds, contractK, agreements, 
 notices, advertisements, and other ofWcial publications, and in all bills 
 of exchange, promissory notes, indorsements, cheques, and orders for 
 money or goods purporting to be signed by or on behalf of the company, 
 and in all bills of parcels, invoices, receipts and letterheads of the com- 
 pany, immediately after or under the name of such company, and shall 
 have engraved upon its seal the words "Non-Personal Liability;" and 
 every such company which refuses, or knowingly neglects, to comply 
 with this section shall incur a penalty of twenty dollars for every day 
 during which such name is not so kept written or printed, recoverable 
 upon suujmary conviction ; and every director and manager, secretary 
 W.S.D.M. — 21 
 
HI 
 
 322 SHAHKIKILDERS' AND DIUECTOHS' MANUAL. 
 
 and officer of the company who knowingly and wilfully authorizes or 
 pcrinita such default shall be liable to the like penalty. 
 
 50. In the event of any call or calls on assessable shares in a com- 
 pany so incorporated, remaining unpaid by the subscriber thereto, or 
 holder thereof, for a period of sixty days after notice and demand of 
 payment, such shares may be declared to be in default, and the secre- 
 tary of the company may advertise such shares for sale at public auction 
 to the highest bidder for cash, by giving notice of such sale in some 
 newspaper published or circulating in the city or district where the 
 principal office of the company is situated, for a period of one month ; 
 and said notice shall contain the number of the certificate or certificates 
 of such shares, and the number of shares, the amount of the assessment 
 due and unpaid, and the time and place of sale ; and in addition to the 
 publication of the notice aforesaid, notice sliall be personally served 
 upon such subscriber or holder by registered letter mailed to his last 
 known address ; and if the subscriber or holder of such shares shall fail 
 to pay the amount due upon such shares, with interest upon the same 
 and cost of advertising, before the time fixed for such sale, the secretary 
 shall proceed to sell the same or such portion thereof as shall suffice to 
 pay such assessment, together with interest and cost of advertising ; 
 provided that if the price of the shares so sold exceed the amount due 
 with interest and cost thereon, the excess thereof shall be paid to the 
 defaulting subscriber or holder. 
 
 00. No shareholder or subscriber for shares in any company so 
 incorporated, shall be personally liable for non-payment of any calls 
 made upon his shares, beyond the forfeiture and sale, in the event of 
 non-payment of such calls of the amount, if any, already paid on the 
 shares held or subscribed for, nor shall such shareholder or subscriber 
 be personally liable for any debt contracted by the company, or for any 
 sum payable by the company beyond the amount, if any, paid by him 
 upon such shares. 
 
 01. Wherever any shares have been heretofore issued by any com- 
 pany duly incorporated under any Act as fully paid-up shares, either at 
 a discount or in payment for any mine, mineral claim, or mining pro- 
 perty purchased or acquired by such company or for the acquiring 
 whereof such company has been incorporated, all such shares shall, 
 except as to any debts contracted by the company before the passing of 
 this Act (in regard to which the liability on such shares shall be the 
 same as if this Act had not been passed), be deemed and held to be fully 
 paid-up, and the holder thereof shall be subject to no personal liability 
 thereon, in the same manner as if the Memorandum of Association of 
 the company had contained the provision aforesaid. 
 
 Adjustment of Calls and Dividends. 
 
 03. Nothing contained in this Act shall be deemed to prevent any 
 company incorporated under this Act, if authorized by its regulations as 
 
BRITISH COLUMIJIA ACT. 
 
 323 
 
 (iin- 
 >r at 
 pro- 
 ring 
 liall, 
 of 
 the 
 fully 
 lility 
 in of 
 
 any 
 lis as 
 
 originally framed, or as altered by special resolution, from doing any one 
 or more of the following things, namely : — 
 
 (1) Making arrangements on the issue of shares for a difference 
 
 between the holders of such shares in the amount of calls to be 
 paid, and in the time of payment of such calls : 
 
 (2) Accepting from any member of the company wlio assents 
 
 thereto the whole or a part of the amount renuiining unfiaid on 
 any share or shares held by him, either in discharge of the 
 amount of a call payable in respect of any other share or shares 
 held by him, or without any cull having been made. 
 
 (3) Paying dividend in proportion to the amount paid up on each 
 
 share in cases where a larger amount is paid up on some shares 
 than on others. 
 
 Snhdivinion of filiarei. 
 03. Any company limited by shares may, by special resolution, 
 so far modify the conditions contained in its Memorandum of Associa- 
 tion, if authorized so to do by its regulations as originally framed or 
 as altered by special resolution, as by subdivision of iis e.Kisting shares, 
 or any of them, to divide its capital, or any part thereof, into shares of 
 smaller amount than is fixed by its Memorandum of Association : 
 
 (2) Provided that, in the subdivision of its existing shares, the 
 proportion between the amount which is paid and the amount (if any) 
 which is unpaid on each share of reduced amount shall be the same as 
 it was in the case of the existing share or shares from which the share 
 of reduced amount is derived. 
 
 <I4. The statement of the number and amount of the shares into 
 which the capital of the company is divided, contained in every copy 
 of the Memorandum of Association or other ofiicial document issued 
 after the passing of any such special resolution, shall be in accordance 
 with such resolution ; and any company which maltes default in 
 complying with the provisions of this section shall, upon summary 
 conviction, be liable to a penalty not exceeding five dollars for each 
 copy in respect of which such default is made; and every director, 
 manager, secretary and officer of the company who knowingly or 
 wilfully authorizes or permits any such default shall, upon summary 
 conviction, be liable to the like penalty. 
 
 Share Warrants to Ih'urer. 
 05. In the case of a company limited by shares, the company, if 
 authorized to do so by its regulations as originally framed, or as 
 altered by special resolution, and subject to the provisions of such 
 regulations, may, with respect to any share which is fully paid up, or 
 with respect to stock, issue under their common seal a warrant stating 
 that the bearer of the warrant is entitled to the share or shares or 
 stock therein specified, and may provide, by coupons or otherwise, for 
 
I 
 
 324 
 
 SHAKEIIOLDEHS AND DIIIKCTOUS MANUAL, 
 
 the payment of the future dividends on the share or shares or stock 
 included in Huoh warrant, hereinafter referred to as a share warrant. 
 
 06- A share warrant shall entitle the bearer of such warrant to 
 the shares or stock specified in it, and such shares or stock may be 
 transferred by the delivery of the share warrant. 
 
 67. The bearer of a share warrant shall, subject to the rogulationa 
 of the company, be entitled, on surrenderinf^ such warrant for cancel- 
 lation, to have his name entered as a member in the ltef»ister of Mem- 
 bers, and the company shall bo responsible for any loss incurred by 
 any person by reason of the company enterin;^ in its Register of Mem- 
 bers tlie name of any bearer of a share warrant in respect of the 
 sliares or stock specified therein, without the share warrant being sur- 
 rendered and cancelled. 
 
 68. The bearer of a share warrant may, if the refjnlations of the 
 company so provide, be deemed to be a member of tlie company within 
 the meaning of this Act, either to the full extent or for such purposes 
 as may be prescribed by the regulations : 
 
 (2) Provided that the bearer of a share warrant shall not be quali- 
 fied in respect of the shares or stock specified in such warrant for being 
 a director or manager of the company in cases where such a qualifica- 
 tion is prescribed by the regulations of the company. 
 
 60. On the issue of a share warrant in respect of any share or stock 
 the company shall strike out of itd Register of Members the name of 
 the member then entered therein as holding such share or stock, as if 
 he had ceased to be a member, and sliall enter in the register the 
 following particulars : — 
 
 (1) The fact of the issue of the warrant : 
 
 (2) A statement of the shares or stock included in the warrant, 
 
 distinguishing each share by its number: 
 
 (3) The date of the issue of the warrant : 
 
 and until the warrant is surrendered the above particulars shall be 
 deemed to be the particulars which are required by the thirty-seventii 
 section of this Act to be entered in the Register of Members of a com- 
 panv : and on the surrender of a warrant the date of such surrender 
 shall be entered as if it were the date at which a person ceased to be a 
 member. 
 
 TO. After the issue by the company of a share warrant the annual 
 summary required by the thirty-eighth section of this Act shall con- 
 tain the following particulars : The total amount of shares or stock 
 for which share warrants are outstanding at the date of the summary, 
 and the total amount of share warrants which have been issued and 
 surrendered respectively since the last summary %vas made, and the 
 number of shares or amount of stock comprised in each warrant. 
 
 
HUITISH COLUMIUA ACT. 
 
 325 
 
 Reduction of Capital and Share». 
 
 "71. Any company limited by Hharea may, by special resolution, so 
 fur modify the conditions contained in its Memorandum of Association, 
 if authorized so to do by its regulations as orit{inully framed, or as 
 altered by special resolution, as to reduce its capital ; but no such 
 resolution for reducing the capital of any company shall come into 
 operation until an order of the Court is registered by the Registrar as is 
 hereinafter mentioned : 
 
 (2) The power to reduce capital conferred by this section shall 
 include paid-up capital, and a power to cancel any lost capital, or any 
 capital unrepresented by available assets, or to pay ol'f any capital 
 which may be in excess of the wants of the company ; and paid-up 
 capital may be reduced either with or without extinguishing or reducir.g 
 the liability (if any) remaining on the shares of the company, and 
 to the extent to which such liability is not extinguished or reduced it 
 shall be deemed to be jjteserved. 
 
 72- I'wvery company shall, after the date of the passing of at:y 
 special resolution for reducing its capital, add to its name, until such 
 date as the Supreme Court may fix, the words " and reduced," as the 
 last words in its name, and tiioae words shall, until such date, be 
 deemed to be part of the name of the company. 
 
 73. A company which has passed a special resolution for reducing 
 its capital may apply to the Supreme Court, by petition, for an order 
 confirming the reduction, and on the hearing of the petition, the Court, 
 it satisfif'l that with respect to every creditor of the company who 
 under th( provisions of this Act is entitled to object to the reduction, 
 ■either his consent to the reduction lias been obtained, or his debt or 
 claim lias been discharged or has determined, or has been secured as 
 hereinafter provided, may make an order contirtning the reduction on 
 such terms and subject to such conditions as it deems tit : 
 
 (2) Provided that where the reduction of the capital of a company 
 <loc8 not involve either the diminution of any liability in respect of un- 
 paid capital or the payment to any shareholder of any paid-up capital : 
 
 (a) The creditors of the company shall not, unless the Court other- 
 wise direct, be entitled to object or required to consent to the 
 reduction ; and 
 
 {b) It shall not be necessary before the presentation of the petition 
 for confirming the reduction to add, and the Court may, if it 
 thinks it expedient so to do, dispense altogether with the addi- 
 tion of the words " and reduced : " 
 
 (3) In any case that the Court thinks fit so to do, it may require 
 the company to publish, in such manner as the Court may direct, tiie 
 reasons for the reduction of its capital, or such other information in 
 regard to the reduction of its capital as the Court may think expedient, 
 
mm. 
 
 i 
 
 
 32(3 
 
 SHAUEHOLDEUS AND DIKKOTOIIS MANUAL. 
 
 with a view to ^ive proper informution to tlie public in relation to the 
 reduction of its capital by a company, and, if the Court thinkfl tit, the 
 causes which led to sucli reduction. 
 
 74. Where a company propoHcH t« reduce itH capital every creditor 
 of the company who at the date lixod by tiie ('ourt is entitled to any 
 debt or claim which, if tiiat date were the commencement ol' the wind- 
 ing-up of tho company, would ho admisHiblo in proof against the coni- 
 pany, Mhall be entitled to object to the proprmed reduction, ami to be 
 entered in the Hat of creditors who are so entitled to object : 
 
 (2) The Court Hhall settle a list of such creditors, and for that pur- 
 pose shall RHCortain as far as poHsiblo, without r(>(|uirin^ an ap)>licati()n 
 from any creditor, the names of such creditors, and the nature and 
 amounts of their debts or claims, and may publish notices fixing a cer- 
 tain day 111- (lays within which creditors of the company who are not 
 entered on the list are to claim to be so entered, or to be exuludod from 
 the right of objecting to the proposed reduction. 
 
 7t5. Where a creditor whose name is entered on the list of creditors, 
 and whose debt or claim is ngt discharged or determined, does not con- 
 sent to the proposed reduction, the (!ourt may (if it think fit) dispense 
 with such consent on the company securing the payment of the debt or 
 claim of such creditor by setting apart and appropriating, in such manner 
 as the C!()urt may direct, a sum of such amount as is hereinafter men- 
 tioned (that is to say): 
 
 (1) If the full amount of the debt or claim of the creditor is 
 admitted by the company, or though not admitted is such as 
 the company are willing to set apart ami appropriate, then the 
 full amount of the debt or claim shall be set apart and appro- 
 priated : 
 
 (2) If the full amount of the debt or claim of the creditor is not 
 admitted by the company, and is not sucli as the company are 
 willing to set apart and appropriate, or if the amount is con- 
 tingent or not ascertained, then the Court may, if it think fit, 
 incjuire into and adjudicate upon the validity of such debt or 
 claim, and the amount for which the company may be liable in 
 respect thereof, in the same manner as if the company were 
 being vor.nd up by the Court, and the amount fixed by the 
 Court on such inquiry and adjudication shall be set apart and 
 appropriated. 
 
 76. The Registrar, upon the production to him of an order of the 
 Supreme Court confirming the reduction of the capital of a company^ 
 and the delivery to him of a copy of the order, and of a minute (approved 
 by the Court) showing with respect to the capital of the company, as 
 altered by the order, the amount of such capital, the number of shares 
 in which it is to be divided, the amount of each share, and the amount 
 (if any) at the date of the registration of the minute, proposed to b& 
 
 t. 
 
I 
 
 lUUTISH COLUMBIA ACT. 
 
 327 
 
 deeine(l to Itftvp been paid up on eat-li sluvre, hIihII rem'ster tlio order and 
 mimito, and on the ret^iHtnition the Hpecial resolntion conlirnied by tlie 
 order ho re^^iHtercd hIwiII take effect. 
 
 (2) Notice of hucIi re({iHtration hIiuU be publiuhed in such manner as 
 tbe Court nniy direct. 
 
 (8) The Uej^istrar shall certify under Imh hand the registration of 
 the order and nunnto, and liia cortitlcate shall bo conclusive evidence 
 that all the ri'((uisition8 of this Act with respect to the reduction of 
 capital iiavc been coni|)lied with, and tiiat the capital of the company is 
 Huch as is stated in the minute. 
 
 77- Tite minute when registered shall be deemed to be substituted 
 for the correspondinj; part of the Memorandum of Association of tlie 
 company, and shall be of the same validity and subject to the sanui 
 alterations as if it had been ori>{inally c(jntainud in the Memorandum of 
 Association ; and, subject as in this Act mentioned, no menjber of the 
 company, whether past or present, shall bi; liable in respect of any share 
 to any call or contril)ution e.xceedinf,' in amount the difference (if any) 
 between the amount which has been paid on such share and the amount 
 of the sliare as fixed by the minute. 
 
 78- If any creditor who is entitled, in respect of any debt or claim, 
 to object to the reduction of the capital of a company under this Act is, 
 in consequence of his if^norance of the proceediri^ts taken with a view to 
 such reduction, cr of their nature and effect with respect to his claim, 
 not entered on the list of creditors, and after such reduction the company 
 is unable, within the space of three weeks after demand made, to pay to 
 the creditor the amoull^ of such debt or claim, every person who was a 
 member of the company at the date of the registration of the order and 
 minute relating to the reduction of the capital of the company, shall be 
 liable to contribute for the payment of such debt or claim, an amount 
 not exceediuf^ the amount wiiich he would have been liable to contribute 
 if the company had commenced to be wound up on the day prior to 
 Buch registration ; and, on the company beiuf,' wound up, the Court, on 
 the application of such creditor, and on proof that he %vas ignorant of 
 the proceedings taken with a view to the reduction, or of their nature and 
 effect with respect to his claim, may, if it think fit, settle a list of such 
 contributories accordingly, and make and enforce calls and orders on the 
 contributories settled on such list in tbe same manner in all respects as 
 if they were ordinary contributories in a winding-up; but the provisions 
 of this section shall not affect the rights of the contributories of the com- 
 pany among themselves. 
 
 79. A minute, when registered, shall be embodied in every copy of 
 the Memorandum of Association issued after its registration ; and if any 
 company makes default in complying with tlie provisions of this section 
 it shall, upon summary conviction, be liable to a penalty not exceeding 
 five dollars for each coijy in respect of which such default is made, and 
 
328 
 
 SHAUEHOLDEUS AND DIllECTOliS MANUAL. 
 
 'Sn 
 
 ifj 
 
 
 :-i 
 
 every director, manager, secretary and officer of the company who shall 
 knowingly and wilfully authorize or permit such default shall, upon 
 summary conviction, be liable to the like penalty. 
 
 80. If any director, manager or officer of a company wilfully con- 
 ceals the name of any creditor of the comt ,ny who is entitled to object 
 to the proposed reduction, or wilfully misrepresents the nature or 
 amount of the debt or claim of any creditor of the company, or if iiny 
 director or manager of the company aids or abets in or is privy to any 
 such concealment or misrepresentation as aforesaid, every such director, 
 manager, or officer shall, for every such offence, upon summary convio- 
 tion, be liable to a penalty not exceeding five hundred dollars. 
 
 81. Any company limited by shares may so far modify the conditions 
 contained in its Memorandum of Association, if authorized so to do by 
 its regulations as originally framed, or as altered by 8p3cial resolution, 
 as to reduce its capital by cancelling any shares which, at the date of the 
 passing of !,"';h resolution, have not been taken, or agreed to be taken by 
 any person; anl the provisions of the ten next preceding sections of this 
 Act shall not apply to any reduction of capital made in pursuance of 
 this section. 
 
 Change of Name. 
 
 82. When a company is desirous of changing its name, the Lieu- 
 tenant-Governor, upon being satisfied tliat the company is in a solvent 
 condition, that the change is desired not for any improper purpose, and 
 is not otherwise objectionable, that the change has been spnctioned by a 
 special resolution of the company, and that the notice hereinafter pro- 
 vided has been duly given, may by Order in Council change the name of 
 the company to some other name set forth in the said Order. 
 
 (2) The company shall give at least three months' previous notice 
 in the British Colinnbia Giuette, and in some newspaper pub- 
 lished or circulated in the locality in which the operations of 
 the company are carried on, of the intention to apply for the 
 change of name, and shall state the name proposed to be adopted. 
 
 (3) Such change shall be conclusively established by the insertion 
 in the Ilritislt Columbia Uuzette of a notice thereof by the Pro- 
 vincial Secretary. 
 
 8!l. No contract or engagement entered into by or with the com- 
 pany, an I no liability incurred by it, shall be affected by the change of 
 name ; and all suits commenced by or against the company prior to the 
 change of name may be proceeded with against or by the company under 
 its former name. 
 
UHITISH roLUMlUA ACT. 
 
 329 
 
 PART IV. 
 
 Manaoement and Ai>MiNisTnATiox OF Companies and Associations cndek 
 
 THIS Act. 
 
 Provisions for Protection of Creditors. 
 
 84. Every company under this Act shall have a re{»i8tereil oflice 
 within the Province, to which all communications and notices may be 
 addressed. If any company under this Act carries on buainesf without 
 having such an office, it shall, upon summary conviction, he liable to a 
 penalty not exceediufj twenty-five dollars for every day during which 
 business is so carried on. 
 
 85. Notice of the situation of such rejjistered office, and of any 
 chanf,'e therein, shall be given to the Registrar, and recorded by him. 
 lentil such notice is given, the company shall not be deemed to have 
 complied with the provisions of this Act with respect to having a 
 registered office. 
 
 80. Every limited company under this Act, whether limited by 
 shares or by guarantee, shall paint or affix, and shall keep painted or 
 affixed, its name on the outside of every office or place in which the busi- 
 ness of the company is carried on, in a conspicuous position, in letters 
 easily legible, and shall have its name engraven in legible characters on 
 its seal, and shall have its name mentioned in legible characters in all 
 notices, advertisements, and other official publications of such company, 
 and in all bills of excliange, promissory notes, indorsements, cheques, 
 and orders for money or goods purporting to be signed by or on behalf 
 of such company, and in all bills of parcels, invoices, receipts, and letters 
 of credit of the company. 
 
 87. If any limited comjjany under this Act does not paint or affix, 
 and keep painted or affixed, its name in manner directed by this Act, it 
 shall, upon summary conviction, be liable to a penalty not exceeding 
 twenty-five dollars for not so painting or affixing its name, and for every 
 day during which such name is not so kept painted or affixed ; and every 
 director and manager of the company who shall knowingly and wilfully 
 authorize or permit such default shall, upon summary conviction, be 
 liable tc the like penalty ; and if any director, manager, or officer of such 
 company, or any person on its behalf, uses or authorizes the use of any 
 seal puri)orting to be a senl of the company whereon its name is not so 
 eiit^raven as aforesaid, or issues or authorizes the issue of any notice, 
 advertisement, or other official publication of such company, or signs, or 
 authorizes to be signed on behalf of such company, any bill of exchange, 
 promissory note, indorsement, cheque, order for money or ycods, or 
 issues or authorizes to be issued any bill of parcels, invoice, receipt, or 
 letter of credit of the company, wherein its name is not mentioned in 
 maimer aforesaid, he shall, upon summary conviction, be liable to a 
 
330 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 4 I 
 
 penalty of two hundred and fifty dollars, and shall further be personally 
 liable to the holder of any such bill of exchanj^e, promissory note 
 cheque, or order for money or goods, for the amount thereof, unless the 
 same is duly paid by the company. 
 
 88. Every company under this Act shall keep a Register of all 
 mortgages and charges specifically affecting property of the company, 
 and shall enter in such Register in respect of each mortgage or charge 
 a short description of the property mortgaged or charged, the amount 
 of charge created, and the names of the mortgagees or persons entitled 
 to such charge. If any property of the company is mortgaged or 
 charged without such entry as aforesai.: Leing made, every director, mana- 
 ger, or other officer of the company wlio knowingly and wilfully authorizes 
 01- permits the omission of such entry shall, upon summary conviction 
 be liable to a penalty not exceeding two hundred and fifty dollars. The 
 Register of 'Mortgages required by this section shall be open to inspec- 
 tion by any creditor or men.ber of the company at all reasonable times ; 
 and if such inspection is refused, any officer of tlie company refusing 
 the same, and every director and manager of the company authorizing 
 or knowingly and wilfully permi ting such refusal shall, upon .summary 
 onviction, be liable to a penalty not exceeding twenty-five dollars, and a 
 further penalty of ten dollars for every day during which such refusal 
 continues ; and in addition to the above penalty, any Judge of the 
 Supremo Court sitting in Chambers may, by summary order, compel an 
 immediate inspection of the Register. 
 
 8J). Every company under this Act shall keep at its registered 
 office a Register containing the names and addresses and the occupations 
 of its directors or managers, and shall send to the Registrar a copj' of 
 such Register, and shall from time to time notify the Registrar of any 
 change that takes place in such directors or managers. 
 
 90. If any company under this Act makes default in keeping a 
 Register of its directors or managers, or in sending a copy of such 
 Register to the Registrar in compliance with the foregoing rules, or 
 in notifying to the Registrar any change that takes place in such direc- 
 tors or managers, such delinquent company shall, upon summary con- 
 viction, be liable to a penalty not exceeding twenty-five dollars for every 
 day during wliich such default continues ; and every director and man- 
 ager of the company who shall knowingly and wilfully authorize or 
 permit such default shall, upon summary conviction, be liable to the 
 like penalty. 
 
 91. If any company under this Act carries on business when the 
 number of its members is less than five for a period of six months after 
 the number has been so reduced, every person who is a member of such 
 company during the time that it so carries on business after such 
 period of six months, and is cognizant of the fact that it is so carrying on 
 business with fewer than five members, shall be severally liable for the 
 
BRITISH CULUMiJIA ACT. 
 
 331 
 
 
 payment of the whole dehts of the company contracted during such 
 time, and may be sued for the same, without the joinder in the action or 
 suit of any other member. 
 
 NoticeH, Summons, Actions, Etc, 
 
 92. In an action or other proceedinf^, it shall not be requisite to set 
 forth tlie mode of incorporation of the company, otherwise tluvn by 
 mention of it under its corporate name, as incorporated or re-incorpo- 
 rated under this Act; and the Memorandum and Articles of Association 
 of the company, or any exemplification, or copy thereof certified under 
 tlie hand and seal of the Rej^istrar, or any copy of the Gazftte containing 
 such Memorandum and Articles of Association shall be conclusive proof 
 of every matter and thing therein set forth. 
 
 93. A copy of any resolution or special resolution of the company 
 under its seal, and purporting to be signed by any officer of the com- 
 pany, or as to any special resolution filed with the Registrar, a copy 
 certified under his hand and seal shall be received as prima facie 
 evidence of such resolution or special resolution in all Courts in British 
 Columbia. 
 
 9-4. Any summons, notice, order or other process or document 
 requiring to be served upon the company may, in addition to any other 
 method of service from time to time provided by any Act, Ordinance or 
 Rule of Court in that behalf, be served by leaving the same at the head 
 office of the company with any adult person in the employ of the com- 
 pany, or on the president or secretary of the company, or by leaving the 
 same at the domicile of either of them, or with any adult person of iiis 
 family or in his employ, or if the company has no head office and has no 
 known president or secretary, the Court may order such publication as it 
 deems requisite to be made in the premises, and such publication shall be 
 held to be due service upon the company. 
 
 95. Any summons, notice, order or proceeding requiring authenti- 
 cation by the company may be sigmd by any director, manager or 
 other authorized officer of the company, and need not be under the seal 
 of the company. 
 
 96. Any description of action may be prosecuted and maintained 
 between the company and any shareholder tltereof, and no shareholder 
 shall, by reason of being a shareholder, be incompetent as a witness 
 tlierein. 
 
