Company precedents for use in relation to companies subject to the Companies acts, 1862 to 1890 ... (Volume 1) online

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THE LIBRARY

OF

THE UNIVERSITY

OE CALIFORNIA

LOS ANGELES

SCHOOL OF LAW



REGEDENTS

cts, 1862 to 1890.



— Memoranda and Articles
. — Resolutions. — Notices. — ■
ature Stock. — Banking and
Judgments and Orders. —
ial Acts.

ing Acts and Rules.



iLMER,

aw.

Assisted by the Uox. (JiiAKLi±:S MACJM AtiHTElSr, Q.C, vfLh<coln?s Inn, and
AETHUE JOHN CHITTY, of Lincoln's Inn, Esq., Barrister -at- Law.

OPINIONS OF THE PRESS ON PREVIOUS EDITIONS.

"These two volumes â– will form tlie standard authority on the particular aspect of Company Law

with which they deal It is not often that the draftsman finds that Palmer's Forms do not

contain what he requires, whilst tlie Notes are admitted on. all liands to contain amine of information
on the details of Company Law." — Lmo Journal.

" The new edition of Mr. Palmer's -work is a distinct improvement even upon its excellent and
unrivalled predcccssoi-s, and we can confidently ret^ommend it to tlie Profession and to all others
interested in Company Law." — Lnw Times.

" This edition of the indispensable ' Palmer ' bears many traces of the care which has been bestowed
upon it both in tlie way of re-arrangement of tlie introduction of New Forms and other fresh matter.
Company drafting Ls the last development of Conveyancing, and Mr. Palmer, who has had so large a
share in its development, spares no pains to make the results suggested by recent experience accessible

to the Pnjfession Mr. I'ahiier's work is of the highest utility as a book of Precedents, and it is

interesting also by reason of liis discussion of important ijuestions in ( 'ompany Law." — Sn/iillor.s' Jour.

" The sixtli edition of this work is one more e\idence of the high appreciation in wliicli this classic
of the rompunies Acts is held."— /VHOHci'n/ AVi4'».

" Tlii.i invaluable work." — Fiiniiicml Times.

" To fstiinaU' the value of Mr. Palmer's l)ook, we have only to picture to ourselves what would be
tlie e^jndifioii of Company jirornoters, directors, vendors, syndicates and other such persons without it.
.... The viilue of the book is too well rccD^iiized both in the Profession and out of it to need any

recommiiidution It would bi; ditlicult to name any law book which has been more successful —

and dewrvi'dly successful— than these Compiiiiy Precedents of Mr. Palmer. The flowing tide of
cimpiiny entcrjirize (loateil him into popularity, mid Mr. Palmer knew how to take advantage of it.
It iit by the cure wliich he has bestowed ii|)(m every edition, and by his ready adaptation of his forms
to the growing wants of the nomtiu'rcial world— not by any mere good luck— that he has maintained
and inaintairiM his prestige an a coiiipiuiy lawyer." — 77if I^nw Qimrt' rl;/.

" We can eontldently recomnii-nd Mr. Palmer's book to the large class whom it

"The value of tluH work is world-wide." — I'lmlii/ Fnir.

" Not only driiflMiHii, but seiTetmieM, managing diieclois, and otlur otiicial
volume vurieU prwedenls and forms whicli (uinnot fail to bo of the (jrealest servii
Ungatine.



crns." — Timrs.



will Mud ill this
lo lliciii." — /jaw



STEVENS & SONS. Limited, 119 &l 120, Chancery Lane, L ondon, W.C. ^«^

( 1 )



,^xifc«c^^^S&-».<



Seventh Edition. Roy. 8vo. 7897. Price 32s, cloth.

PALIVIER'S COMPANY PRECEDENTS



FOE USE IN RELATION TO



Companies subject to the Companies Acts, 1862 to 1890.

Part II.
WINDING-UP FORMS AND PRACTICE,

ARRANGED AS FOLLOWS :—
COMPULSORY WINDING-UP. WINDING-UP UNDER SUPERVISION.

VOLUNTARY WINDING-UP. ARRANGEMENTS AND COMPROMISES.

With a Chapter on Debentures, and Copious Notes,

AND AN

APPENDIX CONTAINING ACTS AND RULES.

^fbruth €bitr0iT.

By FRANCIS BEAUFORT PALMER,

Ofthclniirr Tniiplc, E>iq., Barrintcr-iit-Lnc,
Assisted BY FRANK EVANS, of Lincoln'' s Inn, Esq., liarrlntcr-at-Lmr.



OPINIONS OF THE FEESS.