 Provisio7is for Protection of Members. 
 
 97. Every company formed under this Act shall hold a general 
 meeting within four months after its Memorandum of Association is 
 registered ; and if such meeting is not held the company shall, upon 
 summary conviction, be liable to a penalty not exceeding twenty-live 
 dollars a day for every day after the expiration of such four mouths 
 
332 
 
 SIIAltEHOLDEUS' AND DIRECTORS' MANUAL. 
 
 until the meeting is held ; and every director or manager of the com- 
 pany, and every subscriber of the Memorandum of Association, who 
 knowingly authorizes or permits such default shall, upon summary con- 
 viction, be liable to the like penalty. 
 
 9H. A general meeting of every company under this Act shall be 
 held once at the least in every year. 
 
 Of* Subject to the provisions of this Act, and to the conditions 
 contained in the Memorandum of Association, any company formed 
 under this Act may, in general meeting, from time to time, by passing a 
 special resolution in manner hereinafter mentioned, alter all or any of 
 the regulations of the company contained in the Articles of Association 
 or in the table marked A in the First Schedule, where such table is 
 applicable to the company, or make new regulations to the exclusion of 
 or in addition to all or any of the regulations of the company ; and any 
 regulations so made by spa cial resolution shall be deemed to be 
 regulations of the company of the same validity as if they had been 
 originally contained in the Articles of Association, and shall be subject 
 in like manner to be altered or modified by any subsequent special 
 resolution. 
 
 100. A resolution passed by a company under this Act shall be 
 deemed to be special whenever a resolution has been passed by a 
 majority of not less than three-fourths of such members of the com- 
 pany for the time being entitled, according to the regulations of the 
 company, to vote as may be present, in person or by pro.xy (in cases 
 where, by the regulations of the company, proxies are allowed), at any 
 general meeting of which notice specifying the intention to propose 
 such resolution has been duly given, and such resolution has been 
 confirmed by a majority of such members for the time being entitled, 
 according to the regulations of the company, to vote as may be present, 
 in person or by proxy, at a subsequent general meeting, of which 
 notice has been duly given, and held at an interval of not less than 
 fourteen days nor more than one month from the date of tiie meeting 
 at which such resolution was first passed. At any meeting mentioned 
 in this section, unless a poll is demanded by at least five members, a 
 declaration of the chairman that the resolution has been carried shall 
 be deemed conclusive evidence of the fact, without proof of the number 
 or proportion of the votes recoi'ded in favour of or against the same. 
 Notice of any meeting shall, for the purposes of this section, be deemed 
 to be duly given and the meeting to be duly held whenever such 
 notice is given and meeting held in manner prescribed by the regula- 
 tions of the company. In computing the majority under this section, 
 when a poll is demanded, reference shall be had to the number of votes 
 to whicii each menjber is entitled by the regulations of the company. 
 
 101. In default of any regulations as to voting, every member shall 
 have one vote ; and in default of any regulations as to summoning 
 
HUrriSH COIX'MHIA ACT, 
 
 8:^3 
 
 general meetings, a meeting shall be lield to be duly summoned of 
 which seven days' notice in writing has been served on every member 
 in manner in which notices are required to bo served by the table 
 marked A in the First Schedule hereto; and in default of any regula- 
 tions as to the persons to summon meetings, live members shall be 
 competent to summon the same ; and in default of any regulations as to 
 who is to be chairman of such meeting, it shall be competent for any 
 person elected by the members present to preside, 
 
 lOS, A copy of any special resolution that is passed by any com- 
 pany under this Act siiall be printed and forwarded to the Registrar, 
 and be recorded by him. If such copy is not so forwarded within 
 fifteen days from tlio date of the confirmation of the roHolution, the 
 company shall, upon summary conviction, be liable to a penalty not 
 exceeding ten dollars for every day after the expiration of sucli fifteen 
 days during which such copy is omitted to be forwarded ; and every 
 director, manager and oflicer of the company who shall knowingly and 
 wilfully authorize or permit such default shall, upon summary convic- 
 tion, be liable to tlie like penalty. 
 
 ]0«l. Where Articles of Association have been registered, a copy of 
 every special resolution for the time being in force shall be annexed to 
 or embodied in every copy of the Articles of Association that may be 
 issued after the passing ot such resolution. Where no Articles of 
 Association have been registered, a copy of any special resolution shall 
 be forwarded in print to any member requesting the same, on payment 
 of twenty-five cents, or such less sum as the company may direct ; and 
 if any company makes default in complying with the provisions of 
 this section it shall, upon summary conviction, bo liable to a penalty not 
 exceeding five dollars for each copy in respect of which such default is 
 made; and every director and manager of the company who shall know- 
 ingly and wilfully authorize or permit such default shall, upon summary 
 conviction, be liable to the like penalty. 
 
 104- Any company under this Act may, by instrument in writing 
 under its common seal, empower any person, either generally or in 
 respect of any specified matter.s, as its attorney to execute deeds on 
 its belmlf in any place situate within or without the limits of this 
 ProviiiLC ; and every deed signed by such attorney, on behalf of the 
 company, and under his seal, shall be binding on the company, and 
 have the same effect as if it were under the common seal of the com- 
 pany. 
 
 Iiinpectoiii. 
 
 ]0<S. The Lieutenant-Governor in ("onncil may appoint one or 
 more competent Inspectors to examine into the affairs of any company 
 under this Act, and to report thereon, in such manner as the Lieutenant- 
 Governor in Council may direct, upon the applications following, tiiat is 
 to say : — 
 
 (1) In the case of any company that has a capital divided into 
 shares, upon the application of members holding not less than 
 
334- 
 
 SHAllEHOLnEKS AND DIRECTORS MANUAL. 
 
 one-fifth part of the whole shares of the company for the time 
 bein^ issued ; 
 (2) In tlie case of any company not having a capital divided into 
 Rhares, upon the application of members being in number not 
 less than one-fifth of the whole number of persons for the time 
 being entered on the register of the company as members. 
 
 106. The application shall be supported by such evidence as the 
 Lieutenant-Governor in Council may recjuire for the purpose of 
 showing that the applicants have good reason for requiring such investi- 
 gation to be made, and that they are not actuated by malicious motives 
 in instituting the same; the Lieutenant-Governor in Council may also 
 require the applicants to give security for payment of the costs of the 
 inquiry before appointing any Inspector or Inspectors. 
 
 107. It shall be the duty of all officers and agents of the company to 
 produce for the examination of the Inspectors all books and documents 
 in their custody or power. Any Inspector may examine upon oath 
 the officers and agents of the company in relation to its business, and 
 may administer such oath accordingly. If any officer or agent refuses 
 to produce any book or document hereby directed to be produced, or 
 to answer any question relating to the affairs of the company, he shall, 
 upon summary conviction, be liable to a penalty not exceeding twenty- 
 five dollars in respect of each offence. 
 
 108. Upon the conclusion of the examination the Inspectors shall 
 report their opinion to the Lieutenant-Governor in t,ouncil. A copy 
 shall be forwarded by the Provincial Secretary to the registered office of 
 the company, and a furth r copy shall, at the request of the members 
 upon whose application the inspection was made, be delivered to them, 
 or to any one or more of them. All expenses of and incidental to any 
 such examination as aforesaid shall be defrayed by the members upon 
 whose application the Inspectors were appointed, unless the Lieutenant- 
 Governor in Council shall direct the same to be paid out of the assets of 
 the company, which he is hereby authorized to do. 
 
 109- Any company under this Act may by special resolution 
 appoint Inspectors for the purpose of examining into the affairs of the 
 company. The Inspectors so appointed shall have the same powers 
 and perform the same duties as Inspectors appointed by the Lieutenant- 
 Governor in Council, with this exception, that instead of making their 
 report to the LiertenantGovernor in Council they shall make the same 
 in such manner and to such persons as the company in general meeting 
 directs ; and tiie officers and agents of the company shall incur the same 
 penalties, in case of any refusal to produce any book or document hereby 
 required to be produced to such Inspectors, or to answer any question, 
 as they would have incurred if such Inspector had been appointed by the 
 Lieutenant-Governor in Council. 
 
HIUTISH COLL'MHIA ACT. 
 
 335 
 
 110. A copy of the report of any Inspectors appointed under tliis 
 Act, authenticated by the seal of the company into whose affairs they 
 have made inspection, shall be admissible in any lej^al proceeding, as 
 evidence of the opinion of the Inspectors in relation to any matter con- 
 tained in such report. 
 
 Progpectun, 
 
 111. Every prospectus issued by or on behalf of any company or 
 intended company shall state the date on wliich it was issued, and that 
 date shall be taken for all purposes as the date of publication : 
 
 (2) A copy of every such prospectus shall be signed by every person 
 who is named therein as a director or proposed director of tlie company, 
 or by his duly authorized anient, and shall be filed with the Registrar on 
 or before the date of its publication. 
 
 (3) If default is made in complying with the requirements of this 
 section, every ofli-ier and af^ent of the company who is a party to the 
 issue of the prospectus shall, upon summary conviction, be liable to a 
 flue not exceeding twenty-live dollars for every day during which the 
 d'jfault continues. 
 
 112.— (1) Every prospectus of a company must state — 
 
 (a) the contents of the IMemoranduin of A ssociatioii witii the names, 
 occupations, and addresses of the _;iiatories, and the number 
 of share-J subscribed for by them respectively ; and 
 
 (/() the number of shares, if any, fixed by the Articles of Associa- 
 tion as the qualification of a director ; and 
 
 ((•) the names, occupations and addresses of the directors or pro- 
 posed directors, and the number of shares lield or agreed to be 
 taken by them respectively, and whether any such share is held 
 or agreed to be taken by any of them otherwise than in his own 
 right as beneficial owner ; and 
 
 ((/) the minimum subscription on which the directors may proceed 
 to commence business, and the minimum amount payable on 
 application and allotment on each share ; and 
 
 (f) the number and amount of shares and debentures issued or 
 agreed to be issued as fully or partly paid up otherwise than in 
 cash, and in the latter case the extent to which they are so paid 
 up, and in either case the consideration for wliich such shares 
 or debentures have been issued or are proposed or intended to 
 be issued ; and 
 
 (f) the names and addresses of the vendors of any property pur- 
 chased or acquired by the company, or proposed so to be pur- 
 chased or acquired, which is to be paid for wholly or partly out 
 of the pr • eeds of the issue offered for subscription by the pro- 
 spectus, or the purchase or accjuisition of which has not been 
 completed at the date of publication of the prospectus, and 
 
336 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 I! 
 
 ii ! 
 
 
 where there is more than one vendor or the company is a sub- 
 purchaser, the amount payable in cash, shares or debentures to 
 each vendor ; and 
 
 {g) tlie amount (if any) payable as purchase money in cash, shares 
 or debentures, of any sucli property as aforesaid, specifying the 
 amount payable for f;ood-\vill, if any such amount is separately 
 payable ; and 
 
 (hj the amount (if any) payable as commission for subscribing or 
 agreeing to subscribe, or procuring or agreeing to procure sub- 
 scriptions, for any shares in the company, or the rate of any 
 such conmiission ; and 
 
 (/) the amount or estimated amount of preliminary expenses ; and 
 
 (./■) the amount intended to be paid to any promoter and the con- 
 sideration for which it is to be paid ; and 
 
 (k) the amount intended to be reserved for working capital ; and 
 
 (/) the dates, parties, and short purport or effect of every material 
 contract and every material fact known to any director or 
 promoter of the company who is a party to the issue of the 
 prospectus, and a reasonable time and place at which any 
 material contract or a copy thereof may be inspected : Provided 
 that this I'ecjuirement shall not apply to a contract entered into 
 in the ordinary course of business carried on or intended to be 
 carried on by the company, or to any contract entered into more 
 than five years before the date of pul lication of the prospectus ; 
 and 
 
 (m) the names and addresses of the auditors (if any) of the company. 
 
 (2) F or the purposes of tiiis section every perpon shall be deemed to 
 be a vendor who has entered into any contract, absolute or conditional, 
 for the sale or purchase, or for any option of purchase, of any property 
 to be acquired by the company, in any case where — 
 
 (a) the purchase money is not fully paid at the date of publication 
 of the prospectus ; or 
 
 {!)) the purchase money is to be paid or satisfied, wholly or in part, 
 out of tlie proceeds of the issue offered for subscription by the 
 prospectus ; or 
 
 (c) the contract depends for its fulfilment on such issue. 
 
 Legal Proceedings. 
 
 113 Every company under this Act shall cause minutes of all 
 resolutions and proceedings of general meetings of the company, and of 
 the directors or managers of the company in cases where there are 
 directors or managers, to be duly entered in books to be from time to 
 time provided for the purpose; and any such minute as aforesaid, if 
 purporting to be signed by the chairman of the meeting at which such 
 resolutions Were passed or proceedings had, o. by the chairman of the 
 
IJIUTISH COLUMHIA ACT. 
 
 337 
 
 next Bucceodiiif^ meetin><, Bhall be received as evidence in all le^al pro- 
 ceed in j^a ; and until the contrary Ih proved, every (general uieetinj^ of the 
 company or meetinfi of directors or managers in respect of the proceed- 
 iiif^s of which minutes liave been so made shall be deemed to have been 
 duly held and convenrd, and all resolutions passed thereat or proceed- 
 ings had, to have been duly passed and had, and all appointments of 
 directors, nuina^ers, or li(iuidators shall bo deenuul to be valid, and all 
 acta done by such directors, managers, or liquidators shall be valid, 
 notwithstanding any defect that may afterwards be discovered in 
 their appointments or (lualitications. 
 
 114. Where a company under this Act is plaintiff in any action, 
 suit, or other legal proceeding, any Judge having jurisdiction in the 
 matter may, if it appears by any credible testimony that there is reason 
 to believe that if the defendant be successful in his defence the assets of 
 tiio company will bo insutVicient to pay his costs, re(juire suDicient 
 security to be given for such costs, and may stay all proceedings until 
 such security is given. 
 
 115. In any action or suit brought by a compony under this Act 
 aj,'ain8t any member to recover any call or other moneys due from such 
 member in his character of member, it shall not be necessary to set 
 forth the special matter, but it shall be suflicient to allege that the de- 
 feudent is a member of the company, and is indebted to the company 
 in respect of a call made or other moneys due whereby an action or suit 
 hath accrued to the company. 
 
 Notices. 
 
 116. Any summons, notice, order, or other document required to be 
 served upon the company, may be served by leaving the same, or sending 
 it through the post in a prepaid letter addressed to the company, at 
 their registered ofiice, or in such other manner as may from time to time, 
 by any Statute or Kules of Court for the time being in force, be per- 
 mitted or prescribed. 
 
 117. Any document to bo served by post on the company shall be 
 posted in such time as to admit of its being delivered in the due course 
 of delivery within the period (if any) prescribed for the service thereof ; 
 and in proving service of such document it shall be suflicient to prove 
 that such document was properly directed, and that it was put as a pre- 
 paid letter into the post ofiice. 
 
 118. Any summons, notice, order, or proceeding requiring authen- 
 tication by the company may be signed by any director, secretary, or 
 other authorized officer of the company, and need not be under the com- 
 mon seal of the company, and the same may be in writing or in print, 
 or partly in writing and partly in print. 
 
 W.S.D.M. — 22 
 
.S8H 
 
 SHAItKHor-DKHS AND DIHKCTOHS MANUAL. 
 
 Arbitration. 
 
 119- Any company under tliis Act may from time to time, by 
 writing inuler itH common seal, aj^ree to refer and nuiy refer to arbitra- 
 tion, in accordance witli tbe "Arbitration Act, IWIU," any existinj,' or 
 future difference, question, or other matter wluvtHoever in dispute be- 
 tween itself and any otlier comi)any or person, and the companies parties 
 to the arbitration may delegate to the person or persons to whom the 
 reference is made power to settle any terms or to determine any matter 
 capable of beinj^ lawfully settled or determined by the companies them- 
 selves, or by the directors or other numagintj body of such companies. 
 
 120. All the provisions of the "Arbitration Act, 1898," shall be 
 deemed to apply to arbitrations between companies and persons in 
 pursuance of this Act. 
 
 Alteration of Formg. 
 
 131. The forms set forth in the Second Schedule hereto, or forms 
 as near thereto as circumstances admit, shall be used in all matters to 
 which such forms refer. The Lieutenant-Governor in Council may 
 from time to time make such alterations in the tables and forms con- 
 tained in the First Schedule hereto, so that it does not ir.crease the 
 amount of fees payable to the Rejiistrar in the said Schedule mentioned, 
 and in the forms in the Second Schedule, or make such additions to the 
 last-mentioned forma, as may be requisite. Any such table or form, 
 when altered, shall be published in the lirit'.sh Columbia Gazette, and 
 upon such ))ublication being made such table or form shall have the 
 same force as if it were included in the Schedule to this Act ; but no 
 alteration made by the Lieutenant-Governor in Council in the table 
 marked A, contained in the First Schedule, shall affect any company 
 registered prior to the date of such alteration, or repeal, as respects such 
 company, any portion of such table. 
 
 PART V. 
 Borrowing Powers of Companies Under this Act. 
 
 122. All companies under this Act shall have power, subject to the 
 conditions of and in addition to all other powers conferred by this Act, 
 to borrow money for the purpose of carrying out the objects of their 
 respective incorporations, and to execute mortgages of their real and 
 personal property, to issue debentures secured by mortgage or otherwise, 
 to sign bills, notes, contracts, and other evidences of, or securities for 
 money borrowed or to be borrowed by them for the purpose aforesaid, 
 and to pledge debentures as security for temporary loans. 
 
 (2) These powers shall not be exercised except with the sanction of 
 a special resolution of the company previously given in general meeting. 
 
HltlTISM <(»l,r.MlllA ACT. 
 
 ;i:{!) 
 
 PART VI. 
 
 LiCENKINO AND RKdlHTBATION or ExTIlA-PllOVINCIAI, CoMI'ANlRH. 
 
 13it. UiilesH otherwiBe provided by any Act, no cxtraprovincitil 
 company having ^ai" for its purpose and object, ahall curry on any 
 business within the scope of tliis Act in tliis Province unless and until 
 it shall have been duly licensed or registered under this Act, and there- 
 by become expressly authorized to carry on such of its business as is 
 specified in the license or certificate of ref^istration, and no company, 
 firm, broker or other person shall as the representative or agent of, or 
 acting in any other capacity for any such extra-provincnil company- 
 carry on any of its business within this Province until such conipany 
 shall have obtained such license or certificate of registration ; and any 
 such company which fails or neglects to obtain such license or certifi- 
 cate of registration, shall incur a penalty of fifty dollars, recoverable 
 upon summary conviction for every day during which it carries on 
 business in contravention of this section ; i)rovided that this section 
 shall not apply until the first day of January, 1898, to any extra- 
 provincial company carrying on business within this Province on the 
 date of the passage of this Act, and further provided that proof as to 
 compliance with this section shall at all times be upon the company. 
 
 134. Any extra-provincial company, duly incorporated under the 
 laws of Great Britain or Ireland, or of the Dominion of Canada, or of 
 the late Province of Canada, or of any of the Provinces of Caiuula, duly 
 authorized by its charter and regulations to carry out or effect any of 
 the purposes or objects to which the legislative authority of the Legis- 
 lature of British Columbia extends, may obtain a license from the 
 Registrar authorizing it to carry on business within this Province on 
 compliance with the provisions of this Act, and on payment to the 
 Registrar in respect of the several matters mentioned in tlie table 
 marked li in the First Schedule hereto the several fees therein specified, 
 and shall, subject to the provisions of the charter and regulations of the 
 company and to the terms of the license, thereupon have the same 
 powers and privileges in this Pros ince as if incorporated under the 
 provisions of this Act. 
 
 133. Any extra-provincial insurance company, incorporated under 
 the laws of Great Britain or Ireland, or of the Dominion of Canada, 
 or of the late Province of Canada, or of any of the Provinces of (!anada, 
 may, upon complying with the requirements of this Act, apply for and 
 obtain from the Registrar a license under the provisions of this Act, 
 empowering it to purchase real estate, and to loan and invest its 
 moneys in manner and to the extent permitted by the charter and 
 regulations of the company. 
 
 126. Any such license obtained by any such insurance company 
 before the first day of January, 1898, shall be deemed to have ratified 
 
•MO 
 
 SII.\l{i;il<>M)i:i!S AMI ItlltKC'IOItS .M.Wl'AI.. 
 
 !;■ 
 
 and contirnied all proviotiH actH of tlio (lonipaiiy, and Hhall ho conHtruud 
 an if Hucli liconso had been granted buforo huo'i company invoHtud any 
 money in thia Province. 
 
 127. Before the iHBue of a license to any Buoh extra-provincial 
 company, the company shall file in the office of the lie^^istrar — 
 
 {(i) A trno copy of the clmrter mid rennlations of the company, 
 verified in manner satisfactory to the Uo^istrar, and showintj 
 that the company by its charter has authority to carry on 
 business in the Province of IJritish ("olumbia : 
 
 {h) An atHidavit or statutory dcchiration that tlie company is 
 still in existence and legally authorized to transact business 
 under its charter : 
 
 (c) A copy of the last balance sheet of the company and auditor's 
 report thereon : 
 
 (d) A duly executed power of attorney, under its common seal, 
 empowerin{i{ some person therein named, and residing in the 
 city, or place where the head otTicc of the company in thi 
 Province is situate, to act as its attoniuy and to sue and be sued, 
 plead or be impleaded in any Court, and, generally on behalf of 
 such company and within the Province, to accept service of 
 process and to receive all lawful notices, and to do all acts and 
 to execute all deeds and other instruments relating to the 
 matters within the scope of the power of attorney and of the 
 company to give to its attorney, and such company may from 
 time to time, by a new or other power of attorney, executed and 
 deposited as aforesaid, appoint another attorney within the Pro- 
 vince for the purposes aforesaid to replace the attorney 
 formerly appointed. The power of attorney may be according 
 to a form approved of and provided by the Registrar. 
 
 12W. The license shall set forth the corporate name of the com- 
 pany, the place where the head office of the company is situate, the 
 objects for which the company has been established and licensed, the 
 amount of the capital of the company, and the number of shares into 
 which the same is divided, and the amount of each share, the place 
 where the head ofHce of the company in this Province is situate, and the 
 name, address and occupation of the attorney of the company ; and 
 such certificate shall be published for four weeks in the (Suzette and in 
 one newspaper published or circulating in the place at which the head 
 office of the company in this Province is situate, and in the district 
 wherein the company proposes to carry on business, at the expense of 
 the company ; and such license shall bo conclusive evidence that all the 
 requirements of this Act have been complied with. 
 
 (a) Notice in like manner shall bo published in the Gazette and in a 
 newspaper as aforesaid of the appointment (if any) of a new attorney, 
 or of the ceasing of the company to carry on business within the 
 Province under its license. 
 
lUilllSlI <(»|,t .MItIA A("l'. 
 
 ;{n 
 
 l!31». Tlio liceiiHc, or iiiiy copy thereof cortilied under the Imiul iiml 
 Hcal of the Hef^iHtnir, or a copy of the (Inzctte coiitiiiiiiii^' Hiieh li(;enHe, 
 Hhall bo siitVuncnt evidence in any proeeediiifj in tiny Court in tliiH 
 Provinco of the due liconBin^ of the coiiipuny us aforesaid. 
 
 1!IO. If the power of iittoniey liereinbefore prescribed becomes 
 invahd or ineffectual from any reaHon, or if otlier service cannot bo 
 effected, tlie Court or Judj^e may order Hubstitutional service of any 
 process or iiroceediufj upon the company to be made by such publication 
 as is deemed re(juiHite to be made in the premises, for at least three 
 weeks in at least one newspaper; and such publication shall be hold to 
 be due service upon the company of such process or proceeding. 
 
 Ittl. The liieutenantdovernor in Council may. by an Order in 
 Council, to be published in tiiree consecutive issues of the (lazelte, 
 suspend or revoke and make null and void any license fivanted, under 
 this Part, to any company which refuses or fails to keep a duly 
 appointed attorney within the Province, or to comply with any of the 
 provisions of this Part, and, notwithstanding' such suspension or revoca- 
 tion, the ri'jlits of creditors of the company shall renuiin as at the time 
 of such suspension or revocation. 
 
 lieyislnilioii of Extra-Vrovinchil Companieg. 
 1!tS .^ny extra-[)rovincial comjjany, duly authorized by its charter 
 and re^^uliitions to carry out or effect any of the purposes or objects 
 to which the legislative authority of the Lej^islature of Pritish Colum- 
 bia extends, may re<;ister the company as a company under tliis Act 
 on compliance with the provisions thereof, and on paymcmt to the 
 Registrar in respect of the several matters mentioned in the table 
 marked B in the First Schedule hereto the several fees therein specified, 
 and such company shall, subject to the provisions of the charter and 
 regulations of the company, and of this Act, thereupon have the same 
 powers and privileges in this Province as if incorporated under the pro- 
 visions of this Act. 
 
 ]tt<t. Any extra-provincial company, desiring to become registered 
 as a company under this Act a> aforesaid, nnty jjetitlon therefor under 
 the common seal of the company , and with such petition shall file in the 
 office of the Registrar — 
 
 (a) A true copy of tha charter and regulations of the company 
 verified in nnmner satisfactory to the Registrar, and showing 
 that the company by its charter has authority to carry on 
 business in the Province of British Columbia : 
 
 (6) An affidavit or statutory declaration that the said company is 
 still in existence and legally authorized to transact business 
 under its charter : 
 
 (f) A copy of the last balance sheet of the company and auditor's 
 report thereon : 
 
:H'2 HIIAKKHOLDEUS' AND DlKKCTOKs' MA^'l^\L. 
 
 ((/) A duly executed power of attorney, under its common seiil^ 
 enipoweriiif4 some person therein named, and residinij in the 
 city, or place where the head office of tlie company in this 
 Province is situate, to act a.s its attorney and to sue and be sued, 
 plead Of be impleaded in any Court, and, fjenerally on behalf 
 of e"ch company and within the Province, to accept service of 
 pre "ess and to receive all lawful notices, to issue and transfer 
 stock, and to do all acts and to execute all deeds and other 
 instruments relatiiif^ to the matters within the scope of the power 
 of attoruey and of t'v) company to give to its attorney, and such 
 company may from time to time, by a new or other power of 
 attorney executed and deposited as aforesaid, appoint another 
 attorney within the Province for the purposes aforesaid to 
 replace the attorney formerly appointed. The power of attorney 
 I may be according to a form approved of and provided by the 
 
 Registrar. 
 
 ]!tl. The Registrar shall issue to any extraprovincia company 
 registered under the foregoing provisions of this Act, a certificate of 
 registration, which shall set forth the corporate name of the company, 
 the place where the head ofiice of the company is situated, the objects 
 for which the company has been established and registered under this 
 Act, the amount of the capital of the company, and the numbrr of 
 shares into which the same is divided, and the amount of each share ; 
 the time of existence of the company if incorporated for a fixed period, 
 and in the case of a limited company, that the company is limited, and 
 in the case of a mining company, the liability of the members whereof 
 is specially limited under section ill) hereof, that th.e Company is so 
 specially limited under said section 5(5 ; tho place where the head office 
 of the company in this Province is situute, and the name, address and 
 occupation of the attorney of the company ; and such certificate shall 
 be published for four weeks in the Gazette, end in one newspaper pub- 
 lished or circulating in the place at which the head office of the com- 
 pany in this Province is situate, and in the district wherein the company 
 propose to carry on business, at the expense of the company ; and such 
 certificate of registration shall be conclusive evidence that all the require- 
 ments of this Act have been complied with. 
 
 (a) Notice in like manner shall bo published in the Gazette and in a 
 newspaper as aforesaid of the appointment (if any) of a -ew attorney, 
 or of the ceasing of the company to carry on business within the Province 
 under its said license. 
 
 lliSi. The certificate of registrai i, or any copy thereof certified 
 under the hand and 8ea,i of the ilegistrar, or a copy of the Gazette 
 containing sucii certific ite of registiation, shall be sufiicient evidence in 
 any proceeding in any Court in this Province of tb.e due registration 
 of the company as aforetiid. 
 
15IUTISH COLUMRIA ACT. 
 
 343 
 
 IIM If the power of attorney hereinbefore prescribed becomes 
 invalid or ineffectual from any reason, or if other service cannot bo 
 effected, the Coiul. or Judj^e may order substitutional servico of any 
 process or proceeding? upon the company to be made by K;ich 
 publication as is deemed requisite to be made in tlie premises, for at 
 least three weeks in at least one newspaper; and such puMicati,)ii shall 
 be held to be duo service upon the company of such process or pro- 
 ceedint?. 
 
 137' The Lieutenant-Governor in Council may, by an Order in 
 
 Council, to be published in three consecutive issues of the (lazclle, 
 suspend or cancel and make null and void any registration effected 
 under this Part, to any company which refuses or fails to keep a duly 
 appointed attorney within the Province or to comply with any of the 
 provisions of this Part, and, notwithstanding; such suspenHion or revoca- 
 tion, the rights of creditors of the company shall remain as at the time 
 of such suspension or cancellation. 
 
 General Provisiom appUjing to Kxtra-Provincial Coinpanie.i Licenned ov 
 
 Registered under thi.i Act. 
 
 13S. Any extra-provincial company licensed or registered under 
 this Part may sue and be sued in its corporate name, and if author- 
 ized so to do by its charter and regulations, may accpiire and hold 
 ands in British Columbia by gift, purchase, or as mortagees, or other- 
 wise, as fully and freely as private individuals, and may sell, lease, 
 mortgage, or otherwise alienate the same. 
 
 130. Every extra-provincial company registered as a company 
 under this Act shall, su'^ject to the provisions of its charter and regu- 
 lations, and of this .\ct, have and may exercise all the rights, powers, 
 and privileges by this Act granted to and conferred upon companies 
 incorporated thereunder; and every such extra-provincial company 
 and the directors, officers, and members thereof, shall be subject to, and 
 shall, subject as aforesaid, observe, carry out and perform every act, 
 matter, obligation, and duty by this Act prescribed and imposed upon 
 companies incorporated thereunder, or upon the directors, officers, and 
 members thereof. 
 
 140. Every extra-provincial company registered under this Part 
 shall, in and by the power of attorney hereinbefore prescribed, empower 
 its attorney to issue and transfer shares of the company : 
 
 (1) Every such extra-provincial company shall, at its hen.d ofl'ico or 
 c iief place of business in this Province, provide and keep in form and 
 manner provided by section 80 of tl-.is Act, a refj^ster of all stock issued 
 at such head office or chief place of business, ..nd of all transfers of 
 shares in the company made within this Province and presented for 
 record at sucli head office or chief place of business ; and every lawful 
 transfer of shares made by a member shall, upon entry and record on 
 

 344 
 
 SHAREHOLDEUS AND DIUECTOHS MANUAL. 
 
 I 
 
 such register, be valid and binding to all intents and purposes ; and every 
 act, matter or thing lawfully done by the attorney of the company pur- 
 suant to this section, shall be as valid and binding in all respects as if 
 done by the company or the directors, managers or officers of the com- 
 pany, pursuant to the provisions of the charter and regulations of the 
 company, and of this Act in that behalf. 
 
 141. Every extra-provincial company duly incorporated under the 
 laws of Great Britain or Ireland, or of the Dominion of Canada, or of 
 the late Province of Canada, or of any of the Provinces of Canada, hci"e- 
 tofore registered in f'is Province as a foreign company under the pro- 
 visions of any Act, may surrender to the Registrar the certificate of 
 registration of tlii; company issued under such .\ct, and obtain from him 
 a license under the provisions of this Part ; and for the purpose of 
 obtaining such license the surrender of such certificate of registration 
 shall be deemed to be a sufficient compliance with the requirements of 
 this Part. 
 
 142. Every extra-provincial company heretofore registered in this 
 Province as a foreign company under the provisions of any Act in that 
 behalf and entitled to obtain a license under this Part shall, unle.-s such 
 license be obtained on or before the first day of January, A.D. 1898, aud 
 every other extra-provincial company so registered shall, from and after 
 the passing of this Act, hold the certificate of such registration issued 
 to the company subject in every respect to the provisions of and as if the 
 same were a certificate issued under the provisions of this Part. 
 
 14«t. No act, matter, disposition or thing affecting the corporate 
 rights and property of the company within this Province, made, done or 
 executed by any extra-provincial company not entitled to obtain a 
 license under this Part, although valid by the laws of the country or 
 slate under which such company is incorporated, or permissible unc' j 
 its original corporate powers, shall be of any force or effect, or enforce- 
 able by action in any Court in this Province, unless such act, matter, 
 disposition or thing be within the rights, powers and privileges, granted 
 by, and done and exercised according to the provisions of this Act in 
 that behalf. 
 
 144. In case of any suit or other proceeding being commenced by 
 any extra-provincial company against any person or corporation residing 
 or carrying on business in this Province, such extra-provincial company 
 shall furnish security for costs, if demanded. 
 
 lis. Nothing contained in this Part of this Act shall authorize the 
 registration of a.iy Chinese company or association. 
 
BUITLSH COLUMBLA ACT. 
 
 345 
 
 i/.o the 
 
 PART VII. 
 
 Procesb Against UNREoisxEnED Foreion Companies. 
 
 146. In this Part the word " company " shall be construed to mean 
 any unlicensed and unregistered extra-provincial company, which has 
 done, entered into or made any Act, matter, contract, or disposition 
 giving to any person or company a right of action in any Court in this 
 Province. 
 
 147. Any writ or summons, plaint, injunction, or other legal pro- 
 ceeding duly issued, at the instance or suit of any person, by any com- 
 petent Cour^ ' *.he Province, or officer of such Court, may be served, as 
 against the couipany, by delivering the same at Victoria, to the Registrar 
 of the Supreme Court. 
 
 148- It shall be the duty of such Registrar to cause to be inserted, 
 in the four regular issues of the Ihitinh Columbia Gazette consecutively 
 following the delivery of such process to him, a notice of such process, 
 with a memorandum of the date of delivery, stating generally the nature 
 o.f the relief sought, and the time limited, and the place mentioned for 
 entering an appearance. 
 
 110- After such advertisement shall have appeared in such four 
 issues, the delivery of such process to the Registrar as aforesaid, shall 
 be deemed, as against the defendant company, to be good and valid ser- 
 vice of such process. 
 
 150. In entering up, applying for, or obtaining a judgment by de- 
 fault, or for the purpose of taking any proceeding consequ ..it or following 
 on such service, it shall not be necessary, so far as such service is con- 
 cerned, to iile any affidavit, but the plaintiff shall, instead thereof, file a 
 copy of each of the four issues of the IlritUh Columbia Gazette in which 
 the advertisement shall have appeared : Provided always, that wlien 
 service of process sliall have been effected as hereinbefore mentioned, the 
 plaintiff shall, and he is hereby required to prove the amount of the debt 
 or damages claimed by him in manner following, that is to say : If the 
 action shall have been brought in the Supreme Court, then before a jury, 
 or before a Judge, or before the Registrar, as a Judge of the said Court 
 may direct, or if the action shall have been brought in the County Court, 
 before the County Court Judge; and the making of such proof shall bo 
 a condition precedent to the plaintiff obtaining judgment. 
 
 151. In any action, suit, or proceeding against the company, it shall 
 not be necessary to aver in any pleading, or to adduce any evidence, that 
 the company was organized or incorporated under bhe laws of any 
 foreign state or jurisdiction, or that the company had power under its 
 organization or incorporation to make the contract or incur the liability 
 in respect of which the action, suit, or proceeding against the company 
 shall be brought. 
 
 W.S.D.M. — '22rt 
 
346 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 I 
 
 153- Nothing' in this Part contained shall be deemed to limit, 
 abridge, or take away any legal right, recourse, or remedy against a com- 
 pany not therein enacted or recognized, nor to absolve or lessen any 
 obligation, rule, or duty imposed by law on a company. 
 
 PART VIII. 
 Voluntary Winding Up. 
 158. A company under this Act may be wound up voluntarily — 
 
 («) Whenever the period, if any, fixed for the duration of the com- 
 pany by its Articles of Association expires, or whenever the 
 event, if any, occurs, upon the occurrence of which it is provided 
 by the Articles of Association that the company is to be dis- 
 solved, and the company in general meeting has passed a resolu- 
 tion requiring the company to be wound up voluntarily : 
 
 (h) Whenever the company has passed a special resolution requiring 
 the company to be wound up voluntarily : 
 
 (c) Whenever the company has passed a special resolution to the 
 effect that it has been proved to their satisfaction that the com- 
 pany cannot by reason of its liabilities continue its business, 
 and that it is advisable to wind up the same : 
 
 (2) A voluntary winding up shall be deemed to commence at the 
 time of the passing by the company of the resolution authorizing such 
 winding up : 
 
 (3) The provisions of the Acts of the Parliament of Canada, passed 
 respectively in the forty-ninth year of the reign of Her present Majesty, 
 chaptered one hundred and forty-nine and intituled " An Act respecting 
 Insolvent Banks, Insurance Companies, Loan Companies, Building Soci- 
 eties, and Trading Corporations ; " in the fifty-second year of the reign 
 of Her present Majesty, chaptered thirty-two and intituled " An Act to 
 amend ' The Winding Up Act,' chapter one hundred and twenty-nine of 
 the Revised Statutes ; " and in the fifty-fifth and fifty-sixth years of the 
 reign of Her present Majesty, chapterbd twenty-eight and intituled "An 
 Act further to amend ' The Winding Up Act," and all forms, rules and 
 rsgulations for the time being :n force, under and by virtue of section 92 
 of the said first-mentioned Act shall, so far as the same respectively are 
 applicable, apply to and govern all proceedings, practice, and procedure 
 relating to and occurring in any voluntary winding up of a company 
 under the provisions hereof. 
 
 154. Where a company limited by guarantee, and having a capital 
 divided into shares, is being wound up voluntarily, any share capital 
 that may not have been called up shall be deemed to be assets of the 
 company, and to be a specialty debt due from each member pf the 
 company to the extent of any sums that may be unpaid on any shares 
 held by him, and payable at such time as may be appointed by the 
 liquidators. 
 
BRITISH COLUMBIA ACT, 
 
 347 
 
 PART IX. 
 
 Pbotectino Porchasers of Stock from Losses ry Forged Thansferb, 
 AND THE Prevention of FuAnocLENT and Neolicient Practices. 
 
 Forged Tranitfers. 
 
 155 Where a company issue or have issued shares, stocks or securi- 
 ties transferable by an instrument in writing or by an entry in any books 
 or register kept by or on behalf of the company, they shall have power 
 to make compensation by a casli payment out of their funds for any loss 
 arising from a transfer of any such shares, stock or securities, in pursu- 
 ance of a forged transfer, or of a transfer under a forged power of attor- 
 ney, whether such loss arises, and whether the transfer or power of 
 attorney was forged before or after the passing of this Act, and whether 
 the person receiving such compensation, or any person tlirough whom he 
 claims, has or has not paid any fee or otherwise contributed to any fund 
 out of which the compensation is paid : 
 
 (2) Any company may, if they think fit, provide either by fees not 
 exceeding the rate of one dollar on every five hundred dollars transfer- 
 red, with a minimum charge equal to that for one hundred dollars, to be 
 paid by the transferee upon the entry of the transfer in the books of the 
 company, or by insurance, reservation of capital, accumulation of in- 
 come, or in any other manner which they may resolve upon, a fund to 
 meet claims for such compensation : 
 
 (3) For the purpose of providing such compensation any company 
 may borrow on the security of their property : 
 
 (4) Any such company may impose such reasonable restrictions on 
 the transfer of their shares, stock or securities, or with respect to powers 
 of attorney for the transfer thereof, as they may consider requisite for 
 guarding against losses arising from forgery : 
 
 (5) Where a company compensate a person under this Part for any 
 loss arising from forgery, the company shall, without prejudice to any 
 other rights or remedies, have the same rights and remedies against the 
 person liable for the loss as the person compensated would have had : 
 
 (6) Where the shares, stocks or securities of a company have by 
 amalgamation or otherwise become the shares, stock or securities of 
 another company, the last- mentioned company shall have the same 
 power under this Part as the original company would have had if it had 
 continued. 
 
 Fraudulent and Negligent Practices. 
 
 156. Where, after the passing of th'j Act, a prospectus or notice 
 invites persons to subscribe for shares in ^r debentures or debenture 
 stock of a company, every person who is a director of the company at 
 the time of the issue of the prospectus or notice, and every person who 
 having authorized such naming of him, is named in tl»e prospectus or 
 
348 
 
 SHAKEHOLDEKS AND DlllKcrroRS MANUAL. 
 
 notice as a director of the company, or as havirifj afjrecd to become 
 a director of the company, eitlier immediately or after an interval of 
 time, and every promoter of tlie company and every person who lias 
 authorized the issue of the prospectus or notice shall be liable to pay 
 compensation to all persons who shall subscribe for any shares, deben- 
 tures or debenture stock on the faith of such prospectus or notice for the 
 loss or dama(^e they may have sustained by reason of any untrue state- 
 ment in the prospectus or notice, or in any report or memorandum 
 appearin{» on the face thereof, or by reference incorporated therein or 
 issued therewith, unless it is proved — 
 
 (a) With respect to every such untrue statement not purportinf* to 
 be made on the authority of an expert, or of a public ofticial 
 document or statement, that he had reasonable jjround to 
 believe, and did up to the time of the allotment of the shares, 
 debentures or debenture stock, as the case may be, believe that 
 the statement was true ; and 
 
 (I) With respect to every such untrue statement purportin^^ to be 
 a statement by or contained in what purports to be a copy of 
 or extract from a report oi' valuation of an engineer, valuer, 
 accountant or other expert, that it fairly represented the state- 
 ment made by such engineer, valuer, accountant or other expert, 
 or was a correct and fair copy of or extract from the report or 
 valuation : Provided always, that notwithstanding that such 
 untrue statement fairly represented the statement made by such 
 engineer, valuer, accountant or other expert, or was a correct 
 and fair copy of an extract from the report or valuation, such 
 director, person named, promoter or other person who authorized 
 the issue of the prospectus or notice as aforesaid, shall be liable 
 to pay compensation as aforesaid, if it be proved that he had no 
 reasonable gi'ound to believe that the person making the state- 
 ment, report or valuation was competent to make it ; and 
 
 , (c) With respect to every such untrue statement purporting to be a 
 • statement made by an ofticial person or contained in what pur- 
 
 ports to be a copy of or extract from a public official document, 
 that it was a correct and fair representation of such statement, 
 or a copy of or extract from such document : 
 
 Or unless it is proved that having consented to become a director of the 
 company he withdrew his consent before the issue of the prospectus or 
 notice, and that the prospectus or notice was issued without his author- 
 ity or consent, and that on becoming aware of its issue he forthwith 
 gave reasonable public notice that it was so issued without his know- 
 ledge or consent, or that after the issu of such prospectus or notice and 
 before allotment thereunder, on becoming aware of any untrue state- 
 ment therein, withdrew his consent thereto, and caused reasonable 
 public notice of 9uch withdrawal, and of the reason therefor, to be given : 
 
niUTisH (•(t^^^MHl.\ act. 
 
 849 
 
 
 (2) A promoter, in tliis Hection, means a promoter wlio was a party 
 to the preparation of the prospectus or notice, or of the portion theteof 
 containinj^ sucli nntriie statement, but sliall not inchulc any person by 
 reason of his acting in a professional capacity for persons enf^aged in 
 procuring; the formation of tiie company ; 
 
 (3) Where any company existinj^ at tlie passing; of tliis Act, wliich 
 lias issued sliares or debentures, shall be desirous of obtainint,' further 
 capital by subscriptions for sliares or debentures, and for that purpose 
 shall issue a prospectus or notice, no director of such company shall be 
 liable in respect of any statement therein, unless he sliall have author- 
 ized the issue of such prospectus or notice, or have adopted or ratified 
 the same. 
 
 157. Where any such prospectus or notice as aforesaid contains the 
 name of a person as a director of the company or as havinji afjreed to 
 become a director thereof, and such person has not consented to become a 
 director, or has withdrawn his consent before the issue of such prospec- 
 tus or notice, or has not authorized or consented to the issue thereof, the 
 directors of the company, except any without whose knowledj^e or con- 
 sent the prospectus or notice was issued, and any other person who 
 authorized the issue of such prospectus or notice, shall bo liable to 
 indemnify the person named as a director of the company, or as having 
 agreed to become a director thereof as aforesaid, against all damages, 
 costs, charges and expenses to which he may be made liable by reason of 
 his name having been inserted in the prospectus or notice, or in defend- 
 ing himself against any action or legal proceedings brought against him 
 in respect thereof. 
 
 15S. Every person who by reason of his being a director, or named 
 as a director, or as having agreed to become a director, or of his having 
 authorized the issue of the prospectus or notice, has become liable to 
 make any payment under the provisions of this Act, shall be entitled 
 to recover contribution, as in cases of contract, from any other person 
 who, if sued separately, would have been liable to make the same pay- 
 ment. 
 
 150. Where any advertisement, letter-head, postal-card, account or 
 document issued, published or circulated by any corporation, association 
 or company, or any ofticer, agent or employee of any such corporation, 
 association or company, purports to state the subscribed capital of the 
 company, then the capital actually and in good faith subscribed, and no 
 more, shall bo so stated; and any such corporation, association, com- 
 pany, ofhcer, agent or employee who causes to be inserted an advertise- 
 ment in any newspaper, or who publishes, issues or circulates, or causes 
 to be published, issued or circulated, any advertisement, letter-head, 
 postal-card, account, or document, which states, as the subscribed capital 
 of such company, any larger sum than the amount of such subscribed 
 capital 80 actually and in good faith subscribed as aforesaid, or which 
 

 1 
 
 ■ 
 
 ) 
 
 350 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 contains any untrue or false statement, as to the incorporation, control, 
 supervision, management, or financial standing of sucli corporation, 
 association or company, and which statement is intended or calculated 
 or likely to mislead or deceive any person dealing or having; any busi- 
 ness or transaction with said corporation, association, or company, or 
 with any oflicer, agent or employee of the association, corporation or 
 company, shall, upon summary conviction, be liable to a penalty not 
 exceeding two hundred dollars and costs and not less thau fifty dollars 
 and costs, and in default of payment the offender, being any ofiicer, 
 agent or employee as aforesaid, shall be imprisoned, with or without 
 liard labour, for a term not exceeding three months and not less than 
 one month ; and on a second or any subsequent conviction ho may be 
 imprisoned with hard labour for a term not exceeding twelve months 
 and not less than three months. 
 
 \r 
 
 PART X. 
 
 Rkpeal of Formeu Enactments. 
 
 100. " The Companies Act," being chapter twenty-one of the Con- 
 solidated Acts, 1888 ; the " Companies Act Amendment Act, 1889 " ; 
 the "Companies Act, 1890"; the " Companies Act Amendment Act, 
 1891"; the "Companies Act (1890) Amendment Act, 1892"; the 
 "Companies Acts Amendment Act, 1893'"; the "Companies Acts 
 Amendment Act, 1894 " ; the " Fraudulent Statements Act, 1894 " ; and 
 the " Companies Act Amendment Act, 1895," are hereby repealed : 
 Provided — 
 
 (a) That such repeal shall not be held or taken to in any way alter, 
 limit or affect the corporate existence, rights, privileges, powers 
 and liabilities of any company incorporated under the said 
 repealed Acts or any or either of them : 
 
 (h) That the provisions of the Eighth Part of this Act, and of 
 sections 37, 38, 89, and 90 of this Act, shall apply to every 
 company incorporated under the said repealed Acts, or any or 
 either of them ; and 
 
 (c) That every company incorporated under the said repealed Acts, 
 or any or either of them, may dispose of the whole or any por- 
 tion of its assets, rights, powers, privileges, and franchise by 
 resolution duly passed to such efifect at a general or special 
 meeting of the shareholders representing at least two-thirds in 
 value of the paid-up capital of the company, which meeting 
 shall be held in the city, town or district where the company 
 has its chief place of business in the Province: Provided 
 always, that at least one month's notice of such meeting, sigred 
 by the secretary, or, in the event of his death or absence, by the 
 acting secretary, or if there be neither secretary nor acting 
 
BRinSH COLUMBIA ACT. 
 
 851 
 
 secretary, then by one of the trustees, shall be published in at 
 least four issues of the GazeUe, and of some newspaper published 
 in the city, town, or district aforesaid : Provided always, tliat 
 nothin({ herein contained shall be construed or alioweil to pre- 
 judice any claim against the corporation. - 
 
 Miscellaneous. 
 
 161. Notwithstandin({ anything to the contrary in section 4 of the 
 ' Mineral Act, 189*),' or section 4 of the ' Placer Mininf^ Act, IH'JI,' or 
 elsewhere in the said Acts or other the mining laws of the Province, no 
 free miner's certiticute shall be issued to a joint stock company for a 
 longer period than one year, and such certificate shall date from the 
 3Uth day of June in each year ; and every free miner's certificate held 
 by a joint stock company at the passing of this Act shall be valid and 
 existing until and shall expire on the 30th day of June, 18'J7. Upon 
 applying to renew any such certificate on or before said 30th day of 
 June, the joint stock company shall be entitled to a rebate of a propor- 
 tionate amount of the fee paid for a certificate heretofore issued 
 according to the furthc" time for which it would but for this section 
 have been valid. 
 
 Short Title. 
 
 108. This Act may be cited as the " Companies Act, 1897." 
 
 FIRST SCHEDULE. 
 
 TABLE A. 
 
 or 
 
 Regulations for Management of a Company Limited by Shares. 
 
 Share.:. 
 
 (1) If several persons are registered as joint holders of any shares, 
 
 any one of such persons may give effectual receipts for any 
 dividend payable in respect of such share. 
 
 (2) Every member shall, on payment of twenty-five cents, or such 
 
 less sum as the company in general meeting may prescribe, be 
 entitled to a certificate under the common seal of the company, 
 specifying the share or shares held by him, and the amount 
 paid up thereon. 
 
 (3) If such certificate is worn out or lost, it may be renewed on 
 
 payment of twenty-five cents, or such less sum as the company 
 in general meeting may prescribe. 
 
1* 
 
 ♦ 
 
 li''!!!It I 
 
 852 
 
 shareholders' and directors' manual. 
 
 Calls on Sharet. 
 
 (4) The (lirectorH may from time to time make Huch calls upon the 
 
 members in respect of all monovH unpaid on their sliarcH an 
 they think fit, provided that twenty-one days' notice at least is 
 j»iven of each call, and each member shall bo liable to pay the 
 amount of calls so made to the persons and at the time and 
 places appointed by the directors. 
 
 (5) A call shall be deemed to have been made at the time when the 
 
 resolution of the directors authorizing such call was passed. 
 
 (0) If the call payable in respect of any sluae is not paid before or 
 on the day appointed for payment thereof, the holder for 
 the time being of such share shall be liable to pay interest for 
 the same at the rate of five per cent, per annum from the day 
 appointed for the payment thereof to the time of the actual 
 payment. 
 
 (7) The directors may, if they think fit, receive from any member 
 
 willing to advance the same all or nny part of the moneys due 
 upon the shares held by him beyond the Kums actually called 
 for; and upon the moneys so paid in advance, or so much 
 thereof as from time to time exceeds the amount of the calls 
 then made upon the shares in respect of which such advance 
 has been made, the company may pay interest at such rate ae 
 the member paying such sum in advance and the directors 
 agree upon. 
 
 Transfers of Shares. 
 