" It is quite a pleasure to pass from the eong'lomeration of cases, so often loosely strung tog-ether
and called a book on legal topic, to such a work as this .... Mr. Palmer reads liis authorities, thinks

them over, bring-s a ripe exjierience to bear upon his work, and masters his subject The result

is a book of sterling worth Mr. Palmer's ' Company Precedents' is the book par excellence for

practitioners. It is certain to be used alike by the Company draughtsmen, and by the habitue of the

Coui-t There is nothing we can think of which should be within the covers which we do not

find. It is needless to recommend Mr. Palmer's book to the profession, for it is already known and
appreciated. We advise those who ha\'e any doubts to consult it, and they will be in agreement with
us." — Law Journal.

" We had occasion recently, on the publication of the first volume of tliis edition, to state our
opinion of the services which Mr. Palmer had rendered to the profession by the careful and thorough
manner in which he had undertaken the task of revision. The present volume calls for similar

acknowledgment The book will continue to be a safe and necessarj- guide in winding-up

practice." — Solicitors' Journal.

" The business of winding-up companies has increased so rapidly, that the author is obliged to
devote to it .a separate volume of about 900 pages, and containing- S44 forms. Not that the work is a
mere collection of forms. It contains also valuable notes and oliservations, so that the practitioner

gets both the forms and the practice together Mr. Palmer's new volume is one of which every

one concerned in the winding-up of companies must have." — Latv 2'imes.

"Not the least of Mr. Palmer's many merits is, that he is eminently practical and to the point.
In his ' Company Precedents,' Part I., his aim is to see how what the commercial world wants can be
done, to put it into legal shape, and render it impregnable against the insidious attacks of the Court.
.... This excellent characteri.-tic of ijracticality is much in evidence in the present edition of

Winding-up Forms It is a striking testimony to the value as well as the variety of the forms,

that when the first edition appeared, about twenty years ago, it contained about fifty forms only ;
to-day it contains considerably over SCO. The sapling has grown into a vigorous tree." — Law
Quarterly Sevieiv.

" It is simply invaluable not only to company lawyers, but to (<\cryone connected with companies."
— Financial Xiws.



STEVENS & SONS, Limited, n9 & 120, Chancery Lane London. W.C.

( 2 )



COMPANY PRECEDENTS



SEVENTH EDITION,
Part I.



,/



JUST PUBLISHED. Royal 8vo. 1898. Cloth, 12s. 6d.

PALMER'S COMPANY LAW

Based on Lectures delivered in the Inner Temple Hall at
the request of the Council of Legal Education.

With an Appendix containing ttie Companies Acts, 1862 to 1893,

and Rules, dec.

By FRANCIS BEAUFORT PALMER,

OF THE IKN^ER TEMPLE, ESQ., BAKEISTER-AT-LAW,

Author of " Company Precedents" &c.



Accounts

Adj ournment

Amendments

Articles of Association or
Regulations

Audit

Bills of Exchange and
Promissory Notes

Borro-wing Powers

Bribes

Calls

Capital

Certificate of Incorpora-
tion

Certificates of Shares

Common Seal, The

Companies Limited by
Guarantee

Contracts

Conveyances

Corporate Existence and
Powers



PRINCIPAL TOPICS.

I Debentures and Deben-
ture Stock
j Directors

Dividends and Profits
\ Floating- Charg-es
I Forfeiture

Illegal Associations
I Leading Cases

Lien on Shares

Life Assurance Com-
I panies Act

Majority— Eights of

Meetings

Membership

Memorandum of Associa-

Minutes L^ion

Name of Company

Negligence

Notices

Poll

Powers of Company



Preference Shares

Private Companies

Promoters

Prospectuses

Proxies

Qualification of Directors

Quorum

Registered Office

Register of Members

Registration under

Part VII. of the Act
Secretary

Special Resolutions
Transfer and Transmis-
sion of Shares
Trustees, Directors how
Underwriting tiar

Unlimited Companies
Votes
Winding-Up



OPINIONS OF THE PRESS.

" The work is a marvel— for cleamcss, fulness and accuracy nothing could be better.
In every page the master-hand is discernible. Nothiug is shirked ; every difficulty is faced
and met." — Law Notes.

"Au}i;hing on Company Law which comes from Mr. Palmer comes with a stamp of
authority upon it." — The Accountant.

" A vc-rj' useful addition to works on Company Law, and of especi*l use to students and
busiuess men who need a clear exposition bj' a master-hand." — Law Jvurind.

" Tlie subject is dealt witli in a clear and comprehensive manner, and in such a way as
to be intelligible not only to la^vyers but to others to whom a knowledge of Company Law
may be essential." — Law SliulvHts' Journal.

" From any bof)k on Company Law to which Mr. Palmer puts his name wo expect much,
and we are not dis!ipi)ointed in his new work. . . . Like Mr. Palmer's other works,
this book has the merit of giving practical suggestions and hints. It will bo of service
not only to lawyers, ])ut to the large number of men of business who must often without
professional as.sistance make important decisions as to companies." — The Times.