 (8) The instrument of transfer of any share in the company shall 
 
 be executed both by the transferor and the transferee, and the 
 transferor shall be deemed to remain a holder of such share 
 until the name of the transferee is entered in the Register Book 
 in respect thereof. 
 
 (9) Shares in the company shall be transferred in the following 
 
 form : — 
 I, A, li., of in consideration of the sum of dollars 
 
 paid to me by C. D., ot do hereby transfer to the said 
 
 C. D. the share {or shares) numbered standing in my 
 
 name in the books of the Company, to hold 
 
 ' ■ unto the said C. D., his executors, administrators, and assigns, 
 subject to the several conditions on which I held the same at 
 the time of the execution hereof ; and I, the said C. D., do 
 liereby agree to take the said share (or shares) subject to the 
 same conditions. As witness our hands, the " ; day 
 
 of 
 
 (10) The company may decline to register any transfer of shares 
 made by a member who is indebted to them. 
 
BRITISH COLUMBIA ACT. 
 
 (11) The transfer books shall be closed during the fourteen >' 'ys 
 immediately preceding; the ordinary general meeting iu each 
 year. 
 
 Traiinmisiion of Shares, 
 
 (12) The executors or administrators of a deceased member shall be 
 the only persona recognized by the company as having any 
 title to his share. 
 
 (13) Any person becoming entitled to a share in consequence of the 
 death, bankruptcy, or insolvency of any member, or in conse- 
 quence of the marriage of any female member, may bo regis- 
 tered as a member upon such evidence being produced as may 
 from time to time be required by the company. 
 
 (11) Any person who has become entitled to a share in consequence 
 of the death, bankruptcy, or insolvency of any member, or iu 
 consequence of the marriage of any female member, may, 
 instead of being registered himself, elect to have some person, 
 to be named by him, registered as a tranferee of such share. 
 
 (15) The person so becoming entitled shall testify such election by 
 executing to his nominee an instrument of transfer of such 
 share. 
 
 (IG) The instrument of transfer shall be presented to the company, 
 accompanied with such evidence as the directors may require 
 to prove the title of the transferor, and thereupon the company 
 shall register the transferee as a member. 
 
 Forfeiture of Shares. 
 
 (17) If any member fails to pay any call on the day appointed for 
 payment thereof, the directors may, at any time thereafter 
 during such time as the call remains unpaid, serve a notice on 
 him requiring him to pay such call, together with interest and 
 any expenses that may have accrued by reason of such non- 
 payment. 
 
 (18) The notice shall name a further day on or before which such 
 call, and all interest and expenses that have accrued by reason 
 of such non-payment, are to be paid. It shall also name the 
 place where payment is to be made (the place so named being 
 either the registered office of the company or some other place 
 at which calls of the company are usually made payable). The 
 notice shall also state that in the event of non-payment at or 
 before the time and at the place appointed, the shares iu respect 
 of which such call was made will be liable to be forfeited. 
 
 (IK) If the requisitions of any srch notice as aforesaid are not com- 
 plied with, any share in respect of which such notice has been 
 given may, at any time thereafter, before payment of all calls, 
 
 W.B.D.M.— 23 
 
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 354< shareholders' and directors' manual. 
 
 interest, and expenses due in respect thereof has been made, 
 be forfeited, by a resolution of tlie directors to l hat effect. 
 
 (20) Any share so forfeited shall be deemed to be the property of 
 the company and may be disposed of in such manner as the 
 company in general meeting thinks fit. 
 
 (21) Any member whose shares have been forfeited shall, notwith- 
 standing, be liable to pay to the company all calls owing upon 
 such shares at the time of the forfeiture. 
 
 (22) A statutory declaration, in writing, that the call in respect of 
 a share was made and notice thereof given, and that default in 
 payment of the call was made, and that the fc feiture of the 
 share was made oy resolution of the directors to that etlect, 
 shall be sufticient evidence of the facts therein stated as against 
 all oersons entitled to such ^^hare ; and such declaration, and 
 the receipt of the company for the price of such share shall 
 constitute a good title to such share, and the certificate of pro- 
 prietorship shall be delivered to the purchaser, and thereupon 
 he shall be deemed tin holder of such share, discharged from 
 all calls due prior to such purchase, and he shall not be bound 
 to see to the application of the purchase money, nor shall his 
 title to such share be affected by any irregularity in the pro- 
 ceedings in reference to such sale. 
 
 Conversion of Shares into Stock. 
 
 (23) The directors may, with the sanction of the company previously 
 given in general meeting, convert any paid-up shares into 
 stock. 
 
 (24) When any shares have been converted into stock, the several 
 holders of such stock may thenceforth transfer their respective 
 interests therein, or any part of such interests, in the same 
 manner and subject to the same regulations as and subject to 
 which any shares in the capital of the company may be trans- 
 ferred, or as near thereto as circumstances admit. 
 
 (25) The several holders of stock shall be entitled to participate in 
 the dividends and profits of the company according to the 
 amount of their respe^tive interests in such stock; and such 
 interests shall, in proportion to the amount thereof, confer on 
 the holders thereof respectively the same privileges and ad van. 
 tages for the purpose of voting at meetings of the company, 
 and for other purposes, as would have been conferred by shares 
 of equal amount in the capital of the company ; but so that 
 none of Buch privileges or advantages, except the participation 
 in the dividends and profits of the company, shall be conferred 
 by any such aliquot part of consolidated stock as would not, if 
 existing in Bhares, have conferred suoh privileges or advantages* 
 
BRITISH COLUMBIA ACT. 
 
 855 
 
 Increate in Capital. 
 
 (26) The directors may, witli the sanction of a special resolution of 
 the company previously given in general meeting, increase its 
 capital by the issue of new shares, such agf^regate increase to 
 be of such amount, and to be divided into shares of such respec- 
 tive amounts, as the company in general meeting directs, or, if 
 no direction is given, as the directors think expedient. 
 
 (27) Subject to any direction to the contrary that may be given by 
 I the meeting that sanctions the increase of capital, all new shares 
 
 shall be offered to the members in proportion to the existing 
 shares held by them, and such offer shall be made by notice 
 specifying the number of shares to which the member is 
 entitled, and limiting the time within which the offer, if not 
 accepted, will be deemed to be declined ; and, after the expira- 
 tion of such time, or on the receipt of an intimation from the 
 member to whom such notice is given that he declines to accept 
 the shares offered, the directors may dispose of the same in such 
 manner as tliey think most beneficial to the company. 
 
 (28) Any capital raised by the creation of new shares shall be 
 considered as part of the original capital, and shall be subject 
 to the same provisions with reference to the payment of the 
 calls, and the forfeiture of shares on non-payment of calls, or 
 otherwise, as if it had been part of the original capital. 
 
 General Meetings. 
 
 (29) The first general meeting shall be held at such time, not being 
 more than four months after the registration of the company, 
 and at such place as the directors may determine. 
 
 (30) Subsequent general meetings shall be held at such time and 
 place as may be prescribed by the company in general meeting ; 
 
 1 and if no other time or place is prescribed, a general meeting 
 shall b^ held on the first Monday in February in every yc.*r. at 
 such place as may be determined by the directors. 
 
 (31) The above-mentioned general meetings shall be called orchnary 
 meetings ; all other general meetings shall be called extraor- 
 dinary. 
 
 (32) The directors may, whenever they think fit, and tliey shall 
 upon a requisition made in writing by not less than one-fifth 
 in number of the members of the company, convene an extra- 
 ordinary general meeting. 
 
 (33) Any requisition made by the members shall express the object 
 of the meeting proposed to be called, and shall be left at the 
 registered office of the company. 
 
 (34) Upon the receipt of such requisition, the directors shall forth- 
 with proceed to convene an extraordinary general meeting. If 
 
SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 hi 
 
 they do not proceed to convene the same within twenty-one 
 days from the date of the requisition, the requisitionists or 
 any other members amounting to the required number, may 
 themselvea convene an extraordinary general meeting. 
 
 Proceedings at General Meetings. 
 
 (35) Seven days' notice at the least, specifying the place, tho day, 
 and the hour of meeting, and in case of special business the 
 general nature of such business, shall be given to the members 
 in manner hereafter mentioned, or in such other manner, if 
 any, as may be prescribed by tlie company in general meeting ; 
 but the non -receipt of such notice by any member shall not 
 invalidate the proceedings at any general meeting. 
 
 (36) All budine&s shall be deemed special that is transacted at an 
 extraordinary meeting, and all that is transacted at an ordinary 
 meeting with the exception of sanctioning a dividend and the 
 consideration of the accounts, balance sheets, and the ordinary 
 report of the directors. 
 
 (37) No business shall be transacted at any general meeting, except 
 the declaration of a dividend, unless a quorum of members is 
 present at the time when the meeting proceeds to business ; 
 and such quorum shall be ascertained as follows, that is to 
 say :— If the persons who have taken shares in the company at 
 the time of the meeting do not exceed ten in number, the 
 quorum shall be five ; if they exceed ten, there shall be added to 
 the above quorum one for every five additional members up to 
 fifty, and one for every ten additional members after fifty, with 
 this limitation, that no quorum shall in any case exceed twenty. 
 
 (38) If within one hour from the time appointed for a meeting a 
 quorum is not present, the meeting, if convened upon the 
 requisition of members, shall be dissolved. In any other case 
 it shall stand adjourned to the same day in the next week, at 
 the same time and place ; and if at such adjourned meeting a 
 quorum is not present it shall be adjourned sine die. 
 
 (39) The chairman (if any) of the board of directors shall preside 
 as chairman at every general meeting of the company. 
 
 (40) If there is no such chairman, or if at any meeting he is not 
 present within fifteen minutes after the time appointed for 
 holding the meeting, the members present shall choose some one 
 of their number to be chairman. 
 
 (41) The chairman may, with the consent of the meeting, adjourn 
 any meeting from time to time and from place to place, but no 
 business shall be transacted at any adjourned meeting other 
 than the business left unfinished at the meetmg from which the 
 adjournment took place. 
 
 
15RITISH COLUMBIA ACT. 
 
 357 
 
 (42) At any general meeting, unless a poll is demanded by at least 
 five members, a declaration by the chairman that a resolution 
 has been carried, and an entry to that effect in the Book of 
 Proceedings of the company, sliall be sufficient evidence of the 
 fact, without proof of the number or proportion of the votes 
 recorded in favour of or agaixist such resolution. 
 
 (43) If a poll is demanded by five or more members it shall bo 
 taken in such manner as the chairman diiects, and the result 
 of such poll shall be deemed to be the resolution of the com- 
 pany in general meeting. In the case of an equality of votes 
 at any general meeting, the chairman shall be entitled to a 
 second or casting vote. 
 
 Votes of Members. 
 
 (44) Every me.nber shall havo one vote for every shaiC up to ten ; 
 he shall have an additional vote for every five shares beyond 
 the first ten shares up to one hundred, and an additional vote 
 for every ten shares beyond the first hundred shares. 
 
 (45) If any member is a lunatic or idiot he may vote by his com- 
 mittee, curator bonis, or other legal curator, 
 
 (46) If one or mor^ persons are jointly entitled to a share or shares, 
 the member whose name stands first in the register of members 
 as one of the holders of such share or shares, and no other, shall 
 be entitled to vote in respect of the same. 
 
 47) No member shall be entitled to vote at any general meeting 
 unless all calls due from him have been paid, and no member 
 shall be entitled to vote in respect of any share that he has 
 acquired by transfer at any meeting held after the expiration 
 of three months from the registration of the company, unless 
 he has been possessed of the share in respect of which he claims 
 to vote for at least three months previously to the time of 
 holding the meeting at which he proposes to vote. 
 
 (48) Votes may be given either personally or by proxy. 
 
 (49) The instrument appointing a proxy shall be in writing, under 
 the hand of the appointer, or if such appointer is a corporation, 
 under their common seal, and shall be attested by one or more 
 witness or witnesses. No person shall be appointed a proxy 
 who is not a member of the company. 
 
 (50) The instrument appointing a pi-oxy shall be deposited at the 
 registered office of the company not less than seventy-two hours 
 before the time for holding the meeting at which the person 
 named in such instrument proposes to vote, but no instrument 
 appointing a proxy shall be valid after the expiration of twelve 
 months from the date of its execution. 
 
'■* 
 
 h" , M 
 
 1 
 
 '1 
 
 ! 
 
 i 
 1 
 
 
 i 
 
 ' 
 
 358 shareholders' and directors' manual. 
 
 (51) Any instrument appointing a p' oxy shall be in the following 
 form : — 
 
 Company, Limited. 
 
 I , of , in the County of 
 
 being a member of the Company, Limited, and 
 
 entitled to vote (or votes), hereby appoint 
 
 of as my proxy, to vote for me and on my behalf at 
 
 the (ordinary or extraordinary, as the case may be) General 
 Meeting of the Company to be held on the day of 
 
 , and at any adjournment thereof (or at any meeting 
 of the Company that may be hcid in the year ). 
 
 As witness ray hand, this day of 
 
 Signed by the said in the presence of 
 
 Directors, 
 Directors. 
 
 (52) The number of the directors, and the names of the first direc- 
 tors, shall be determined by the subscribers of the Memorandum 
 of Association. 
 
 (53) Until directors are appointed the subscribers of the Memoran- 
 dum of Association sliall be deemed to be directors. 
 
 (54) The future remuneration of the directors and their remunera- 
 tion for services performed previously to the first general meet- 
 ing, shall be determined by the company in general meeting. 
 
 Powers of Directors. 
 
 (55) The business of the company shall be managed by the directors, 
 who may pay all expenses incurred in getting up and registering 
 the company, and may exercise all such powers of the company 
 as are not by the foregoing Act, or by these Articles, required 
 to be exercised by the company in general meeting, subject 
 nevertheless to any regulations of these articles, to the provi- 
 sions of the foregoing Act, and to such regulations, being not 
 inconsistent with the aforesaid regulations or provisions, as may 
 be prescribed by the company in general meeting ; but no 
 regulation made by the company in general meeting shall 
 invalidate any prior act of the directors which would have been 
 valid if such regulation had not been made. 
 
 (5C) The continuing directors may act notwithstanding any vacancy 
 in their body. 
 
 Disqualification of Directors. 
 
 (57) The office of director shall be vacated, — 
 
 If he holds any other office or place of profit under the company : 
 If he becomes bankrupt or insolvent : 
 
 If he is concerned in or participates in the profits of any con- 
 tract with the company ; 
 
BRITISH COLUi.IUIA ACT. 
 
 359 
 
 But the above rules ehall be subject to the following exceptions : 
 That no director shall vacate his office by reason of his being a 
 member of any company which has entered into coutracts with 
 or done any work for the company of which he is director ; 
 nevertheless he shall not vote in respect of such contract or 
 work ; and if he does so vote his vote shall not be counted. 
 
 notation of Directors. 
 
 (58) At the first ordinary meeting after the registration of the com- 
 pany the whole of the directors shall retire from office ; and at 
 the first ordinary meeting in every subsequent year one-third of 
 the directors for the time being, or if their number is not a 
 multiple of three, then the number nearest to one-third shall 
 retire from office. 
 
 (59) The one-third or other nearest number to retire during the 
 first and second years ensuing the first ordinary meeting of the 
 company shall, unless the directors agree among themselves, be 
 determined by ballot : in every subsequent year the one-third 
 or other nearest number who have been longest in office shall 
 retire. 
 
 (60) A retiring director shall be re-eligible. 
 
 (61) The company at the general meeting at which any directors 
 retire in manner aforesaid shall till up the vacated offices by 
 electing a like number of persons, 
 
 (62) If at any meeting at which an election of directors ought to take 
 place the places of the vacating directors are not filled up, the 
 meeting shall stand adjourned till the same day in the next week, 
 at the same time and place ; and if at such adjourned meeting 
 the places of the vacating directors are not filled up, the vacat- 
 ing directors, or such of them as have not had their places filled 
 up, shall continue in office until the ordinary meeting in the 
 next year, and so on from time to time until thoir places are 
 filled up : 
 
 (63) The company may from time to tinie, in general meeting, 
 increase or reduce the number of directors, and may also deter- 
 mine in what rotation such increased or reduced number is to 
 go out of office : 
 
 (64) Any casual vacancy occurring in the board of directors may be 
 filled up by the directors, but any person so chosen shall retain 
 his office so long only as the vacating director would have 
 retained the same if no vacancy had occurred. 
 
 (65) The company, in general meeting, may, by a special resolution, 
 remove any director before the expiration of his period of oftice, 
 and may by an ordinary resolution appoint another person in 
 his stead ; the person so appointed shall hold office during such 
 time only as the director in whose place he is appointed would 
 have held the same if he had not been removed. 
 
^M 
 
 a',\\h 
 
 1 
 
 M 
 
 i 
 
 '■!■''!' 
 
 
 V 
 
 360 shareholders' and directors' manual. 
 
 Proceedings of Directors. 
 
 (66) The directors may meet together for the dispatch of business, 
 adjourn, and otiherwise regulate their meetings as they think 
 fit, and determine the quorum necessary for tlie transaction of 
 business. Questions arisir.3 at any meeting shall be decided by 
 a majority of votes. In case of an equality of votes the chair- 
 man shall have a second or casting vote. A director may at 
 any time summon a meeting of the directors. 
 
 (67) The directors may elect a chairman of their meetings, and 
 determine the period for which he is to hold office ; but if no 
 such chairman is elected, or if at any meeting the chairman is 
 not present at the time appointed for holding the same, the 
 directors present shall choose some one of their number to be 
 chairman of such meeting. 
 
 (C8) The directors may delegate any of their powers to committees 
 consisting of such member or members of their body as they 
 tiiink fit. Any committee so formed shall, in the exercise of 
 the powers so delegated, conform to any regulationo that may 
 be imposed on them by the directors. 
 
 (09) A committee may elect a chairman of their meetings. If no 
 such chairman is elected, or if he is not present at the time 
 appointed for holding the same, the members present shall 
 choose one of their number to be chairman of such meeting. 
 
 (70) A committee may meet and adjourn a^ they think proper. 
 Questions arising at any meeting shall be determined by a 
 majority of votes of the members present ; and in case of an 
 equality of votes the chairman shall have a second or casting 
 vote. 
 
 (71) All acts done by any meeting of the directors, or of a committee 
 of directors, or by any person acting as a director, shall, not- 
 withstanding that it be afterwards discovered that there was 
 some defect in the appointment of any such directors or persons 
 acting as aforesaid, or that they or any of them were disqualified, 
 be as valid as if every such person had been duly appointed and 
 was qualified to be a director. 
 
 Dividends. 
 
 (72) The directors may, with the sanction of the company in general 
 meeting, declare a dividend to be paid to the members in pro- 
 portion to their shares. 
 
 (73) No dividend shall be payable except out of the profits arising 
 from the business of the company. 
 
 (74) The directors may, before recommending any dividend, set 
 aside out of the profits of the company such sum as they think 
 proper as a reserve fund to meet contingencies, or for equalizing 
 
HIUTISH COLUMBIA ACT. 
 
 361 
 
 dividends, or for repaiiing or maintaining the wo'-ka connected 
 with the business of the company, or any part thereof ; and the 
 directors may invest the sum so set apart as a veserve fund, 
 upon such Hccurities as they may select. 
 
 (75) The directors may deduct from the dividends payable to any 
 member all such sums of money as may be due from him to the 
 company on account of calls or otherwise. 
 
 (76) Notice of any dividend that may have been declared shall be 
 given to each member in manner hereinafter mentioned ; and 
 all dividends unclaimed for three years after having been 
 declared may be forfeited by the directors for the benefit of the 
 company. 
 
 (77) No dividend shall bear interest as against the company. 
 
 Accounts. • 
 
 (78) The directors shall cause true accounts to be kept, — 
 
 Of the stock in-trade of the company ; 
 
 Of the sums of money received and expended by the com- 
 pany, and the matter in respect of which such receipt and 
 expenditure takes place ; and 
 
 Of the credits and liabilities of the company ; 
 
 The books of account shall be kept at the registered office of 
 the company, and, subject to any reasonable restrictions as to 
 the time and manner of inspecting the same that may be 
 imposed by the company in general meeting, shall be open to 
 tho inspection of the members during the hours of business, 
 
 (79) Once at the least in every year the directors shall lay before 
 the company in general meeting a statement of the income and 
 expenditure for the past year, made up to a date not more than 
 three months before such meeting. 
 
 (80) The statement so made shall show, arranged under the most 
 convenient heads, the amount of gross income, distinguishing 
 the several sources from which it has been derived, and the 
 amount of gross expenditure, distinguishing the expense of the 
 establishment, salaries and other like matters. Every item of 
 expenditure fairly chargeable against the year's income shall 
 be brouglit into account, so that a just balance of profit and loss 
 may be laid before the meeting, and in cases where any item 
 of expenditure which may in fairness be distributed over several 
 years has been incurred in any one year the whole amount of 
 such item shall be stated, with the addition of the reasons why 
 only a portion of such expenditure is charged against the income 
 of the year. 
 
 (81) A balance sheet shall be made out in every year, and laid 
 before the company in general meeting, and such balance sheet 
 
862 
 
 SHAIIEHOI.DEIIS AND DIRECTORS MANUAL. 
 
 shall contain a summary of the property and liabilities of the 
 coiiij any arranged under the lieada appearing in the form 
 annexed to this table, or as near thereto aa circuinatancea 
 admit. 
 
 (82) A printed copy of such balance sheet shall, seven days pre- 
 viously to such meeting, be served on every member in the 
 manner in which notices are hereinafter directed to be served. 
 
 Atidit. 
 
 (83) Once at least in every year the accounts of the company shall 
 be examined, and the correctness of the balance sheet ascer- 
 tained by one or moro auditor or auditors. 
 
 (84) The first auditors ^hn .1 be appointed by the directors ; subse- 
 quent auditors shall be appointed by the company in general 
 raeet'ng. 
 
 (85) If one auditor only is appointed, all the provisions herein 
 contained relating to auditors shall apply to him. 
 
 (86) The auditors may be members of the company, but no person 
 is eligible as an auditor who is intei'ested otherwise than as a 
 member in any transaction of the company ; and no director or 
 other officer of the company is eligible during his continuance 
 in office. 
 
 (S7) The election of auditors shall be made by the company at their 
 
 ordinary meeting in each year. 
 (G8) The remuneration of the first auditors shall be fixed by the 
 
 directors ; that of subsequent auditors shall be fixed by the 
 
 company in general meeting. 
 
 (89) Any auditor shall be re-eligible on his quitting office. 
 
 (90) If any casual vacancy occurs in the office of any auditor 
 appointed by the company, the directors shall forthwith call an 
 extraordinary general meeting for the purpose of supplying the 
 same. 
 
 (91) If no election of auditors is made in manner aforesaid, the 
 Lieutenant-Governor in Council may, on the application of not 
 less than five members of the Company, appoint an auditor for 
 the current year, and fix the remuneration to be paid to him by 
 the company for his services. 
 
 (32) Every auditor shall be supplied with a copy of the balance 
 sheet, and it shall be his duty to examine the same, with the 
 accounts and vouchers relating thereto. 
 
 (93) Every auditor shall have a list delivered to him of all books 
 kept by the company, and shall at all reasonable times have 
 access to the books and accounts of the company. He may, at 
 the expense of the company, employ accountants or other 
 
IIUITISK COLUMBIA ACT. 
 
 363 
 
 persons to assist him in iuve8tigatin^' such accountfl, and lie 
 mfty, in relation to such accounta, examine the directors or any 
 other oflicer of the company. 
 
 (94) The auditors shall make a report to the members upon the 
 balance sheet and accounts, and in every such report they shall 
 state whether, in their opinion, the balance sheet is a full and 
 fair balance sheet, containing the particulars required by the^e 
 regulations, and properly drawn up so as to exhibit a true and 
 correct view of the state of the company's affairs, and in case 
 they have called for explanations or information from the 
 directors, whether such explanations or information have been 
 given by the directors, and whether they have been satisfactory ; 
 and such report shall be read, together with the report of the 
 directors, at the ordinary meeting. 
 
 Notices. 
 
 (95) A notice may be served by the company upon any member 
 either personally or by sending it through the post in a prepaid 
 letter addressed to such member at his registered place of abode. 
 
 (96) All notices directed to be given to the members shall, with 
 respect to any share to which persons are jointly entitled, be 
 given to wliichever of such persons is named first in the 
 Register of Members ; and notice so given shall be sufHcient 
 notice to all the holders of such share. 
 
 (97) Any notice, if served by post, shall be deemed to have been 
 served at the time when the letter containing the same would 
 be delivered in the ordinary course of the post ; and in proving 
 such service it shall be sufficient to prove that the letter con- 
 taining the notice was properly addressed and put into the post 
 office. 
 
 If! 
 
864 
 
 SHAUEHOLDEUS AND DIUECTOHS' MANUAL. 
 
 
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BUITISH COLUMBIA ACT. 
 
 SC) 
 
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 TABLE B. 
 
 Table or Fees to be paid to the Reoibtraii or Joint Stock Companibs 
 
 by a Company having a capital divided into shares. 
 For registration of a company whose nominal capital does not 
 
 exceed »10,(MM», a feeof »25 00 
 
 For registration of a company whose nominal capital exceeds 
 810,(K)0 the above fee of ^'2.'), witli the following additional 
 foes, regulated according to the amount of nominal capital ; 
 (that is to say), — 
 
 For every Jo.OOO of nominal capital, or part of 
 
 $5,000, after the first ff 10,000. np to »'2.-),0()0 ^5 00 
 For every <f.'),000 of nominal capital or part of 
 »5,000, after the first »'25,000, up to 
 
 »500,000 2 50 
 
 For every $5,000 of nominal capital, or part of 
 
 $5,000, after the first $500,000 ■ ■ - 1 25 
 For registration of any increase of capital made after the first 
 registration of the company, the same fees per $5,6(M) or 
 a part of $5,000, as would liave been payable if such 
 increased capital had formed part of the original capital at 
 the time of registration. 
 For a license to or registration of any extra-provincial com- 
 pany, the same fees as are payable for registering a new 
 company. 
 For registration under this Act of any existing company the 
 certificate of registration whereof is issued pursuant to 
 section 50 hereof, or the capital whereof is increased pur- 
 suant to section 5 {!>) hereof, in lieu of the fee of ten dollars 
 prescribed by section 5 of this Act, tlie same fees as are 
 payable for registering a nc v company hereunder, allow- 
 ing credit as part of such fees for the amount of fees paid 
 by such company in respect of its original registration. 
 For a license to or registra^^^ion under this Act of any extra- 
 provincial company already registered in this Province as 
 
 a foreign company 10 OJ 
 
 And, in addition thereto, if the license or certificate of 
 registration under this Act is issued pursuant to 
 section 56 hereof, the same fees as are payable for 
 registering a mw company hereunder, allowing 
 credit as part of sucii fees for the ivmount of fees 
 paid by such extra-provincial company in respect 
 of its original registration in this Province. 
 For a license to an extra- provincial insurance company under 
 
 section 125 of this Act 25 00 
 
 For registering any document hereby required or authorized to 
 
 be registered, other than the Memorandum of Association - 1 00 
 
Wi 
 
 366 
 
 shareholders' and directors' manual. 
 
 »1 00 
 
 1 
 
 
 < 
 
 
 
 
 1 } 
 
 
 
 
 
 
 
 
 ' 1 
 
 
 k 
 
 m 
 
 For making a record of any fact hereby authorized or required 
 to be recorded by the Registrar, a fee of - - . - 
 
 Publication in the Gazette, according to the scale of charges 
 as deiined in Schedule A of the " Statutes and Journals 
 Act." 
 
 TABLE C. 
 
 Table of Fees to be paid to the Keoistrar of Joint Stock Companies 
 by a Company not having a capital divided into shares. 
 
 For registration of a company whose number of members, as 
 
 stated in the Articles of Association, does not exceed 20 - $10 00 
 
 For registration of a company whose number of members, 
 as stated in the Articles of Association, exceeds 20, but 
 doer not exceed 100 25 00 
 
 For registration of a company whose number of members, as 
 stated in the Articles of Association, exceeds 100, but is not 
 stated to be unlimited, the above fee of $25 with an addi- 
 tional ?1 for every 50 members or less number than 50 
 members after the first 100. 
 
 For registration of a company in which the number of members 
 is stated in the Articles of Association to be unlimited, a 
 fee of 100 00 
 
 For registration of any increase on the number of members 
 made after the registration of the company in respect of 
 every 50 members, or less than 50 members, of such 
 increase 
 
 Provided that no one company shall be liable to pay on the 
 whole a greater fee tlian $100 in respect of its number of 
 members, taking into account the fee paid on the first 
 registration of the company. 
 
 For registering any document hereby required or authorized to 
 be registered, other than the Memorandum of Association 
 
 For making a record of any fact hereby authorized or required 
 to be lei-orded by the Registrar of Companies, a fee of 
 
 1 00 
 
 1 00 
 
 1 OO 
 
 SECOND SCHEDULE. 
 
 FORM A. 
 
 Memorandum of Association of a Company limited by shares. 
 
 Ist. The name of the Company is " The Eastern Steam Packet 
 Comp5,ny, Limited." 
 
 2nd. The registered office of the Compu,ny will be situate in 
 
 3rd. The objects for which the Company is established are " the 
 " cojiveyance of passengers and goods in ships or boats between such 
 "places as the Company may from time to time determine, and the 
 "doing all such other things as are incidental or conducive to the 
 " attainment of the above objects." 
 
BRITISH COLUMBIA ACT. 
 
 367 
 
 4th. The liability of the members is limited, 
 
 5th. The capital of the Company is j „ 
 
 divided into shares of ^ ,. ^'■^' 
 
 w„ *u , snares of dollars each. 
 
 We the several persons whose names and addresses are sub.scribed are 
 desirous of being formed into a Company, in pursuance of 'th s 
 Memorandum of Association, and we respectively aRree to take 
 the number of shares in the capital of the Company set opposite 
 our respective names. opposite 
 
 " 1. John Jones of 
 "2. John Smith of 
 "3. Thomas Green of 
 " 4. John Thomson of 
 " 5. Caleb White of 
 
 in the County of Merchant, 
 
 in the County of _ 
 
 in tlie County of 
 
 in tlie County of 
 
 in the County of 
 
 Total shares taken — _i 
 
 Number of 
 shares taken 
 
 by each 
 subacribor. 
 
 200 
 25 
 30 
 40 
 15 
 
 310 
 
 Dated the (j^y 
 
 Witness to the above signatures. 
 ^•^•' No. Street, 
 
 November, 189 , 
 
 British Colombia. 
 
 FORM B. 
 
 Memorandcm and Abtici.es of Association of a Company limited by 
 guarantee and not having a capital divided into shares. 
 
 Memorandum of Association. 
 
 Ist^ The name of the Company is the " Mutual London Marine 
 Association, Limited." iianne 
 
 2nd. The registered office of the Company will be situate in 
 _ 3rd. The objects for which the Company is established are " the 
 mutual insurance of ships belonging to members of the Company, 
 and the doing of such other things as are incidental or conducive 
 to the attainment of the above objects." 
 
 4th Every member of the Company undertakes to contribute to 
 the assets of the Company in the event of the same being wound up 
 during the time that he is a member or within one year afterwards, for 
 payment of the debts and liabilities of the Company contracted before 
 the time at which he ceases to be a member, and the costs, charges and 
 expenses of winding up the same, and for the adjustment of the rights 
 
;/ 
 
 ■I 
 
 368 
 
 SHAREHOLDERS AND DIRECTORS MANUAL. 
 
 of the contributories amongst themselves, such amount as may be 
 requireil, not exceeding dollars. 
 
 We, the several persons whose names and addresses are subscribed 
 are desirous of being formed into a Company, in pursuance of 
 this Memorandum of Association. 
 
 Names, Addresses, aud Descriptions of Subscribers. 
 
 "1. John Jones of 
 " 2. John Smith of 
 " 3. Thomas Green of 
 "4. John Thomson of 
 " 5. Caleb White of 
 
 Dated the 
 
 day of 
 
 in the County of 
 in the County of 
 in the County of 
 in the County of 
 in the County of 
 , 189 . 
 
 Merchant. 
 
 Witness to the above signatures, 
 ii.Z}., No. Street, 
 
 British Columbia. 
 
 Articles of Association to accompany preceding Mkmouandcm of 
 
 Association. 
 
 (1) The Company, for the purpose of registration, is declared to 
 
 consist of five hundred members. 
 (2) The directors hereinafter mentioned may, whenever the business 
 of the Association requires it, register an increase of members. 
 
 Definition of Members. 
 
 (3) Every person shall be deemed to have agreed to become a mem- 
 ber of the Company who insures any ship, or share in a ship, in 
 pursuance of the regulations hereinafter contained. 
 
 General Meetings, 
 
 (4) The first general meeting shall be held at such time, not being 
 n:ore than three months after the incorporation of the Com- 
 pany, and at such place, as the directors may determine. 
 
 (5) Subsequent general meetings shall be held at such time and 
 place as may be prescribed by the Company in general meeting ; 
 and if no other time or place is prescribed, a general meeting 
 shall be held on the first Monday in February in every year, at 
 such place as may be determined by the directors. 
 
 (6) The above-mentioned general meetings shall be called ordinary 
 meetings ; all other general meetings shall be called extra- 
 ordinary. 
 
 (7) The directors may, whenever they think fit, and they shall, upon 
 a requisition made in writing by any five or more members, 
 convene an extraordinary general meeting. 
 
 (8) Any requisition made by the members shall express the object 
 of the meeting proposed to be called, and shall be left at the 
 registered office of the Company. 
 
 
lUUTISH COLUMHIA ACI'. 
 
 .S60 
 
 (!)) Upon the receipt of such reciuisition, the directora shall forth- 
 with proceed to convent) a Keneriil meeting;. If they do not pro- 
 ceed to convene the same within twenty-cne days from the date 
 of the requisition, the re(iuisitioniHt8, or any_other five members, 
 may themse es convene a meeting. 
 
 Proceedings at General Meetinyx. 
 
 (10) Seven days' notice at the least, Bpecifyin<; the place, the day, 
 and the hour of meeting, and in case of spocial business the 
 general nature of such business, shall be given to the members in 
 
 ^ manner hereinafter mentioned, or in such other manner, if any, 
 as may be prescribed by the Company in general meeting ; but 
 the noni-eceipt of such notice by any member shall not invali- 
 date the proceedings at any general meeting. 
 
 (11) All business shall be deemed special that is transacted at an 
 extraordinary meeting, and all that is transacted at an ordinary 
 meeting, with the exception of the consideration of the accounts, 
 balance sheets, and the ordinary report of the directors. 
 
 (12) No business shall be transacted at any meeting, except the 
 declaration of a dividend, unless a quorum of members is present 
 at the commencement of such business ; and such quorum shall 
 be ascertained as follows, that is to say :— If the members of 
 the Company at the time of the meeting do not exceed ten in 
 number, the quorum shall be five; if they exceed ten, there shall 
 be added to the above quorum one for every live additional 
 members up to fifty, and one for every ten additional members 
 after fifty, with this limitation, that no quorum shall in any 
 case exceed thirty. 
 
 (13) If within one hour from the time appointed for the m.eetinga 
 quorum of members is not jjresent, the meeting, il convened 
 upon the requisition of the members, shall be dissolved. In 
 any other case it shall stand adjourned to the same day in the 
 following week at the same time and place ; and if at such 
 adjourned meeting a (juorum of members is not present, it shall 
 be adjourned sine die. ' 
 
 (14) The chairman (if any) of the directors shall preside as chair- 
 man at every general meeting of the Company. 
 
 (16) If there is no such chairnnxn, or if at any meeting he is nut 
 present at the time of holding the same, the members present 
 shall choose some one of their number to be chairman at such 
 meeting. 
 
 (16) The chairman may, with the consent of the meeting, adjourn 
 any meeting from time to time anc m place to place, but no 
 business shall be transacted at any Ijourned meeting other 
 than the business left unfinished at the meeting from which the 
 adjournment took place. 
 
 w.E. n M. —24 
 
 ! 
 
370 
 
 SHAREHOLDERS AND DIllECTORS MANUAL. 
 
 'i 
 
 '':'i 
 
 
 !"i' 
 
 ■ V 
 
 lr| 
 
 ■ ) 
 
 ! : 
 
 I 
 
 I 
 
 (17) At any general meeting,', unleEs a poll is demanded by at least 
 five members, a declaration by the chairman that a resolution 
 has been carried, and an entry to that effect in the Book of 
 Proceedings of the Company, shall be sufficient evidence of the 
 fact, without proof of the "innber or proportion of the votes 
 recorded in favour of or r.gaii.st srch resolution. 
 
 (18) It a poll is demandef" ' manner aforesaid, the same shall be 
 taken in sucli manner i, ;o chairman directs, and the result of 
 such poll sl'all be deemed to be the resolution of the Company 
 in general meeting. 
 
 Votes of Members. 
 
 (19) Every member shall have one vote and no more. 
 
 (20) If any member is a lunatic or idiot, he may vote by his com- 
 mittee, curator bonis, or other legal curator. 
 
 (21) No member shall be entitled to vote at any meeting unless all 
 moneys due from him to the company have been paid. 
 
 (22) Votes may be given either personally or by proxies. A proxy 
 shall be appointed in writing under the hand of the appointer, 
 or it such appointer is a corporation, under its common seal. 
 
 (23) No person shall be appointed a proxy who is not a member, 
 and the instrument appointing him shall be deposited at the 
 registered office of the Company not less than forty-eight hours 
 before the time of holding the meeting at which he proposes to 
 vote. 
 
 (24) Any instrument appointing a proxy shall be in the following 
 form ; — 
 
 Company, Limited. 
 I, of , in the County of 
 
 being a member of the Company, Limited, 
 
 hereby appoint , of , as my proxy, to 
 
 vote for me and on my behalf at the (o dinary or extraordinary, 
 (in the case mai/ bf) general meeting of the Company to be held 
 on the day of , and at any adjournment 
 
 thereof to be held on the day of next (or 
 
 at any meeting of the Company that may be held in the 
 year ) 
 
 As witness my hand this day of 
 
 Signed by the said in the presence of 
 
 Directors, 
 
 (25) The number of the directors, and the names of the first direc- 
 tors, shall be determined by the subscribers of the Memoran- 
 dum of Associaiion. 
 
 (2(5) Until directors are appointed, the subscribers of the Memoran- 
 dum of Association shall for all the purposen of this Act be 
 deemed to be directors. 
 
muriSH COLUMBIA ACT. 
 
 871 
 
 t least 
 lution 
 ook of 
 of the 
 e votes 
 
 ihftll be 
 3eult of 
 impany 
 
 lis com- 
 
 nless all 
 
 A proxy 
 pointer, 
 1 seal, 
 member, 
 d at the 
 [ht hours 
 eposes to 
 
 oUowiiig 
 
 Limited, 
 roxy, to 
 rdinary, 
 
 be held 
 urnment 
 
 next (or 
 d in the 
 
 [st direc- 
 llemoran- 
 
 [emoran- 
 Act be 
 
 Powers of Director*. 
 
 (27) The business of the Company shall be managed by the 
 directors, who may exercise all such powers of the Company as 
 are not hereby required to be exercised by the Company in 
 general meeting ; but no regulation made by the Company in 
 general meeting shall invalidate any prior act of the directors 
 which would have been valid if such regulation had not been 
 made. 
 
 ^•ll^ction of Directors. 
 
 (28) The directors shall be elected annually by the Company in 
 general meet'.ng. 
 
 Bminess of Company. 
 
 l^IIere insert link's us to mode in which business of Insurance is to be 
 
 conducted.] 
 
 Accounts. 
 
 (29) The accounts of the company shall be audited by a comm'ttee 
 of five members, to be called the Audit Committee. 
 
 (30) The first Audit Committee shall be nominated by the directors 
 out of the body of members. 
 
 (31) Subsequent Audit Committees shall be nominated by the mem- 
 bers at the ordinary general meeting in each year. 
 
 (;}2) The Audit Committee shall be supplied with a copy of the 
 Balance Sheet, and it shall be their duty to examine the same, 
 with the accounts and vouchers relating thereto. 
 
 (33) The Audit Committee shall have a list delivered to them of all 
 books kept by the Company, and they shall at all reasonable 
 times have access to the books and accounts of the Company ; 
 they may, at the expense of the Company, employ accountants 
 or other persons to assist them in investigating such accounts, 
 and they may in relation to such accounts examine the directors 
 or any other officer of the Company. 
 
 (34) The Audit Committee shall make a report to the members 
 upon the Balance Sheet and Accounts, and in every such report 
 they shall state whether m their opinion the balance sheet is a 
 full and fair balance sheet, containing the particulars required 
 by these regulations of the Company, and properly drawn up, 
 so as to exhibit a true and correct view of tlio state of the 
 Company's affairs, and in case they have called for explanation 
 or infornuition from the directors, whetlior such explanations 
 or information have been given by the directors and whetlier 
 they have been satisfactory, and such report shall be read 
 together with the report of the directors at the ordinary 
 meeting. 
 
■:y 
 
 372 
 
 SHAI«KH(HJ)I':itS AND DIUKCTOHS MAM'AI.. 
 
 Notices, 
 
 (35) A notice may be served by the compan/ upon any member 
 eitbet personally or by Hendin^ it tlirough the jiOBt in a prepaid 
 letter addressed to buch member at hi? registered place of 
 abode. 
 
 (36) Any notice, if served by post shall be deemed to have been 
 served at the time wiior ihc letter containin(> the same would 
 be ublivered in the ordinary course of the pist; and in proving 
 such service it shall be sufficient to prove tliat the letter con- 
 taining the notice was properly addressed, and put into the 
 post office. 
 
 Windiii(f up. 
 
 (37) The company shall be wound up voluntarily wlienever an 
 extraordinary resolution, as defined in the " Companies Act," 
 is passed, re(]uiring the company to be wound up voluntarily. 
 
 Names, AddresscR, and DescriptiouR of Subscribb.c 
 
 " 1. John Jones of 
 " 2. John Smith of 
 " 3. Thomas Green of 
 " 4. John Thomson of 
 " 5. Caleb White of 
 
 Dated the 
 
 day of 
 
 in the County of 
 in the County of 
 in the County of 
 in the County of 
 in the County of 
 189 . 
 
 Merchant. 
 
 Witness to the above signatures, 
 A. ]{., No Street, 
 
 British Columbia. 
 
 FORM C. 
 
 Memorandum ami Autici.ks of Association of a Company limited by 
 Guarantee, and having a capital divided into shares. 
 
 Memorandum of Association. 
 
 1st. The name of the Company is " The Highland Hotel Company, 
 " Limited." 
 
 2nd. The registered office of the Company will be situate in 
 
 3rd. The objects for which the Company is established are " the 
 " facilitating travelling in the Province by providing Hotels and 
 " Conveyances by sea and by land, for the accommodation of 
 " travellers, and the doing all such other things as are incidental or 
 " conducive to the attainment of the above object." 
 
 4th. Every member of the Company undertakes to contribute to the 
 assets of the Company in the event of the same being wound up during 
 the time that he is a member, or within one year afterwards, for pay- 
 ment of the debts and liabilities of the Company, contracted before the 
 time at which he ceases to be a member, and the costs, charges, and 
 expenses of winding up the same, and for the adjustment of the rights 
 
niUTlSH COLUMBIA ACT. 
 
 373 
 
 of the coiitributories amongst tliemselves, gucli amount as may be 
 
 reqnired, not exceeding dollan. 
 
 V'k, the several persons whoso names and addresses aro subscribed, 
 
 are desirous o«: being formed intc a Company, in pursuance of this 
 
 Memoiandum of Association. 
 
 Names, Addresses, and Descriptions of Subscribers. 
 
 "1. Joini Jones of 
 " 2. John Smith of 
 " 3. Thomas Green of 
 " 4. Jolm Thomson of 
 " 5. Caleb White of 
 Dated the day of 
 
 Witness to the above signatures, 
 -■l.R.No. Street. 
 
 in the County of 
 in the County of 
 in the County of 
 in tiie County of 
 in the County of 
 
 Merchant. 
 
 British Columbia. 
 
 Articles of Aniociation to uccom-pauy preceding Memorandum of 
 
 Association. 
 
 1. The capital of the Company shall consist of 
 
 dollars, divided into shares of dollars each. 
 
 2. The directors may, with the sanction of the Company in general 
 meeting, reduce the amount of shares. 
 
 3. The directors may, with the sanction of the Company in general 
 meeting, cancel any shares belonging to the Company. 
 
 4. All the articles of Table A shall be deemed to be incorporated 
 with these articles, and to apply to the Company, 
 
 We, the several parsons whose names and addresses are subscribed, 
 agree to take the number of shares in the capital of the Company 
 set opposite our respective names. 
 
 " 1. John Jones of 
 " '2. John Smith of 
 '• 3. Thomas Green of 
 " 4. John Thomson of 
 "5. Caleb White of 
 
 in the County of 
 in the County of 
 in the County of 
 in the County of 
 in the County of 
 
 Total shares taken 
 
 Number of 
 Shares taken 
 
 by each 
 Subscriber. 
 
 200 
 25 
 30 
 40 
 15 
 
 Dated the day of 18!) 
 
 Witness to the above signatures, 
 A. B., No. Street, . 
 
 310 
 
 British Columbia. 
 
m 
 
 laili 
 
 y& 
 
 374 
 
 SHAUEIIOLDEHS AND DlUKCTditS MAXUAL. 
 
 FOKM D. 
 
 MEMORANDrM End AitTici.EB OF Abeo'i \i ION of ail unliirifod Company 
 
 having a Capital 'iividerl into Sharep. 
 
 Memorandum of AsiociaHon, 
 
 Ist. The 7idme of tlie Company id "The Patent Stereotype Com- 
 " pany." 
 
 2nd. The registered office of the Company will be situate in 
 
 3rd. The objects for which the Company is established are "the 
 "working of a patent method of founding and castmg stereotype plates, 
 " of which method John Smith, of , is the sole patentee." 
 
 Wk, the several persons whose names are subscribed, are desirous of 
 
 being formed into a Company, in pursuance of this Memorandum of 
 
 Association. 
 
 Names, Acldressua, ami Descriptions of Subscribers. 
 
 " 1. John Jones of in the County of Merchant. 
 
 " 2. John Smitli of in the County of 
 
 " 3. Thomas Green of in the County of 
 
 "4. John Thomson of in the County of 
 
 " a. Caleb White of in the County of 
 
 Dated day of 189 . 
 Witness to the above signatures, 
 
 A.B.,'So. Street, British Columbia. 
 
 Articles oj Association to accompany the preceding Memorandum of 
 
 Association. 
 
 Capital of the Company. 
 The capital of the Company is dollars, divided 'ito 
 
 shares of dollars each. 
 
 Application of Table A. 
 All the articles in Table A shall be deemed to be incorporated with 
 these articles, and to apply to the Company. 
 
 Wk, the several persons whose names and addresses are subscribed, 
 agree to take the number of shares in the capital of the Company 
 set opposite our respective names. 
 
 Names, Addresses, and Descriptions of Kiubscribers. 
 
 " 1. John Jones of 
 " 2. John Smith of 
 "3. Thomas Green of 
 " 4. John Thomson of 
 "5, Caleb White of 
 
 in the County of Merchant 
 
 in the County of — 
 
 in the County of — 
 
 in the County of — 
 
 in the County of — 
 
 Total shares taken — — — 
 
 Number of 
 Sliares taken 
 
 by 
 Subscribers. 
 
 1 
 5 
 2 
 2 
 3 
 
 13 
 
 Dated the day of 
 
 Witness to the above signatures, 
 A. B., No. Street, 
 
 189 
 
 British Columbia. 
 
HRITISH COLUMHIA ACT. 
 
 375 
 
 8 "B 
 
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m 
 
 376 
 
 SHAUEIIOLDERS AND DIUECTORS MANUAL. 
 
 NEW BRUNSWICK.' 
 
 !'f 
 
 1* 
 
 Tinder the Provisions of the New BruHBwick Joint Stock Companies 
 Act (1893). 
 
 PurposeH, — Seo. 3. — Tiie Lieutenant-Governor in Council may f»rant 
 a clmrter to any number of personw, not less than five, who shall petition 
 therefor, constitutintj such persons and others who may become sliare- 
 holderb in the company thereby created, a body corporate and politic for 
 any purposes or objects to which the lej^islative authority of the Legis- 
 lature of New Brunswick extends, except tlie construction and workinjj 
 of railways, and the buHiness of insurance, or the manat{omont of trauen 
 unions, friendly societies, building societies or other associations of like 
 character. 
 
 Notice to be Given. — Sec. 4. — Two weeks' previous notice must be 
 given in the lioyal <lazctte of intention to apply, and the notice must 
 state : 
 
 (a) The proposed corporate name of the Company, which shall not 
 
 be that of any other known Company incorporated, or any 
 name liable to be confounded therewith, or otherwise on public 
 grounds objectionable ; 
 
 (b) The object for which its incorporation is sought ; 
 
 (c) The Town or place, or some one of the Towns or places within 
 
 the Province of New Brunswick, in which its office or chief 
 place of business is to be established ; 
 
 {d) The amount of its capital stock, which sliall not be less in any 
 case than two thousand dollars (|'2,000), actually subscribed ; 
 
 (e) The number of shares and the amount of each share ; 
 
 (/) The name in full, address and calling of each of the applicants, 
 with special mention of the names of not less than three of 
 their number, who are to be the first or Provisional Directors 
 of the Company; 
 
 Petition. — Sec. 5. — At any time, not more than one month after the 
 last publication of such notice, the applicants may petition the Lieuten- 
 ant-Governor, through the Provincial Secretary, for the issue of such 
 Letters Patent ; 
 
 (a) Such petition must recite the facts set forth in the notice, and 
 must further state the amount of stock taken by each applicant and the 
 amount, if any, paid in upon the stock of each applicant ; 
 
 {b) The aggregate of the stock so taken must be at least one-half of 
 the total stock of the company. 
 
 1 Copies of the New Brunswick .loint Stock Companies Act may be obtained 
 on application to the Hon. the Provincial Secretary, Frederictou, N.B. 
 
NKW HUrXSWICK A<T. 
 
 .377 
 
 (c) The petition iiiuttt aleo state wiiether such anionnt is paid in 
 cash, or by transfer of property or how otherwise, and if by transfer of 
 property, shall state brielly the description of property transferred. 
 
 ((/) In case the petition is not sij^ned by all the shareholders whose 
 names are proposed to be inserted in letters patent, it shall bo accom- 
 panied by a niemorandiini of iissociation, sif^ncd by rill the persons 
 whose names are to be so inserted, or by their attorneys, duly authorized 
 in writinf*, and such memorandum shall contain the particulars required 
 by the next preceding section and may be in the Form A in the schedule 
 of this Act. 
 
 ((■) Any payments which shall have been made in cash on account 
 of the stock must have been paid in to the credit of tlie company, or of 
 trustees therefor, and must be standinf? at such credit in some chartered 
 bank in tlie Province. 
 
 When Publication not Necessary. — 8oc. 7. — Publication of notice is 
 not necessary when capital stock does not exceed f i.OOO. 
 
 Directors.— Sec. 27. — The affairs of every company shall be man- 
 atjed by a board of not less than three directors. 
 
 Directors' Qualification. — Sec. '29. — A Director must be a Hhare- 
 holder owning stock in his own right and to the amount required by the 
 by-laws of the company, and not in arrear in respect of calls thereon. 
 
 First Call. — Sec h'd. — Not less than ten per cent, upon the 
 allotted stock of the company shall by means of one or more calls be 
 made payable and called in within one year from the incorporation of 
 the company. 
 