" It WiU) aha])py thought which insjiired tlie author to reproduce his lectures in the shape
of this l)ook. 'i'hcn; is no lack <if works on Conipany Law — of big books and little books,
but tlie big books arc voluminous anil the little ones meagre and jejune. The present work
rculiHcs II gol(l<;n mean and su))plics a long-felt want. All the )irincii)al topics of company
are dealt witli in a sulistantial manner, the arrangement and tyi)ograpliy are excellent, and
tlio whr)le of the Statute Law— an indisjjensabh! adjunct — is collected in an appendix.
Perliuj)H wliat jiraclising lawyers and business men will value most is the precious quality
of jmicticality. Mr. I'aliruir s unicjue cxiKiricince as n, eoni]iaiiy di'aftsman enables him to
know exjictiy wliat are the difliculticH, file ])oint8 which ri^ally arise in the formation and
miinfigeniciit f>f ef)iiipani('H, and from this treasury of his experience he has drawn generously
for Uie lK!nefit of his ruadors. The book is, wo fuel sure, predestined to popularity." —
Law Quarlrrhj Reritw.



STEVENS & SONS. Ltd., 119 & 120, Chancery Lane, London.



\




COMPANY PEEOEDENTS



FOR USE IN RELATION TO



COMPANIES



SUBJECT TO THE COMPANIES ACTS, 1862 TO 1890.



PROMOTERS.
PROSPECTUSES.
UNDERWRITINa.
AGREEMENTS.
MEMORANDA & ARTICLES

OF ASSOCIATION.
PRIVATE COMPANIES.
EMPLOYES' BENEFITS.



ARRANGED AS FOLLOWS:—
RESOLUTIONS.
NOTICES.
CERTIFICATES.
POWERS OF ATTORNEY.
DEBENTURES AND DE-

BENTURE STOCK.
BANKING & ADVANCE

SECURITIES.



PETITIONS.
WRITS.
PLEADINGS.
JUDGMENTS AND

ORDERS.
RECONSTRUCTION.
AMALGAMATION.
SPECIAL ACTS.



Myi\ C0^i0us "gait^,



APPENDIX CONTAINING ACTS AND RULES.



SEVENTH EDITION

BY

FRANCIS BEAUFORT PALMER,

Of the Lnner Temple, Esq., Barrister-at-Law,

ASSISTED BY

The Hon. OHAELES MACNAaHTEN, Q.C.,

Of Lincoln'' s Inn,

ARTHUR JOHN CHITTY,

0/ Lincoln's Inn, Esq., Barrister-at-Law.



IN TWO PARTS.
Part I.



LONDON:

STEVENS AND SONS, LIMITED,
119 & 120, CHANCERY LANE,

Sato gublbSjcrji,

1898



BY THE SAME AUTHOR.



Seventeenth Edition. Demyl2nno. 1897. Price 2s. 6d. net, Cloth.

THE

SH.iEEHOLDERS, DIEECTOES, AND VOLUNTAEY

LIQUIDATORS' LEGAL COMPANION.

A Manual of Every-day Law and Practice for Promoters, Shareholders,

Directors, Secretaries, Creditors, Solicitors, and Voluntary Liquidators of

Companies under the Companies Acts, 1862 to 1890, with Appendix of

useful Forms.

" Invaluable to shareholders, directors, secretaries and solicitors of companies— in fact,
to all persona who have any oonnections or dealings with companies." — Financial News.



Thirteenth Edition. Demy 12wio. 1897. Price Is. net.

PEIYATE COMPANIES AND SYNDICATES:

THEIR FORMATION AND ADVANTAGES.

Being a Concise Popular Statement of the Mode of Converting a Business

into a Private Company, and of establishing and working Private Companies

and Syndicates for Miscellaneous Purposes.

" Crammed from end to end with knowledge useful to the parties to whom it is
Hpecially addressed." — Financial Times.



STEVENS AND SONS, LIMITED, 11!» & 120, CHANCERY LANE, LONDON, W.C.



T
1^7



^^






PREFACE TO PAKT 1. OF SEVENTH EDITION.



In submitting the Seventh Edition of this work to the
Profession the Autlior again acknowledges with pride and
satisfaction the many convincing, tokens and assurances he
has received, and from day to day receives, that the work
has been found practically useful to both branches of the
Profession and to business men generally. To make it
such has been his constant effort ; and the fact that many
thousands of comj)anies now show in their constitution,
regulations, contracts and securities, relationship to the
work is a significant token that he has not laboured in
vain.

Since the First Edition of the work was published in
1877 there has been an enormous development in joint
stock enterprise. Then the paid-up capital of companies
under the Acts of 1862 and 1867 was not much in excess
of 300,000,000/., now the paid-up capital of companies
under the Acts of 1862 to 1893 exceeds 1,400,000,000/., to
which may be added, say, 400,000,000/., represented by
debentures and debenture stock, making an aggregate of,
say, 1,800,000,000/. It is obvious, therefore, that the
matters dealt with in the following pages concern the
interests of an important section of the community, and
deserve special attention.