 Issue of Shares.— See. 38. — Every share in the company shall be 
 deemed and taken to have been issued, and to be held subject to the 
 payment of the whole amount thereof in cash, unless the same shall 
 have been otherwise determined by a contract duly made in writing 
 and filed with the Provincial Secretary at or before the issue of the 
 shares. 
 
 Wliat ProspBcti.s must Contain. — Sec. H'.). — Every prospectus of the 
 company and every notice inviting persona to subscribe for shares in 
 the company shall specify the date and names of tlie parties to any con- 
 tract entered into by the company or the promoters, directors or trustees 
 thereof, whether subject to adoption by the directors of the company or 
 otherwise ; and any prospectus or notice specifying tlie same shall be 
 deemed fraudulent on the part of the promoters, directors and officers 
 of the company knowingly issuing the same as regards any person taking 
 shares in the company on the faith of such prospectus unless he shall 
 liave had notice of such contract. 
 
 Borrowing Powers. — Sec. 91. -In case a by law authorizing the 
 same is sanctioned by a vote of not less than two-thirds in value of the 
 shareholders then present, in person or represented by proxy, at a 
 special general meeting duly called for considering the by-law, the direc- 
 

 )(* 
 
 37« SIIAIIKHOLDKKS' AND UlUECTOlts' MANl'AL. 
 
 torH may borrow moiioy upon the credit of tlie company, iiiid iHHiie 
 boiulH, doboiitureM or other sociiriticH, and may sell, plud^o or hyphotlie- 
 cate the same for any Hiima borrowed, or depoait the same ah collateral 
 security for any promissory note or overdraft of the <!ompaiiy, at such 
 prices or for sucli amounts as may be deemed expedient or necessary, 
 ^ut no such debentures or bonds shall be for a less sutn than one hun- 
 dred dollars ; and tlii^ directors tnay, ut< ler the like sanction, hypothecate 
 or pled>{o the real or personal property of the company to secure 
 any sums borrowed by the C'ompany, and may secure any bonds, 
 debentures or other securities of the company by the said real or 
 personal property or both ; provided alvvi'.ys, tliat the amount to be 
 borrowed, or for which such bonds, d bonturea or other securities may be 
 pledged or hypothecated, shall not at any time be greater than seventy- 
 five per cent, of the actual paid-up stock ; and provided always, that the 
 limitations of this section shall not be held to apply to commercial paper 
 discounted by the company. 
 
 Tariff of Fees. 
 
 (1) When the proposed Capital Stock of the Company is ff."»,O()0 or less, 
 the fee to be Thirty dollars (ftao.OO). 
 
 (2) When the proposed Capital Stock of the Company is above ^'i.OUO 
 and less tha'n »10,()00, the fee to bo Forty dollars i»40.00). 
 
 (8) When the proposed Capital Stock of the Company is $10,000 and 
 less than »2.'),000, the fee to be Fifty dollars (».">(I.OO). 
 
 (4) When tiie proposed Capital Stock of the Company is 82"),(K)(> and 
 less than ftr)0,000, the fee to be Sixty dollars (»t)(».00). 
 
 (.")) When the proposed Capital Stock of the Company is f ")(t,0()0 and 
 less than »100,00l), the fee to be Eij^hty dollars (SSO.OO). 
 
 (()) When the proposed Capital Stock of the Company is ftl00,000 and 
 less than $200,000, the fee to be One hundred and twenty dollars 
 (»120.00). 
 
 (7) Wlien the proposed Capital Stock of the Company is 8200,000 and 
 less than #300,000, the fee to be One hundred and sixty dollars 
 (»160.00). 
 
 (8) When the proposed Capital Stock of the Company is #300,000 and 
 less than ^oOO.OOO, the fee to be Two huudred dollars (#200.00). 
 
 ('J) When the proposed CPiital Stock of the Company is 8000,000 and 
 less than $1,000,000, the fee lo be Two hundrsd and fifty dollars 
 (#250.00). 
 
 (10) For every #.")O0,000 in excess of il.OOO.OOO, an additional fee of Fifty 
 dollars (J.IO.OO.) 
 
 (11) Supplementary Letters, when application is to increase the Capital 
 Stock, a sum of Twenty dollars (#20.00), and a further sum in addi- 
 tion thereto, according to the scale aforesaid, upon the increased 
 amount for which Letters are applied for. 
 
 In all other cases a fee of Fifty dollars (#50.00). 
 
MAN'IT<»I«A ACT. 
 
 870 
 
 MANIT0I5A 
 
 Undor tlie proviHioiiH of tlie Rovisecl StatuteH of Manitoba (lH91) 
 1). IHti. 
 
 Purposes.— Hoc. 4.— The LientenivntOovernor in Council mav «rant 
 a charter to any number of personH, not loss than five, wiio shall petition 
 tlierefor, and same may be created a Iwdy corporate and politic for any 
 of the purposes or objects to whicli the lo^ialativu authority of the J.egis. 
 latiire of Manitoba extends, except the construction and workin{j of tail- 
 ways and tiie business of insurance. The capital stock of a company 
 incorporated under this Act can not at any time exceed »r>00,00(), unless 
 it be a mining company, in which case it may not exceed «'2,0(»0,0<M). 
 
 Notice.- Sec. ">.— A month's notice of intention to apply to be given 
 in the Manitoba Gazette. The notice sliould give information similar to 
 that required under dec. 4 of the Dominion Act. 
 
 Petition.— Sec. «.— Within a month after the last publication the 
 applicants may petition for the issue of Letters Patent : 
 
 7 (a; Such petition must state the facts required to be set forth in 
 the notice, and must first further state the amount of stock taken by 
 each applicant, and also the amount, if any, paid in upon the stock of 
 each applicant ; 
 
 (b) The petition shall also state whether the amount is paid ii cash 
 or transfer of property or how otherwise ; 
 
 (c) Petition may ask that there be embodied in cliarter any provi- 
 sion which might be embodied in any by-law of company when incor- 
 porated ; . 
 
 (8) In case the petition is not signed by all the shareholders whose 
 names are proposed to be inserted in the letters patent it shall be accom- 
 panied by a memorandum of association, signed by all tiie ))artie8 whose 
 names are to be inserted, or by their attorneys duly authorized in 
 writing, and such memorandum shall contain the particulars required 
 by the next preceding sub-3ection. 
 
 There is no requirement as to subscription of stock or the payment 
 of a percentage of the stock at the time of the application for incorpora- 
 tion, but business may not be commenced until JO per cent, of stock 
 has been subscribed and 10 per cent, of stock so subscribed has been 
 actually paid up. 
 
 Directors.— Sec. 24.— The board of directors shall not be less than 
 three uor more than nine directors. 
 

 . :H 
 
 h- n ~i [ 
 
 i 
 
 n ? 
 1.; 
 
 380 
 
 .shaueuoldp:us and directohs manual. 
 
 Rorro'ving Powers. — Sec. 71. — Siim. r to Ontario Joint Stock Com- 
 pany. 
 
 Calls. — Sec. 50. — Not less than ten per cent, npon the allotted stock 
 of the company shall, by means of one or more calls, be called in and 
 made payable within one year from the incorporation of the company ; 
 the residue when and as the by-laws of the company shall direct. 
 
 Tauikf 01' Fkes. 
 
 SoOO.OOO and upwards $150 00 
 
 $200,000 and less than $500.000 , 100 00 
 
 $100,000 and less than $200,()0() 75 00 
 
 $50,000 and less than $100,000 .")0 00 
 
 $'2,000 and less than $50,00(* .'lO 00 
 
 Less than $2,000 10 00 
 
 NORTH-WEST TERRITORIES. 
 
 ^ ^-1 
 
 Under the Provisions of " Tiik Companies' Okdinance," Revised 
 Ordinanceg of the N. W. T., 1888, Chapteu 30. 
 
 Purposes. — Sec. 3. — A charter of incorporation may bo granted 
 by the Lieutenant-Governor to any number of persons, not less than 
 three, for any of the purposes or objects to which the legislative 
 authority of the Legi'^lative Assembly of the Territories extends. 
 
 Notice to be Given. — Sec. 4.— The applicants must advertise by 
 notice published at least once in the Official Gazette ot the Territories 
 {a), and in three consecutive weekly issues of any newspaper published 
 at or nearest the place which is to be the chief place of business of the 
 company, their intention to apply for the same. 
 
 (1) Proposed corporate name of tho company. 
 
 (2) The object of the incorporation. 
 
 (3) Place which is to be its chief place of business. 
 
 (4) Proposed amount of its capital stock. 
 
 (5) The number of shares and amount of each sliare. 
 
 ((J) Names in full and address and calling of each applicant, with 
 special mention of the names of not less than three nor more than nine of 
 their number who are to bo the first directors of the company, the 
 majority of whom shall be residents of Canada. 
 
 (a) The Gazette is published at Itegina. 
 
I 
 
 NOUTH-WEST TEKlllTOUJLH OUDIXANCE. 8S 1 
 
 Petition.— Sec. 5. -. Within two months after the h\st pn'.;!iciition of 
 such notice tlie ftpplicanta may petition tlie Lieutenant Governor for the 
 iRSue of such letters patent. 
 
 Contents of Petition.— Sec. G.~The petition shall set forth : — 
 
 (1) The facts contained in the notice. 
 
 (2) The amount of stock taken by each applicant and the amount 
 paid in upon the stock of each applicant, as also the manner in which 
 the same has been paid in, and is held for the company. 
 
 Sec. 7.— The a<,'<?re<^ate of the stock so taken shall be at least the 
 one-half of the total amount of the proposed Capital Stock of the 
 company. 
 
 Sec. S. -The aj^gregate paid in on the ags^iegate stock so taken shall 
 be at least ten per cent., and shall be paid in to the credit of the com- 
 pany or trustees therefor, and shall be standing;; at such credit in some 
 chartered bank in Canada, unless the object of the company is one 
 requiring that it should own real estate, in which case such aggregate 
 may be oaken as paid in if it is bona Me investv^l in real estate suitable 
 to such object which is held by trustees for tha company and is of tiie 
 required value, over and above all incumbrances thereon. 
 
 General Powers of Company.— Sec. ;iO.— Are similar to those under 
 Sec. 24 of the Dominion Act. 
 
 Number of Directors.- Sec. 31.— Not more than nine and not less 
 than three. 
 
 Qualification.— Sec. 3fi.— Same as in the Dominion Act. 
 
 Borrowing, etc.— Sec. 41.— Same as in the Dominion Act. 
 
 Calls. — Sec. 4o.— May be made as the directors think lit. 
 
 Tauiff of Fkes. 
 Sec. 113— 
 
 (1) When the Capital Stock of die Company is 1400,000 and 
 
 upwards, the fee to be |200 Oo 
 
 (2) When the Capital Stock of the company is $200,000 or 
 
 upwards, and under $400,0(M) 150 00 
 
 (3) When the Capital Stock of the company is $100,000 and 
 
 upwards, and under $200,000 100 00 
 
 (4) When the Capital Stock of the co.npany is $50,000 and 
 
 upwards, and under $ J 00,000 r>0 Oo 
 
 (5) When the Capital Stock of the company is $40,000 and 
 
 upwards, and under $50,000 40 00 
 
 (6) When the Capital Stock of the company is over $10,0(H» 
 
 and under $10,000 30 00 
 
 (7) When the Capital Stock of the company is $10,000 or 
 
 under 20 OO 
 
 (8) On application for Supplementary Letters Patent, the fees to be 
 one-half of that charged on the original Letters Patent, 
 
382 
 
 SHAUEHOLDEllS' AXD DIRECTOlls' MANl'AL. 
 
 NOVA 8C0TIA 
 
 Under the provisions of the " Nova Scotia Joint Stock Companies 
 Act," Revised Statutes of Nova Scotia, 1884, Cap. 79, incorporation is 
 granted for the same purposes and subject to the same conditions of 
 procedure and form as prevail under the Dominion of Canada Joint 
 Stock Companies Act. 
 
 Tariff of Fees. 
 For a Company whose Capital Stock is less than ^10,000 the fee is ft20 
 
 »10,000 and less than »,")0,{XI0 the fee is 830 
 
 «.-)0,000 " »100,000 " »4() 
 
 $100,000 " $250,000 ■• V^O 
 
 »250,00(> " 1.100,000 " *(iO 
 
 »r)()<l,000 and upwards, tlie fee is $70. 
 
 For Supplementary L3tters increasing the Capital Stock, fl."). 
 
 " ♦' " powers, $1."). 
 
 " " " name, fl.">. 
 
 PRINCE EDWARD ISLAND. 
 
 t 
 
 il 
 
 ;! 
 
 Under the provisions of tho Prince Edward Island Joint Stock 
 Companies Act, Chapter 14, 51st Victoria, incorporation is granted for 
 the same purposes and subject to the same conditions of procedure and 
 form as prevail under the Dominion of Canada Joint Stock Comjmnies 
 Act. 
 
 Tauikk ok Fees. 
 
 When the proposed capital stock of the company is less than 
 
 1iilO,00(), fee to be paid «25 00 
 
 ftl(i,0(»0 and under 125,000 30 00 
 
 2.'>,0(M> " 50,000 35 (M) 
 
 .50,000 " 100,000 45 OO 
 
 100,000 " 200,000 . . (').") 00 
 
 200,000 " 300,000 85 00 
 
 .300,<(<K> " 500,000 1(15 OO 
 
 500,000 and upwards 125 (»0 
 
INDEX. 
 
 is *2(> 
 . . »30 
 , . $40 
 ,. $50 
 ,. »G0 
 
 00 
 
 A. 
 
 Acceptance of Office ky DiRECTons. 
 
 20. 
 Accounts, 53, 219, 3G1. 
 
 RiRht of director to see, 32. 
 
 May be audited, 1()2, 3G2. 
 
 When incorrect, 04. 
 Acts. 
 
 Table of, x., xii. 
 Actions. 
 
 By or against company, 152, 277, 
 
 331. 
 For calls, 143, 270. 
 
 Adveutiskments.— ,Sc^ Notices. 
 AiMonuNED Meetinoh, 40, 151. 
 Affidavits. 
 
 P-oof of matters mav be bv, 133 
 2()0. 
 
 Wlio autliorized to take, 133, 200. 
 
 Fees for taking, 122. 
 
 AoENTS, 
 
 Liability of company for, 160, 279. 
 " as transferor, 88. 
 
 Agenda fou DiitECTOiis' Meetings. 
 
 210. 
 Agencies, 279. 
 Agreesiknt Complete, 7. 
 Allotment of Sil\i(es, 7, 74, I4l,20."> 
 29' 
 Letter of, 7, 178. 
 Amalgamation of Comi-anies, 167. 
 Annual Meetings, 149, 200, 332. 
 Annual Statements. 
 
 Must be made, 155, 172, 228, 241 
 
 283, 31,1. 
 May be inspected, 1.10. 
 Applicants. 
 
 Need not be residents of Ontario. 
 128. 
 
 Majority of, to be resident in 
 Canada, 2,18, 287. 
 
 Number of, 128, 258, 280, 307. 
 
 Not less than tliree, to be Direc- 
 tors, 131, 258, 287. 
 
 Applicants — Continued. 
 
 Provisional Dir 3tors must be 
 
 131, 2,58, 287. 
 Must be of age, 129. 
 Application. 
 
 Of Ontario Companies Act, 127. 
 For Letters Patent, 128, 258, 287. 
 Shares, (i. 
 , May be revoked, 6. 
 
 I Articles of Association, 309. 
 AitniTitATioN, 338. 
 Attohney. 
 ; Company may appoint, 172, 333. 
 I Aui.iTORs AND Aui.niNG, ,17, 102, 302. 
 I Access to books by, 102. 
 May be shareholders, 162. 
 When accounts incorrect, 04. 
 Certificate, 210. 
 
 B. 
 
 Balance Sheet, 02. 
 Form of, 3()1. 
 
 Shall be supplied to auditor, 102. 
 Bank Managehs' CEiniFicATE of De- 
 posit, 2,10. 
 Ballot. 
 Voting by, at general meetings, 4-5. 
 145, 207. 
 BoAiti> OF Directors. —See Under 
 
 l>hectnri>. 
 Books of (Jompanv. 
 
 Certain, must be kept, 52, 152, 
 
 155, 270, 2!)(), 315. 
 Auditing of, 57, 102, 302. 
 Strangers have no right to inspect, 
 
 5(). 
 Where to be kept, 55, 154, 271. 
 Minutes, how entered, .5,1. 
 
 must be kept, 1.15. 
 What to contain, 52, 153, 271, 296. 
 
 310. 
 To be kept open for inspection, 50, 
 151, 271, 287. 
 
384 
 
 INDEX. 
 
 Hooks of CoMi'AN'i -Continued. 
 
 Penalties for false entries in, 153, 
 271, 21)7. 
 
 Penalties for refusal to allow in- 
 spection of, 154, 1()0, 271, 297. 
 
 Transfer to be kept, 53, ir)3, 271, 
 29«. 
 
 Right of director to see, 32. 
 
 May be rectified by Court, 153. 
 
 BOOKKKKI'INO. 
 
 Better method of, 64. 
 BoiuiowiNG Pownns, 14!>, 285, 338. 
 Bonds, 149, 208, 289. 
 Bi'.iTisii CcLUMuiA Act, 303. 
 Business. 
 
 When commenced, 17. 
 
 Chief place of, 13, 131, 258, 287. 
 
 change of, 140, 205. 
 Conversion of a, into a company, 
 111. 
 By-Laws. 
 Table of, 217. 
 
 Directors may make, 147, 207, 291. 
 To change number of Directors, 
 140, 195; 207, 292. 
 Head Office, 146, 197, 
 265. 
 Divide shares, and increase or 
 decrease capital, 134, 135, 
 188, 202, 289. 
 For the allotment, forfeiture, dis- 
 posal and transfer of stock, 
 147, 207. 
 sale of Mining Stock at dis- 
 count, 201, 220. 
 the making and payment of 
 
 calls, 147, 267. 
 issuing and registering certi- 
 ficates of stock, 147, 267. 
 declaring and paying divi- 
 dends, 147,207. 
 regulating terms and quali- 
 fications of directors, 147, 
 267, 292. 
 appointment, security, remu- 
 neration, etc., of agents, 
 
 147, 207, 292, 
 
 the holding of meetings and 
 procedure thereat, 148, 190, 
 268. 
 
 imposing fines and penalties, 
 
 148, 208. 
 
 Must be confirmed at General 
 
 Meeting, 135, 148, 208. 
 For certain purposes must be ap- 
 proved of by shareholders, 135, 
 137, 140, 148, 208. 
 
 must be con- 
 firmed by Letters Patent, 135, 
 137, 263. 
 
 B\ L.KWB—Continned. 
 Effect of, 51. 
 Difference between resolution and 
 
 by-law, .52. 
 Method of drafting, 52, 
 Shareholders held to bo conversant 
 
 with, 51. 
 Approved of at Annual Meeting, 
 
 onl/ repealable at another, 21. 
 
 c. 
 
 CaM.8. 
 
 When due and payable, 82, 142, 
 
 209. 
 Enforcement of payment of, 142, 
 
 143, 270, 294. 
 Forfeiture of shares if not paid, 
 
 143, 270, 294, 322. 
 Shareiiolders in arrear, in respect 
 
 of, cannot vote, 151, 206, 294. 
 Must have been paid before trans- 
 fer, 82, 142, 273, 294. 
 Meaning of term, etc., 92. 
 How made, 93. 
 
 Notice of, 93, 143, 214, 270, 294. 
 Interest on arrears, 94, 142, 209, 
 
 294. 
 Must be impartial and uniform, 94. 
 When none have been made, 94. 
 Made by Directors, 93, 142, 269, 
 
 294. 
 Ten per cent, within first year, 
 
 143, 294. 
 Salb of Stock in Mining Company, 
 
 when unpaid, 225. 
 Adjustment of, 322. 
 Cantankruods Shaiieholder. 
 
 How treated, 46. 
 Capital. 
 
 Of company, 14, 131, 2.18, 293, 307. 
 Division into shares, 15, 131, 2.58. 
 Must be stated in petition, 131,259. 
 Amount of each share, 16, 131 , 258. 
 Stock, definition of, (57. 
 Difference between nominal and 
 
 paid-up, 14. 
 Distribution of, 314. 
 Dividends must not be paid out of, 
 
 95, 275. 
 May be increased, 15. 134, 262, 
 
 289, 355. 
 Allotment of, when increased, 134, 
 
 262, 289. 
 May be decreased, 15, 135, 262, 
 
 289, 325. 
 liona fide character of increase or 
 
 decrease of, 136, 263, 290. 
 Penalty for false statement as to, 
 239. 
 
INDEX. 
 
 385 
 
 Cash Book, 00. 
 Cash in hand, (31. 
 
 CEItTIFICATE OF SxOCK, 
 
 Definition of, 7'2. 
 
 P'orm of, 180. 
 
 Shareliolder entitled to, 7.3, 
 
 Issue and suii'ender of, 73. 
 
 LoRs of, 74. 
 
 Indemnity on issue of new, 74, 214 
 
 Form of Indemnity, 180. 
 Thider Mining Acts, 225, 227, 321 
 Change of Name, 139, 232, 288, 328. 
 Chairman. 
 Election of, 42, 49, 151. 
 May vote. 41, 151. 
 Of Board Directors, 49. 
 Chahter.— ,S'('<; under Letters Patent. 
 Chief Place of Business, 13, 130, 
 258, 276, 298. 
 
 Change of, 13, 146, 265, 276. 
 Chinese Company. 
 
 Not authorized, 344. 
 Commencement of Business, 17. 
 Company. 
 
 Definition of, 1. 
 
 Inducements to formation of, 2, 
 
 111. 
 Ofiticcs of, 13, 130, 258. 276, 298. 
 Name of, 11, 129, 133. 
 
 Change of, 139, 233, 260. 
 Powers of, 130, 139, 264. 
 Object of, 130, 258. 
 May issue preference stock, 76, 
 
 137, 320. 
 Place of operations and head ofiBce 
 
 of, 130, 258, 276. 
 Must keep books, 52, 152, 155,270, 
 
 290, 315. 
 Obligations, etc., of, not affected 
 
 by change of name, 139, 261. 
 To make returns, 1.55, 172, 241. 
 
 315. 
 Not to buy certain stock, 160. 
 When contracts, etc., binding on, 
 
 160, 279. 
 Formation of, under Dominion 
 
 legislation, 243. 
 Non-liability, in respect of trusts, 
 
 142,282. 
 Relation of shareholders tovv rda. 
 
 102. I 
 
 Residence of, 13. ! 
 
 Incorporated from date charter i 
 133, 260. I 
 
 "One Man," 115. \ 
 
 May apply for extended powers, 
 
 133,166,261. 
 Liability of, when menabers less 
 
 than five, 165. 
 To make declaration, 301. 
 W.S.W.M.— 26 
 
 COJIPANIES. 
 
 Amalgamation of, 167. 
 Beincorporation of existing, 169 
 171, 278. ^ ' 
 
 E.xtra-Provincial, may obtain Li- 
 cense for certain purposes, 171 
 Contracts. 
 
 Between directors and company, 
 
 For payment of shares otherwise 
 
 than m cash, 77, 265. 
 Method of drafting, etc., 65 
 Made by promoters, to be specified 
 
 in prospectus, 281. 
 Power of company to enter into. 
 
 147, 279, 297, 313. 
 When binding, 160, 279, 297 313 
 Need not be sealed, 65, 1()0, 279 
 313. * 
 
 Conversion. 
 
 Of a business into a company 111 
 Corporator. ' 
 
 Definition of, 08. 
 Creditors of Company. 
 
 May inspect books, 154, 271. 
 Rights of, continued, 137, 261. 
 Position of, where capital reduced 
 
 135, 263, 325. 
 Entitled to inspect books and make 
 
 extracts, £6, 154, 271. 
 Rights of, against shareholders 
 
 104, 144, 274. 
 Protection of, 329. 
 
 D. 
 
 Death of Memher, 272. 
 Debenture. 
 
 Definition of, 68. 
 
 Company may issue, 149, 268, 289. 
 
 To be for fixed amounts as #100. 
 «500, ()8. 
 Declaration. 
 
 To be made by company, 301. 
 Deed. 
 
 Method of drafting, etc., 65. 
 Deposit. 
 
 Recovery of, 10. 
 Directors. 
 
 Introductory remarks, etc., 19. 
 
 Acceptance of office by, 20. 
 
 Provisional, 21, M5, 265. 
 
 Board of, number of, 21, 145, 265. 
 
 290, 358. 
 
 Vacanies in, 20, 145, 267, 291. 359. 
 Changes in number of, 146, 265. 
 
 291, .359. 
 
 By-law for, 195, 265,291. 
 Meetings of, 47, 49, 148, 360. 
 
n 
 
 386 
 
 INDEX. 
 
 DiBECTOKS — Continued. 
 
 Quorum of, 47, 360. 
 
 Remuneration of, 22, 148, 267. 
 
 Qualification and disqualification 
 of, 25, 26, 145, 147, 265, 290, 358. 
 
 Acts of lie facto valid, 26. 
 
 Retirement of, 26, 145, 267. 
 
 Election of, 27, 145, 266, 2!»1. 
 
 Term of of!ice of, 30, 147, 266, 291. 
 
 Powers of, 31, 147, 267, 291, 358. 
 
 Status of, 31. 
 
 Right of, to see accounts, etc., 82. 
 
 Contracts between, and company, 
 32. 
 
 Power to remove, 20. 
 
 Preference shareholders may se- 
 lect, 22, 137. 
 
 Names, etc., must be recorded, 58, 
 153, 271, 330. 
 
 Failure to elect, 145, 267, 291. 
 
 May make by-laws, 147, 149, 267. 
 
 Regulations as to meetings, 49. 
 
 Transfers should be considered by, 
 81, 141, 272. 
 
 Rotation of, 359. 
 
 Proceedings of, 360. 
 
 Pledging their credit for benefit 
 company, 33. 
 
 Remarks concerning, 34. 
 
 Cannot vote by pro.xy, as such, 47. 
 
 Proceedings and regulations of, 48. 
 
 Frauds of, 105. 
 
 Interested in construction com- 
 pany, 106. 
 
 Secret gifts to, 106. 
 
 Purchases from the company and 
 at foreclosure sales, 84, 107. 
 
 Loans by, to the company, 108. 
 
 Mortgages by the company to, 108. 
 
 Right of company to give a mort- 
 gage or assignment of its pro- 
 perty to, 108. 
 
 Must use ordinary care and dili- 
 gence, 109. 
 
 Chairman or President of Board 
 of, 42, 49, 145. 
 
 Register of, 53, 210, 330. 
 
 Majority to be British subjects 
 under Dominion Act, 265, 290. 
 
 Allotment of stock to, in order to 
 qualify, 25. 
 
 First, must be applicants and 
 shareholders, 131, 145, 258, 290. 
 
 Refusing inspection of books, pen- 
 alty for, 154, 160, 271. 
 
 May hypothecate, mortgage or 
 pledge the property of the com- 
 pany, 149, 269. 
 
 Liability of, for loans to sharehold- 
 ers, 161. 275, 314. 
 
 Directors — Continued. 
 Liability of , for wages, 161, 227, 275, 
 non-use of word 
 limited, 138, 280. 
 transfer of shares 
 to insufficient per- 
 son, 141, 272. 296. 
 declaring dividend 
 improperly, 160, 
 275, 295, 314. 
 failure to make re- 
 turns, 158, 172. 
 Act respecting, 234. 
 Discount. 
 Sale of stock at, 70, 201, 268. 
 
 under Ontario Min- 
 ing Act, 226. 
 Dividend. 
 
 Regulations respecting, 95, 275, 
 
 295, 360. 
 Nature of, 95. 
 Cannot be enforced until declared, 
 
 97. 
 Stock, 97. 
 
 Discretion of Directors as to de- 
 claring, 98, 147, 267, 295. 
 To whom the company is to pay, 99. 
 To whom it belongs, 99. 
 Must be equal and without prefer- 
 ence, 100. 
 When declared, is a debt due abso- 
 lutely to shareholders, 101. 
 Application of, to payment of 
 debts due by the shareholders 
 101,268. 
 What are profits, to entitle to divi- 
 dend, 96. 
 Directors may make by-laws re- 
 specting, 147, 267. 
 Liability of Directors for impro- 
 perly declaring, 160, 275, 295. 
 Dominion LEciisLATioN. 
 Instructions for forming a com- 
 pany under, 243. 
 List of papers and forms required, 
 
 249. 
 An Act respecting the incorpora- 
 tion of Joint Stock Companies 
 by Letters Patent, cap. 119, 
 R. S. Canada, 257. 
 An Act to amend the Companies 
 Act, 285. 
 
 E. 
 
 Election. 
 
 Of Directors, etc., mode of, 27, 
 145, 266. 
 Executors. 
 
 Liabilities and rights of, 144, 274. 
 
 r; 
 
 r 
 
 I- 
 
INDEX. 
 
 387 
 
 EXTRAORDINAIIY MkETINOH, 37. 
 
 Expulsion of Stockholukrs, 102. 
 Extra-Provincial Companies. 
 
 May be licensed, 171, 228. 839. 
 
 Must appoint attorney, 172, 340. 
 make returns, 172. 
 
 Registration of, 341. 
 Expenses, Pueliminaky, 9. 
 ExPENDiiuRE, Statement of, n't. 
 
 F. 
 
 False Statements, liability for, 1G4, 
 230. 
 An Act to prevent, 239. 
 Fees. 
 
 Schedule of, payable on Letters 
 Patent, etc., 163, 248, 299, 305, 
 378, 379, .381, 382. 
 Must be paid in advance, 103. 
 For taking' affidavits, etc., 122. 
 advertising in Ontario Gazette, 
 121. 
 Fines. 
 
 By-laws respecting, 148. 
 Forms. 
 Certain blank, furnished by Sec- 
 retary's department, 132, lo9. 
 Alteration of, 338. 
 Table of, x. 
 Forfeiture of Shares, 90, 143, 270. 
 Notice before, 90, 143, 270. 
 Holder still liable on, 90, 270. 
 Of charter, W'), 282, 298. 
 Foreign Companies. 
 
 May obtain license, 171, 228. 
 
 H. 
 
 Head Office, or Chief Place of 
 
 Business, 13, 130. 
 Where situate, 130, 276. 
 Books, etc., to be kept at, "),!, 130. 
 Service of notice at, 130, 276, 298, 
 Change of, 13, 140, 276. 
 
 by-law for, 197. 
 
 I. 
 
 Incorporation. 
 
 By Letters Patent, 11. 
 Infant as Subscriber, 9. 
 Inspection of Books, oO, 154, 271. 
 Inspector, may be appointed, 159, 
 333. 
 
 Powers and duties of, 159, 334. 
 Interest on Unpaid Calls, 94, 142, 
 
 269, 294. 
 Income, Statement of, 55. 
 Inst.alment Scrip. 
 
 Form of, 179. ' 
 
 L. 
 
 Land. 
 
 Power of company to hold, 140, 
 
 204,289,302. 
 Forfeiture of, 141. 
 Letters Patent. 
 
 Incorporation by, 11, 128, 258. 
 Formerly only petitioners incor- 
 porated, 10. 
 Number of persons required to 
 
 obtain, 128, 258. 
 Conditions before issue of, 129, 258. 
 Name and objects different iFrom 
 that in petition or notice, 133. 
 200. 
 To be entered in book, 152, 271. 
 Not void for irregularity, l(i4, 280 
 Fees on. 103, 248, 299, 305, 378, 
 
 379, 381, 382. 
 With extended powers, 166, 261. 
 Notice of issue of, 134, 20O. 
 Forfeiture by non-user, 105, 282, 
 
 298. 
 Revocation of, 165. 
 May be surrendered, 106. 
 Liability. 
 
 Of members on stock. H(, 1 M, 271 
 294,31.s 
 for carrying on with 
 less than tive mem- 
 bers, 105. 
 Company not affected by certain 
 changes, 135, 201. 
 How incurred, 80. 
 How repudiated, 80. 
 How terminated, 88. 
 Miscellaneous cases of, 84. 
 Of an agent as transferor or trans- 
 feree, 88. 
 Limited, 111. 
 
 Of Directors for servants' wages, 
 
 101, 227, 275, 292. 
 
 for transfers of shares, 
 
 141, 272. 
 for false statements, 
 
 101, 230. 
 Act respecting, 234. 
 Continued on forfeited shares, 90, 
 
 270. 
 No, under certain Mining Acts, 
 224, 220, 321. 
 License. 
 Granted certain companies, 172, 
 228, 340. 
 Lien. 
 Definition of, 84. 
 
 " IjIMITED." 
 
 Must be added to name of com- 
 pany, 12, 129, 137, 280, 307. 
 
V',' 
 
 388 
 
 INDEX. 
 
 !^: 
 
 " Limited " — Continued, 
 
 MuHt not be abbreviated, 138. 
 Word niUHt be used iu notices, 
 etc., 138, 280. 
 Loans. 
 
 To shareliolders, not to be made, 
 161, 27.-), 292. 
 
 M. 
 
 Majority of Voteh. 
 
 Sliall elect, 42, l-'il, 206. ' 
 Man'itoha. 
 
 Synopsis of Statute, 379. 
 Manaoek. 
 
 Atfreeinont appointing, 215. 
 Mauuiei) Women. 
 
 As shareholders, 8. 
 Meetinos. 
 
 Scope of tlie subject, 3fi. 
 
 Notice of, 3(5, 14'.), loO, 200, 2()(1. 
 
 For organization, 37, 134, 200, 331, 
 30,-). 
 
 Annual, when hold, 149, 206, 332. 
 
 Object, to be expressed, 150, 266. 
 
 Dissolution of, l.")0. 
 
 President to preside at, 42, 151. 
 
 Ordinary and extraordinary, 37, 
 355. 
 
 Procedure at general, 42, 356, 369. 
 
 Quorum at, 39, 150. 268. 
 
 Voting at, 40, 41, 151, 266. 
 
 elsewhere than at, void, 47. 
 
 Who may vote at, 41, 151, 266. 
 
 Where held, 38, 148, 266. 
 
 Adjourned, 46, 151. 
 
 Stockholders can act only at, 47. 
 
 Minutes of, 43, 49, 55, 155, 336. 
 
 Of Directors, 47, 148. 
 
 Proceedings at Directors' meet- 
 ings, 47. 
 
 Directors may make by-laws re- 
 specting, 148, 26f). 
 
 Special, may be called by share- 
 holders, 149, 200, 279, 355, 
 Memorandum of Agreement. 
 
 Contents of, 131. 
 
 Form of, 187. 
 Memoranddjf of Association. 
 
 Contents of, 307. 
 
 Form of, 187. 
 Minutes. 
 
 Of meetings, signing of, 43, 49. 
 
 Mode of entering, 49. 55. 
 
 Must be kept, 155, 336. 
 Mining Companies Act, 221, 
 
 Powers of, 222. 
 
 No personal liability, 224, 321. 
 
 Stock certificate, what to contain, 
 224, 321. 
 
 Mining Companies AcT—Continued. 
 Documents issued, what to ooii' 
 
 tain, 225, 321. 
 Returns from, 228. 
 Mortgage. 
 Definition of, 84. 
 
 Directors may the property of the 
 company, 149, 269. 
 Mortgagors may vote, 113, 274. 
 Mo' .gaoees not personally liable, 
 
 144, 274, 319. 
 Money. 
 How to send, and to whom pay- 
 able, 121. 
 Motion, how decided, 44. 
 
 N. 
 
 Name of Company, 11, 129, 258, 287. 
 Must contain word " Limited," 
 
 129, 137, 280. 
 Must be displayed, 137, 280, 329. 
 Should indicate object, 130. 
 Not that of any other Company, 
 
 or pari lership, 129. 
 Exclusive riglits to, etc., 12. 
 Chang' ^1, 139, 233, 260, 288, 312, 
 328. 
 petition for, 198, 33. 
 not to affect suits, etc. 
 1.H9, 233, 261, 288, 
 312. 
 Names. 
 
 In notice and petition, 131 2.58, 
 287. 
 Directors and shareholders to 
 be entered in books, ,i3, 153, 
 271. 
 Newspaper, Notices in Local, 191. 
 Nominal Capital, 14. 
 New Brunswick. 
 
 Synopsis of Letters Potent Act, 
 48 Vict. 1885, cap. 9, 376. 
 North West Territories. 
 
 Synopsis of the Companies Ordi- 
 nance, 1888, cap. 30, 380. 
 Notaries. Fees, 122. 
 Notice. 
 
 Of application for Letters Patent, 
 
 132, 244, 251, 2.58, 287. 
 
 not required under Ontario 
 
 Act, 132. 
 
 change of head office, 146, 276. 
 
 protests of Directors against 
 
 illegal acts, 142, 160, 275. 
 allotment of shares, 7, 178, 265. 
 calls, 93, 143, 214, 270, 294. 
 meetings, 37, 149, 191, 200, 
 265. 
 
INDEX. 
 
 389 
 
 Notice — Continued. 
 
 application for Supplementary 
 Letters Patent, 13G, 1()7, 
 
 atii, ayo. 
 
 publication of certain Bylaws, 
 
 14G, 'JG6. 
 adjourned meetings, 4(i. 
 DirectorB' meetin^ja, 47. 
 before forfeiture of shares, 90, 
 
 143, 214, 270, 353. 
 application for extended pow- 
 ers, 16(i, 2()'J. 
 issue of Letters Patent, etc., 
 133, 2(10, 2()4. 
 May be served by post, 152, 277, 
 
 363. 
 In Ontario Gazette, rej^ulations re, 
 121. 
 lej,'al proceedings, 151,276, 331, 
 337. 
 " No personal liability " to appear 
 on certain documents, 225. 
 Nova Scotia. 
 
 Synopsis of the Companies Act, 
 R. S. 1884, cap. 79, 382. 
 
 0. 
 
 Object. 
 
 Of Company, 13, 130, 258. 307. 
 Office ok Chief Place of Business. 
 
 Company must have, 13, 130, 276, 
 307, 32!). 
 
 Notice of change of, 14G, 276, 329. 
 Officers. 
 
 Directors may appoint and re- 
 move, 145, 147, 2 j7, 292. 
 
 Penalty for false entries in books, 
 153, 271. 
 Liability of, for refusal to allow 
 inspection of books, 154, 160, 271. 
 Ontario Legislation, 120. 
 •' One Man " Comi'any, 115. 
 Ontario Gazette. — See under Notices. 
 Operations of Company. 
 
 Where carried on, 131. 
 Ordinary Meetings, 37, 355. 
 Organization, Meeting for, 134. 
 
 P. 
 
 Paid-up Capital, 14. 
 Payment. 
 
 Of Directors and President, 22, | 
 148, 268. 
 fees before issue of Letters 
 
 Patent, 121. 
 calls, 93, 142, 269. 
 Partnership. 
 
 Conversion of a, into a Joint 
 Stock Company, 111. 
 
 Penalty. 
 For neglect to use word " limited," 
 
 138, 280. 
 For false statements as to capital. 
 
 239. 
 For false entries in, or refusal to 
 allow inspection of hooko 
 153, 151, 271, 2117. 
 carrying on with less than 
 
 five shareholders, 1()5. 330. 
 default in making vearly 
 i statements, 158,172,242. 
 
 Limitation of, 242. 
 Personal Property. 
 
 Company may acquire, 110. 
 Petition. 
 For Letters Patent, 129, 181,246. 
 
 259, 287. 
 Evidence of. 131, 259, 288. 
 May ask for special provisions- 
 
 132, 259, 288. 
 Form of, 181, 2.J2. 
 For Supplementary Letters Pa- 
 tent, ]3ti, 193, 261. 
 change of name, 198. 
 License for Extra-Provincial 
 Company, 173«. 
 Petitioners, formerly only incor- 
 porated, 16. 
 Must be bona fide holder of shares, 
 132. 
 Place of Business, 13, 131, 258, 276, 
 
 307, 329. 
 Pledge. 
 
 Definition of, 84. 
 Of stock, b-i. 
 
 Company may, iis property, 149,269 
 Poll, how taken, 45, 151. 
 Power of Attorney. 
 To sign petition, etc., 184. 
 Extra-Provincial Company must 
 give, 172, nnb. 
 
 POWKKS. 
 
 Of Legislature of Ontario, 129. 
 Directors, 31, 148, 267, 291, 358. 
 Company, 130, 139, 264. 
 
 to issue bonds and 
 debentures, 149,268. 
 mortgage proper- 
 ty, 149, 268. 
 may apply for ex- 
 tended, 166, 261, 
 President. 
 Shall be elected by Directors, 145, 
 
 267. 
 Shall preside, 42, 151. 
 Payment of, 23, 148. 
 Preferential Stock, 76, 137, 320. 
 Preliminary Expenses, 9. 
 Prince Edward Island, 
 
 Synopsis of 51 Vict. cap. 14, 382. 
 
890 
 
 INDEX. 
 
 li-- 
 
 m 
 
 '1. 
 
 Pnoor. 
 Of by-laws having been sanotiou- 
 ed, 14(5, 263, 
 Lonn jide character of increase 
 or decrease of stock, 13(), 2(>2. 
 Matters by affidavit, 133, 2()4. 
 Protest of Directors against illegal 
 acts, 142, 100, 2!»r). 
 
 PllOlIOTERS. 
 
 Definition of, 100, 236. 
 Frauds of, 100. 
 
 PUOHI'ECTUS. 
 
 Form and contents of, 3, 177, 335. 
 Effect of misrepresentation in, 3, 
 
 235, 347. 
 Variation from, 5. 
 When for a mining company, 225. 
 Liability for statements in, 235, 
 
 347. 
 ■ To specify contracts, 281. 
 
 PllOXY. 
 
 Meaning of, 120, 
 
 by-laws respecting, 
 148, 206, 292. 
 Holders of, must by shareholders, 
 
 under Dominion Act, 266. 
 Form of, 304. 
 
 Directors cannot act or vote by, 47. 
 Shareholders may vote by, 41, 151, 
 266. 
 Purposes or Objects, 13, 130, 258. 
 
 Q. 
 
 Quebec Act. 
 Respecting incorporation of com- 
 panies, 286. 
 Quorum. 
 At general meetings, 39, 148, 150. 
 
 268. 
 At Directors' meetings, 47, 360. 
 
 R. 
 
 Real Estate, company may own, 
 140, 204, 289, 302. 
 Restrictions as to, 140. 
 Forfeiture of, 141. 
 Reconciliation Statement, 61. 
 Recovery of Deposit, 10. 
 Regulations. 
 Lieutenant-Governor may make, 
 
 as to notices, etc., 132. 
 Of a company limited by shares, 
 
 351. 
 Of directors, 49. 
 Reoisteb. 
 
 To be kept, 53, 317, 330. 
 Registrar of Companies, 304, 309. 
 Reincorporation of Existing Com- 
 panies, 169, 278. 
 
 Remarks, General, 121. 
 Remittances, how made, 121. 
 Resbrve Fund. 167. 
 Residence ok Company, 13. 
 Resolutions. 
 Should be in writing, 54, 330. 
 Difference between a, aud a by- 
 law, 52. 
 Decision of chairman as to, 151. 
 Returns, annual, to be made, 155, 
 172, 228, 241, 315. 
 May be inspected, 150. 
 From mining companies, 228. 
 An Act respecting, 241. 
 
 limitation of penalties 
 under, 242. 
 Revocation of Charter, 105. 
 " Royal," use of word in name of 
 Company, 12. 
 
 S. 
 
 Scrip, form of instalment, 179. 
 Scrutineers, appointment of, 44. 
 Seal. 
 Necessity of, 47, 136, 276, 297. 
 Device of, 65. 
 Must contain word "Limited," 
 
 138,281. 
 Security to be given, 148, 267, 292. 
 Secretary. 
 
 Agreement appointing, 215. 
 Shares. 
 Certificate of, 72. 
 Amount of each, 16, 131, 258. 
 Application for, 6, 178. 
 Preference and ordinary, 70, 137, 
 
 320. 
 New, must be of same amount as 
 
 old, 130. 
 Price of, remarks re, 69. 
 Transfer and transmission of, 80, 
 
 82, 141, 272, 353. 
 Allotment of, 7. 74, 141, 265, 231. 
 Effect of unregistered transfer of, 
 
 142, 272. 
 Restrictions as to transfer of 82, 
 
 142. 273. 
 Redivision of, 135, 262. 
 Subdivision of, 263, 323. 
 Share warrants, 323. 
 Number, held by shareholder, en- 
 tered in book, 153, 271, 296. 
 Surrender of, 88. 
 Married women and infants as 
 
 subscribers for, 8, 9. 
 Remedies for non-payment of, 89, 
 
 144, 270. 
 Forfeiture of, 90, 143, 270, 353. 
 
II^DEX. 
 
 391 
 
 Shaiies — Continued, 
 Forfeiture of, notice in case of, 90, 
 1 13, 214, 270, 3,->3. 
 Liability continued, 90, 
 113,270. 3r)l. 
 Tender by sliareholder before for- 
 feiture, 91. 
 Improper cancellation of, 91. 
 Subscribers for, bound although 
 
 no stock allotted them, 8. 
 Issue of paid-up, 7H. 
 Conversion of, into stock, 3o4. 
 When not paid in cash. 77, 132, 
 
 2ti,5. 
 Re^^ister of, must be kept, 53, 153, 
 
 271. 
 Sale of, at premium or discount, 
 70, 201, 22(i, 2(58. 
 Shahejioi.deus. , . 
 
 Definition of, (57, 127. 
 Can act only at corporate meet- 
 ings, 47. 
 Where less than live, 1G5, 330. 
 Preference, may select Directors, 
 
 22, 137. 
 Wron},'s of, 105. 
 Business of, at meetings, 36. 
 List of, for voting;, 45. 
 
 to be made annually, 157, 
 
 209, 228, 241, 172, 315. 
 must be kept in books, 
 53, 153, 210, 315, 318. 
 Relation towards company, 102. 
 Expulsion of, 102. 
 Frauds by majority of, 109. 
 Directors must be, 145, 258, 290. 
 Rit;ht to vote, 151, 2(5(5. 
 Liability of, 144, 274, 318. 
 
 when capital decreased, 
 '■ *'• 135, 263. 
 
 continued when shares 
 
 forfeited, 90, 270. 
 under Ontario Mining 
 Act, 226. 
 No loan by company to, 161, 275, 
 
 292, 314. 
 Mav call meetings, 134, 200, 279, 
 
 2*93. 
 In arrear cannot vote, 151, 26(5,294. 
 Must approve of certain by-laws, 
 
 135, 146, 148, 263, 2(58. 
 May inspect books, 154, 271. 
 Show of Hands at meetings, 44. 
 SioNATcnEs, ordinary, should be used, 
 
 131. 
 Solvent Condition, Company must 
 
 be in, 199. 
 Statement of Affairs. 
 
 To be made annually, 155, 171, 228, 
 241,283,315, 
 
 Statemkst of Afkaihs— C<>/|Nhu<(/. 
 Penalty for default, 158, 171. 241. 
 Liability for false stat< . .nts, 164, 
 239. 
 Htatittkh, Table of, x, xii. 
 Statement, of Income and ICxpendi- 
 
 ture to be made, 55, 283. 
 Stock. 
 
 Definition of, (58. 
 Classes of, (59. 
 Watered or tictitious, 70. 
 how issued, 70. 
 by discount, 70. 
 under Mining Act, 201, 321, 
 sale of, on non-payment 
 calls, 1 13, 22.-., 270, 322. 
 opinions us to, 71. 
 is fictitious stock void, 71. 
 issue of. forbidden by (Quebec 
 
 Act, 72, 293. 
 shareholders may complain of, 
 72. 
 Property taken in payment at ex- 
 travagant valuation, 71. 
 Book and ^Memorandum of Agree- 
 ment, form of, 187. 
 Certificates of, 72, 180. 
 
 For Mining Companies 
 must conf vin certain 
 words, 225. 
 Surrender of outstand- 
 
 Alleged loss of, 74. 
 Allotment of, 7, 74, 141, 2(5.'), 293. 
 Methods of issuing, 75. 
 Preferential, 76, 137, 320. 
 When shares are not paid in cash, 
 
 77, 132, 2(55. 
 Paid-up Shares, 78. 
 Right of transfer of stock or 
 
 siiares, 80. 
 Precautions respecting transfers 
 
 of, 80, 141. 
 Transferor must have paid calls, 
 
 82, 142, 272, 294. 
 Registry of transfer, how made, 
 
 82. 
 Definitions of pledge, mortgage 
 
 and lien of, 84. 
 Pledge of, how made, 84. 
 Liability of members on stock, 
 84, 144, 274, 294. 
 how incurred and re- 
 pudiated. 86. 
 of Directors, on trans- 
 fer of, 141, 272, 296. 
 of an agent as trans- 
 feror or transferee, 
 88. 
 how terminated, 88. 
 
392 
 
 INDEX. 
 
 Ji 
 
 :r 
 
 262, 
 
 !l 
 
 Stock— Continued. 
 Gerlnin amount, niuot be taken 
 
 and paid up, 'IH',), 287. 
 DiapoHal uf amount paid up, 250, 
 
 287. 
 Amount of capital, \M, 2m, 287. 
 Allotment of, 7, 74, 141, 26.'".. 
 Increaso of capital, l'>, 134, 
 
 289. 
 Preference and ordinary, 1.S7. 
 Decrease of capital, IH,'), 262. 
 By-laws regulating, 1B4, 135, 147, 
 
 262, 289, 2U2. 
 Not tranitferable wlien calls un- 
 paid, 142, 272. 
 Deemed personal estate, 141, 265, 
 
 314. 
 Ten per centum must be called 
 
 the first year, 143. 
 Forfeiture of, 143, 270. 
 How joint holders may vote, 144. 
 Sale of Mining, below par, 227. 
 Conversion of shares into, 354. 
 Transfer of, may be refused, 141, 
 
 272, 315. 
 Hale and transfer of, 141, 272, 315. 
 Liability of shareholders for 
 
 amount of, 84, 144, 272, 294, 31S. 
 Book, Bubscribers to, bound, 8. 
 Amounts paid and unpaid on, to 
 
 be entered in books, 153, 271, 296. 
 Transfers of, to be entered in 
 
 books, 153, 211, 271, 296. 
 Of other corporations not to be 
 
 bought, unless, 160, 298. 
 Ledger, form of, 213. 
 Stockholdkr. — See Shareholder. 
 Btock-in-Tuade. 
 
 Agreement for sale of, 205, 290. 
 SuBSCKiBER, definition of, 67. 
 SuBscRii'TioNs unpaid, 103. 
 
 BUPPLEMKNTAHY LETTERS PaTENT. 
 
 How obtained, 136, 166, 261, 290. 
 
 Fees on, 163. 
 
 Must be entered in books, 152, 272. 
 
 Effect of, 136, 262. 
 Suit. 
 
 By and against Company, 152, 298. 
 
 Books to be evidence in, 155, 272. 
 
 Change of name not to affect, 139, 
 261. 
 Summary and List required annually, 
 155, 172, 228, 316. 
 
 T. 
 
 Transfer. 
 
 Of shares, 80, 142. 
 
 Transfer — Continued, 
 
 Of shares to be entered, 211, 272. 
 right of, 80. 
 restrictions as to, 82, 
 
 142, 315. 
 by debtor to the com- 
 pany, 273. 
 by personal represent- 
 ative, 274. 
 forged, 347. 
 Precautions respecting, 80. 
 Liability of directors on, 81, 141, 
 
 272, 315. 
 Should be considered by board, 81. 
 Company may refuse to register, 
 
 141, 272, 294. 
 Form of, 212. 
 Trustees. 
 
 Not personally liable, 144, 274, 295, 
 
 319. 
 Of shares, rights of, 143. 
 
 may vote, 41, 143, 275, 
 295, 315. 
 
 U. 
 
 Unreoistered Foreign Companies, 
 345. 
 
 V. 
 
 Vacancies in Voard directors, 20, 145, 
 
 267, 291, 3;!;. 
 Vote. 
 
 Who may, 41, 42, 143, 266, 315. 
 Each shan? to carry a vote, 40, 
 
 151, 266. 
 At general meetings, 45, 151, 266, 
 
 357, 369. 
 Majority to elect, 42, 151, 266. 
 Elsewhere than at meetings, void, 
 
 47. 
 Of two- thirds required, 135, 146, 
 
 263, ?,90. 
 To be computed on face value of 
 
 stock, 40. 
 Chairman entitled to a casting, 
 151, 266. 
 Vouchers, 6C. 
 
 w. 
 
 Wages. 
 Liability of directors for, 161, 227, 
 275, 292. 
 Watering of Stock, 70, 293. 
 Winding up of B. C. Companies, 346. 
 
 i|: 
 
R^ 
 
 The Trusts Corporation 
 
 OF ONTARIO. 
 
 OfTlces and Safe Deposit Vaults 
 Bank of Commerce Building. King Street, Toronto. 
 
 Capital, - - $1000,COO 
 
 Hon. J. C. Aikins, P.C, i. President 
 
 Hon. Sir R. J. Cartwriglit, K.C.M.G , 
 Hon. S. C. Wood, 
 
 Moss, Barwick & Franks, General Solicitors 
 
 Vice PrcsidenlH 
 
 Under the opiJi-ovnl of tlic liieiitoimnt (iovciiior in ('ouncil, the 
 Corporation is iiccepted i)y tlie llit>ii Court of .Iiistico as a TruHts 
 Cominiiiy for llie |)ur|)()Hfs of such ("oiirt, luul may be appointed to 
 and undertake any uf the fuUowiiij^ ortiees, viz.: 
 
 Executor, Administrator, Trustee, Committee of Lunatic, 
 Guardian, Receiver, Assignee, Liquidators, etc. 
 
 Acts as Agents for ICxccillorN, Tril<«t4'<>M iind cjthers. 
 
 Accepts and executes Tl'ilMtM of every descriiitinn I'roni Courts, 
 Corporations and Individinils. 
 
 Bonds, Debentures, Stock, etc., issued and couMtersi'ined. 
 
 Estates managed. Rents, Interest, Dividends, etc., collected. 
 
 Moneys received and carefully invested. 
 
 All Trust Investments are kept separate and distinct from the 
 assets of tlie Corporation. 
 
 Safe l^eposit Ho.xes to rent, easily accessible, :il»!>«ollitcly secure. 
 Bonds and all other securities HUiU'anteed if necessary. 
 
 Wills appointinj^ the (Jorporation Executors and Trustees are 
 received for safe custody, free of charge. 
 
 Solicitors bringing Estate or other business to the Corporation are 
 retained to do the legal work in connection there- 
 with. Correspondence invited. 
 
 A. E. PLUMMER, Manager. 
 
SPECIALTY OF 
 
 STOCK CERTinCATES, TRANSFER FORMS. CORPORATE SEALS, UTTER HEADS, CARDS. BONDS. TRADE MARKS. 
 AND ALL FORMS REQUIRED BY INCORPORATED COMPANIES. 
 
 GCROBB. Chref Engineer. A FRASER. Secylrrea-^ 
 
 Head Office 
 
 Toronto. 
 
I 
 
 OE MARKS. 
 
 ; Esq Pres 
 N, Vice Pres 
 
 Telephone 1506. 
 
 Cable Addrese 
 "Roaf." 
 
 ROAF, CURRY & 
 GUNTHER, 
 
 Barristers, Etc. 
 
 Offices, 23 Adelaide St. East, 
 
 (Comer Victoria) 
 
 Toronto. 
 
 William Roaf. 
 
 James R. Roaf, CommiBsioner for tiuel)ec. 
 
 James W. Curry, 
 
 Crown Attorney for City of Toronto. 
 Ernest F. Guntlier. 
 
 Cable Address, Telephone No. 573. 
 
 "Kingsmiil, Toronto." 
 
 KINGSMILL, SAUNDERS 
 & TORRANCE, 
 
 Barristers, Solicitors, 
 Notaries, Etc. 
 
 Union Bank, Biiildinri, 
 
 19 WeUington St. West, Toronto. 
 
 Niool Kingsmiil, Q.C. J. J, Kinifsmill, Q.C. 
 
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 Telephone 2258. 
 
 JOHNSTON & ROSS, 
 
 Barristers, Solicitors, Etc., 
 
 Rooms 22 d: 24 " The Janes Buildings," 
 Toronto. 
 
 E. F. B. Johnston, Q.O. 
 Qeorge Ross. 
 
 Cable Address, " Blakes Toronto." 
 
 BLAKE, LASH & CASSELS, 
 
 Barristers, Solicitors, Etc., 
 
 Canadian Bank of Commerce Building, 
 
 Cor, King and Jordan Sts., 
 
 Ton into, 
 
 Edward Blake, Q.C. S. H. Blake, Q.C. 
 
 Z. A. l.a»h, Q.C. Wiilter Cassels, Q.C. 
 
 A. .Mackenzie. W. H. Blake. Hume Blake. 
 E. F, Blake. A. W. Anglin. T. D. Law. 
 
 W. A. H. Kerr. Waller Gow. Miller Lash. 
 
 Cable Address, " Bristol Toronto," 
 Telephone Xo. 963. 
 
 BRISTOL & CAWTHRA, 
 
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 Lojidon <£• Canadian Chambers, 
 1U3 Bay Street, 
 
 Toronto. 
 
 Edmund Bristol. W. H. Cawthra. 
 
 B. K. Barker. 
 
 Telephone 372. 
 
 EDGAR & MALONE, 
 
 Barristers, Solicitors, Notaries, 
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 Toronto Office: General Trusts Bdlding, 
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 Rat Portage Office ; Edgar, Malune •(,• 
 Bird. 
 
 Hon. J. D. Edgar, (^C. E. T. Malone. 
 J. F. Edgar. A L. Malone. Fred. Langmuir. 
 
 Solicitors for The Toronto General Tnists Co.; 
 The Central Canada Loan & Savings Co.; The 
 Provident Investment and Mortgage (iuarantee 
 Co. of Ontario, Limited, and The Iniiierial 
 Life Assurance Co. 
 
 Paul Campbell. 
 
 Telephone No. 50. 
 
 \Vm. Campbell, 
 
 PAUL CAMPBELL, 
 
 Assignee, Liquipator. 
 
 CAMPBELL «Sc CAMPBELL, 
 
 Accountants. 
 
 Offices : yo. 206 McKinnon Building, 
 Melinda Street, 
 
 Toronto, 
 
McGIBBON, HOGLE & MITCHELL, 
 
 Advoca lEH, Solicitors, eti 
 
 Canada Life TiuHduKj, Montreal. 
 
 
 B. D. McGibbon, Q.C. Arthur V. Hogle. Victor E. Mitchell. 
 
 ComtniBgioners for Ontario, Mauitolm, etc., etc. 
 
 I 
 
 PERKINS & ERASER, 
 
 B.^RRisTERs, Solicitors, 
 Notaries, etc., 
 
 Supreme Court and Departmental Agents. 
 
 Offices : 64 S2)arks >SI., 
 
 Ottawa, Out. 
 
 W. C. Perkins. 
 
 A. W. Frascr. 
 
 CODE & BURRITT, 
 
 Barristers, Solicitors, etc. 
 
 .Supreme Court and Parliamentary Aeente. 
 
 CarleloH Chambers, 
 
 74 'Sparks St., Ottaum, Canada. 
 
 R. G. Code, E. F. Burritt. 
 
 Late of Melntyre, Code & Orde. 
 
 NELLLS, MONK & 
 MATHESON, 
 
 Barristers, Solicitors, 
 Conveyancers, etc. 
 
 Offices : 22 Metcalfe St., Ottawa, Ont. 
 
 Solicitors for the Quebec Bank. 
 
 Suprente Court and Departmental Agents. 
 
 Thomas F. Nellis, li. H. Mathesou, 
 
 Henry C. Monk. 
 
 BELCOURT & RITCHIE, 
 
 Barristers, Solicitors, etc., etc., 
 
 FOR Ontario and Quedec, 
 
 OTTAWA. 
 
 N. A. Belcourt, LL.M.. LL.D., M.P., 
 
 Advoeate and Conniiiasioner for the 
 Province of liuehec. 
 T. A. Kitchie, 
 
 Crown Attorney for Carlcton. 
 
 Advocates for The Hank of Ottawa, 
 
 " " The Union Bank of Canada, 
 
 " " The Merchants' Bank of Canada. 
 
 N. B.— Biwlness in the Province of Q\ieliee 
 will receive the personal attention of Mr. Bel- 
 court, who is u member of the Bar of both 
 Provinces. 
 
 COLLIER & YALE, 
 
 St. Paid St., St. Catharines, 
 and 
 
 COLLIER & BURSON, 
 
 Front St., T/iorold. 
 
 Barristers, Solicitors, 
 Proctors, etc. 
 
 H. H. Collier. H. Yale. 
 
 G. B. Burson. 
 
 Registered Cable Address : 
 
 " Kichards, Winnipeg." 
 
 RICHARDS & BRADSHA W 
 
 Barristers, Attorneys, 
 
 Solicitors, Notaries, etc. 
 
 I V in n ipeg. Ma n itolia . 
 
 A. K. Bichards. 0. W. Bradshaw. 
 
 .Solicitors for The Ureat NorthWest Centrol 
 Railway Company ; The Winnipeg Water Works 
 C(mipany ; The North-West Fire Insurance 
 Company ; The .Selkirk Transportation and 
 Cold .Storage Company ; The Lake Winnipeg 
 Gold Mining Company ; The Alliance Trust 
 Company of Dundee, .Scotland ; Tlie C^anadian & 
 American Mortgage &, Trust Company, etc., etc. 
 
PELLETIER & FISET, 
 
 AVOCATS, 
 
 125 line St. Pierre 
 
 (Edifice de la People's Bank of Halifax) 
 
 Basnc- Ville, Quebec. 
 
 Ii'Hou. L. P. Polletier. LL.M., Q.C. 
 
 (Ex-Atiorney General) 
 E. L. Fiset, LL.B. 
 
 Cable A.ddreB8, " Whitesco." 
 
 WHITE, OHALLORAN & 
 BUCHANAN. 
 
 Advocates, Solicitors 
 
 & ATTOKNEVa. 
 
 C'oimnlHsloiicra fi)i- all the Prnvinnes. New- 
 fouiidlimil, and the States of New Voik, Ohin 
 and Vertnoiit. 
 
 Xeif York Life Building, 
 
 Place d' Amies Square, Montreal. 
 
 W. J. White. Geo. P. OHalloran. 
 A. W. Patrick Buchanan. 
 
 Cable Address "Winki.er" Vancolver. 
 
 WILSOX & SENKLER, 
 
 BAUniSTERS & 
 
 Solicitors. > 
 
 ERASER & WOODRUFF, 
 
 Barristers, Solicitors, 
 Notaries, etc. 
 
 Inns of Court Ihiildinp, corner of 
 
 Hastings and Hamilton Streets. Office : Howard Block, 
 
 IT . -^T^r^^r^T^T, „ A'iagara Falls, Canada. 
 
 VANCOUVER, B. C. 
 
 Charles "Wilson, Q.C, J, H. Senkler. Alex. Fraser, 
 
 W. E. Woodruff. 
 
 E. P. Davis, Q.C. 
 D. G. Marshall. 
 
 j.l:g. Abbou. iWELDON & McLEAN, 
 
 Telephone 170. P.O. Box 768. 
 
 DAVIS, MARSHALL, MAC- 
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 Barristers, Solicitors, etc. 
 
 OJhces over Bank of British Columbia, 
 Vaucourer, B.C. 
 
 Cable Address, "Daraarell," 
 Al Telegraphic Code, 
 
 BaRRISTE tS AND ATTORNEYS, 
 
 i^aint John, - New Brunswick. 
 
 Cable Address, "McLean, St. John." 
 
 Solicitors iu New Bmnawick for the Bank of 
 Montreal, Canadian Pacific Railway Company, 
 Dominion Express Co., Pidlnian's Palace Car 
 Coy., Alexander (iibson & Sons, Ltd., (iuardian 
 Assnrancc Co., the Shore Line Hallway C'o., 
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 Co. of Bangor (Mari"e), Caledonian Insurance 
 Co. of Eilinbiirgh. Western I'iilon Telegraph 
 Coy., Saint .John Railway C'umpany (Consolida- 
 tion of Street Ry. anil Gas Coya.) Massey- 
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 McPHILLIPS, WOOTTON & BARNARD, 
 
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 B,in/, of Montreal Chambers, Victoria, Britiih Columhia. 
 
 P.O. Drawer 44. Cable Address, " Philtonbar." 
 
 A. B. C. code andBejIford McNeill's Mining code. 
 
 EDWARDS & HART-SMITH, 
 
 Chartered Accountants. 
 Experts in matters affecting the formation, incorporation, management and 
 accounts of companies, 
 
 TORONTO, ONTARIO. 
 
 Offices : Bank of Commerce Chambers. Telephone U63. 
 
 Geo. Edwards, F.C.A. A, Hart-Smith, C.A. 
 

 He.nrv Carscallen, Q.C, 
 
 
 Edwin D. Cahill, D.\rcy R. Tate. 
 
 HALL, CROSS, BROWN, 
 
 CARSCALLEN k CAHILL, 
 
 SHARP & COOK, 
 
 Barristers, 
 
 
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 Advocates, Barristers and 
 
 Notaries, etc. 
 
 Commissioners, 
 
 0/^ce«.— No. IG James St. South, 
 
 Temple Building, 
 
 HAMILTON, ONTARIO. 
 
 Montreal, P.Q. 
 
 Solicitors for the Toronto, Hamil- 
 
 
 ton & Buffalo Railway Company ; 
 
 
 The Canada Screw Company ; The 
 
 John S. Hall, Q.C. 
 
 Gurney-Tilden Company (Limited) ; 
 
 Selkirk Cross, Q.C. 
 
 The Dominion Construction Com- 
 
 Albert J. Brown. 
 
 pany ; The Bradstreet Company 
 
 W. Prescott Sharp. 
 
 Commercial Agency ; The Electri- 
 
 J. Wilson Cook. 
 
 cal Power & Manufacturing Com- 
 
 
 pany (Limited). 
 
 COMPANY BOOKS. 
 
 CHAIRMAN'S HANDBOOK and Manual of Procedure at Meetings 
 of Shareholders and all Public Meetings ; cloth, ftl.OO; paper, oOc. Also 
 a larger -.vork, including Meetings of Municipal Councils and Church 
 Synods, etc.; cloth, 13.00; hf. cf., »3.75. 
 
 CHATTEL MORTGAGES. A new work, by R. E. Kingsford, LL.B. 
 To be issued early in iH'.n. 
 
 INSURANCE. A Handy Book, by F. S. Maclennan, Barrister ; 1897 ; 
 price, $1.60. 
 
 JOINT STOCK COMPANIES, formation of, under Dominion Act, 
 with the objects stated of all Companies organized at date of issue ; 
 1888; cloth, »1.00. 
 
 COMPANIES' LAW, by Sir N. Lindley; London, 1890; »8.00. 
 
 COMPANIES' LAW IN CANADA, by C. H. Stephens, Advocate ; 
 1881; «7.00. 
 
 LANDLORD AND TENANT Handy Book, 1897; »].00. Also, by 
 S. R. Clarke, Barrister, the most complete work published for Canada. 
 ftlO.OO. 
 
 BILLS OF EXCHANGE, Promissory Notes, etc., 2nd edition. By 
 Dr. Maclaren, Q.C. .?."). (lO. 
 
 MINING COMPANIES. A new work for Ontario and British 
 Columbia. By Messrs. Macpherson and Clark. Soon to be published. 
 
 COMMERCIAL LAW, a Treatise on. By Messrs. Macpherson and 
 Clark, Barristers. In preparation ; to be issued in 1898. 
 
 CANADIAN LAWYER. A Handy Boojt of the Laws, for the use of 
 Business Men in Canada. By a Barrister. Second edition — enlarged; 
 cloth, $1.50; half -calf, $2.0C. 
 
 Address: THE CARSWELL COMPANY, Limited. 
 
 Printers, Law Publishers, Etc., 22-30 Adelaide St. £., Toronto. 
 

 Nkw .m,,uki.. Used and Endorsed by the Ontario Government, 
 who have purchased more Remington Typewriters during the 
 past two years than all other makes eomhined. 
 
 Edison's Mimeograph 
 
 The Best Duplicator of Hand and 
 Typewritten Work 
 
 x,000 or more Copies from one Original. 
 
 s^-'^ — Send for Particulars. — =^^ 
 
 SFAOKMAN <& AROHBALD 
 
 MONTREAL AND TORONTO 
 
 Largest Dealers in Typewriters and Supplies in Canada 
 
 TELEPHONE No. 2329 
 
 HART & RIDDELL 
 
 Stationers 
 
 WHOLESALE 
 
 AND 
 
 MANUFACTURING 
 
 SOLE MANUFACTURERS OF 
 
 Frey's Patent Flat Open Blank Books 
 
 Lithographers, Engravers, 
 
 Embossers, Printers, etc. 
 
 Special Books for Joint Sfock Companies 
 
 ON HAND 
 
 2, 8, 4, 5 and 6 Column Journals and Cash Books always 
 on hand. 
 
 27 Wellington Street West, Toronto 
 
METALLIC 
 
 Vault, Office and Library 
 
 FURNITURE. 
 
 Combination Cabinet of Steel Furniture. 
 
 METAL TRUCKS, with Rubber Tire wheels, 
 
 METAL ROLLER BOOK SHELVES, 
 METAL PIGEON HOLES, 
 
 METAL DOCUMENT FILES, 
 
 METAL LETTER FILES. 
 Singly or in Cabinet Form. 
 
 THE OFFICE TPECULn MFG. CO., 
 
 XvUVIIXED, 
 
 TORONTO and NEWMARKET, ONT. 
 
B0 IT N0W. 
 
 Shannon File, 
 
 HELPS 
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 THE OFFICE SPECIALTY MFG. CO,, limited, 
 
 TORONTO and NEWMARKET, ONT. 
 
ASSESS 
 
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 THE BEST FRATERNAL SOCIETY IN THE WORLD, 
 
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 Prompt Settler 
 
 BENEFITS GIVEN BY THE I. 0. F. 
 
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 Up-to-date Manasiement. 
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 For Vonr Beneficiaries at Tour 
 Death. 
 
 4.— A Finieval Boneflt of $50. 
 
 5.— A Mortuary Benefit of SriOO, 81,000, 
 $2,000, *3,060, i?l,000 or as.OOO. 
 
 Tlie Sick and Funeral Benefits are 
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 THE COST IN THE I. 0. F. 
 
 A.— PUKNISHED BY THE SUBORDINATE 
 
 couivrs. 
 
 1 —Free Medical Attendancoof the Court 
 Physician within whose jurisdiction 
 you are taken sick, except where the 
 Court has hy hy-law dispensed with 
 such attendance, 
 
 B.— PUBNISHKn BY THK SUPREME COURT. 
 
 2.— A Sick Benefit of SH.OO a week for the „, !.,••. ., t ,^ t-i 
 
 first two weeks and ^^..m a week for , ^he cost of Joini.iB the T. O. F. ran Res 
 the next ton weeks, and, as provided f"^"'" ••?,''-™ J" *i'"P"' according to the 
 in Section 224 (.5) of tho C^onstitutioii amount of Benefit taken, 
 and Laws of the Order, ;a;).()0 a week Assessments range from 00 cents per 
 for an additional twelve weeks. month, or !?7.20 per year, at 18 years of 
 
 3.--.\ Total and Permanent Disabilityiage, to 83.00 per month or .•?3li y)eriyear. 
 Benefit of 82.J0, $500, $1,000, $1,500, at ,54 vears, per .•?1,000 of insurance taken 
 $2,000, $2,500. in the preferred class. 
 
 For further information apply to 
 
 ORONHYATEKHA, M.D., S.C.R., 
 
 Toronto, Ont. 
 
 JOHN A. McCILLIVRAY, Q.C., S.S., 
 
 Toronto, Ont. 
 Or any OflBlcer or Mem'ber of the Order. 
 
eSTABUSHEO 1HSA. 
 
 T01(011IT0 WII(E and \\m W01(I(g 
 
 GEO. B. MEAD0W5, Prop. 
 
 1 28 King Street West, Toronto, Opposite Rossin House. 
 
 Manufacturer op 
 
 Oniamental Wroitght Iron Work, 
 Bank and Office Railings, 
 Tellers' Cages, .... 
 
 Wiiulfw and Door Guards. 
 
 ARTISTIC BRASS AND ELECTRO FINISHES IN GRILLE WORK. ETC. 
 
 Catalogue and Estimates on Applicati 
 
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 D. PIKE, 
 
 
 MANUKACIURKR OF 
 
 TENTS, AWNINGS. FLAGS and SAILS. 
 
 Waterproof Horse and Wagon Covers, Life 
 
 Preservers, Bags, Lawn Hammocks, Etc. 
 
 Hoist and Wire Ropes Spliced. 
 
 188 King Street East, Toronto, Ont. 
 
 TENTS TO RENT. ^ 
 
 TELEI'HONE 1291. 
 
The Brown Brothers 
 
 I^^imited 
 
 ESST-A.BLISU'EID 1856. 
 
 Manufacturing Stationers and Bookbinders 
 
 64-68 KING STREET EAST, - - - TORONTO. 
 
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 Caligraph Typewriter 
 
 Edison's iVIimeograph i TYPEWRITER SUPPLIES 
 
 Esterbrook and Spencerian Pens \ 
 
 Wirt Fountain Pens 
 
 FULL LINES OF 
 
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 tauO 
 
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 STEAM YACnTS AND LAUNCnES. STEEL BOILEBS i,,9|cirA'i^N 
 
 Get Our Prices liefore Orderlnf;. 
 
 THE POISON IRON WORKS. TORONTO, CANADA. 
 
rs 
 
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 (lers 
 
 RONTO. 
 at Stock 
 
 s OF 
 
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 RKS 
 
 ine 
 
 
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 -JMf 
 
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 THE ! 
 
 Ontario Mutual Life 
 
 Head Office, Watefloo, Ont. 
 
 The Oldeat, LarReat- Strongest 
 
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 the World are Mutual 
 
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 BICE LEWISSi SON 
 
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 Ca«h In.'.Vmofor 18!Mi 7«'MlW 
 
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 Kfgcrvi- for ai'iMirity ol I'olicy- 
 
 hol.UT8,Di-f. 31, 18!)fl, Actuaries' 
 
 4i)ercont ■ d,17U,71ii 
 
 Surplus ovor all liabilitioa, Dec. 
 
 31, l^^flfi, Actuaries' 4 per cent... 21J,7J» 
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 llm., 4J per cent 308,800 
 
 This Company's an.piiy liifc— ir> or 2(1 year 
 Survivorsliip Distribution— is tUo most popu- 
 lar policy issued. Values hiindsome and 
 guaranteed. Options many and attractive. 
 
 HARDWARE 
 
 MERCHANTS 
 
 TORONTO, 
 
 ONT. 
 
 ESTABLISHED 1889 
 
 '_y 
 
 Imperial Paper Box Co. 
 
 GARDNER & WILSON, - - - Managers. 
 
 M,\Nri-AcriKKi;;. of .\i i. Kinds <iI'' 
 
 mmii nm bokes, mm imi mm ibmuic. 
 
 Transfer Cases . . 
 
 Document Fyle Boxes 
 
 ( FOR 
 
 Banks, Law and other Offices- Any Size Made to 
 Order on Short Notice. 
 
 STRICT ATTENTION GIVEN TO^ALL_ORDERS. 
 
 73 to 81 Adelaide Street West. - - - - TORONTO 
 
 TELEPHONE 7i.>. 
 
W. BARBER & BROS. 
 
 PAPER MAKERS, 
 
 GeorgetoiuHj Ont. 
 
 MAKE A SPECIALTY OF 
 
 Machine Finished Book Papers, 
 
 COLOl «:D SPKCIAUIIKS, 
 
 And Kf<^h-Grade Weekly News. 
 
 JOHN R. BARBER. 
 
 Canada Railwa) News Company, 
 
 lillSdIITEID, 
 
 General News and Advertising Agents 
 
 HEAD OFFICE : 
 
 No. I02 UNION STATION, - - TORONTO. 
 
 T. P. PHELAN, 
 
 MANAGER. 
 
 F. E. PHELAN, 
 
 SEORETARY-TREASUREr. 
 
I <^ \ 
 
 EMBOSSED 
 
 METALLIC CEILINGS 
 
 (oNK Ol' OUK DKSKiN^.) 
 
 These ceiliiif^s are made from mild annealed metallic plates, in a 
 great variety of desitins, suitable for every description of buildings, 
 includiiij,' Hospitals, Churches, Schools, Convents, Opera Houses, 
 Asylums, Offices, Stor> s. Residences, Etc. 
 
 The many advantages of their use as a substitute for wood and 
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 are highly artistic, do not harbor vermin or the germs of disease, and 
 possess splendid acoustic properties, in addition to many other points of 
 excellence over any other form of interior decoration. 
 
 We also manufacture ROOFING, SIDING, DOORS and LATHING. 
 
 Send for Catalogue, 
 
 The METALLIC ROOFING CO., Limited, 
 
 1191 King Street West. 
 
 'Phone G48I. TORONTO, ONT.