The Author has spared no pains to render the present
Edition an efficient guide to the practitioner, and in
particular to indicate how to utilise the great facilities for



?4e553



vi PREFACE TO PART I. OF SEVENTH EDITION.

meeting business wants which our admirable system of
company law a:ffords when properly understood and
applied. The additional matter amounts to upwards of
200 pages, and includes some notes taken from the Author's
recently published work intituled '' Company Law."

The author trusts that the result of his labours will
merit that kindly consideration which has been so liberally
accorded to former Editions.

The Author's cordial thanks are due to the Hon.
Charles Macnaghten, Q.C, to Mr. Arthur John Chitty,
to Mr. Frank Evans, and to Mr. Robert Morris, all of the
Chancery Bar, for assistance in passing the work through
the press and preliminary thereto, and to many members
of both branches of the profession, as well at home as
abroad, for valuable communications and suggestions. He
only regrets that want of space has prevented him from
adopting not a few of the suggestions so made by Colonial
users of the work.

F. B. P.

5, New Squake, Lincoln's Inn,
May, 1898.



TABLE OF FOEMS.



Chap. I.— PRELIMINARY (pp. 1—53) [contai7is no Forms'].



Chap. II.— PROMOTERS (pp. 54-87).

Form PAGE

1. Promoters' agreement to pay preliminary expenses in conside-

ration of vendors' shares ....... 75

2. Promoters' agreement to pay preliminary expenses in con-

sideration of commissions . . . . . . . . 76

3. Agreement to sell concession to promoter who is to form com-

pany 76

4. Agreement to contribute to preliminary expenses fund . . . 78

5. Syndicate agreement for purchase and re-sale of mines . . 79

6. Agreement for pooling shares, and sale by trustees . . . 82

7. Pooling agreement, each member fixing his minimum price . 85

8. PooHng agreement providing for transfer of shares . . . 87



Chap. III.— PROSPECTUSES (pp. 88—145).

9. Skeleton prospectus . . .' . . . . . . 140

10. Waiver clauses 141

11. Application for shares 142

12. Bankers' receipt 143



Chap. IV.— UNDERWRITING (pp. 146—174).

13. Underwriter's application 158

14. Underwriting letter with signed application and deposit . . 162

15. Underwriting letter where application not to be made till list

closed 163

16. Underwriting contract with the company 165

17. Underwriting of debenture issue 166

18. Undei-writing clauses in memorandum of association . . . 167

19. Agreement by company to indemnify founders . . . .168

20. Agreement by promoter to pay company for underwi'iting

shares in consideration of part of premiums on issue . . . 169

21. Underwriting contract before company formed . . . .170
22,23. Underwiiting debenture stock .... 172,173



Vlll TABLE OF FORMS.

Chap. V.— AGREEMENTS (pp. 175—262).
Form PAGE

24. Agreement to sell business to new company . . . .199

25. Guarantee of profits by vendor 211

26. 27. Vendors' shares deferred 212

28. Option to vendor to subscribe for shares at par . . . . 212

29. Exclusion of objectionable assets 213

30. Vendor may pay promoter-syndicate 213

31. Arbitration 213

32. Guarantee of certain assets . . . . . . . . 214

33. Liberty for vendors to remunerate promoters .... 214

34. Agi-eement with, agent or trustee for intended company . . 215

35. Adoption agreement (indorsed) . . . . . . .216

36. Agreement adopting contract with modifications . . . . 217

37. Agi-eement to sell undertaking under power in memorandum . 218

38. Ratification 220

39. Agreement to sell patents for cash and founders' shares . . 220

40. Agreement to sell foreign mines 223

41. Agreement to sell Australian mining claims ..... 225

42. Option to buy concession ........ 226

43. Agreement to sell ship to single-ship company . . . . 228

44. Agreement as to issue of paid-up shares, pursuant to unfiled

contract ........... 229

45. Agreement to issue paid-up shares in satisfaction of debt due

by company 230

46. Contract to file where non-compliance with sect. 25 of 1867 . 231

47. Agreement between two companies foi* grant of option to pro-

spect and select blocks (Australia) for paid-up shares in new

company .......... 232

48. Agi-eement to fund arrears of dividend on preference shares . 236

49. Funding certificate 238

60— 52. Agreementsby debenture holdersmodifyingtheir rights . 239 — 242

63. Agreement by shareholders for reconstruction, and for distri-

bution of assets not in accordance with existing rights . . 245

64. Agreement by vendor of shares, guaranteeing dividends and

reserving option to re-purchase . . . . . . 246

55. Agreement as to requisition and general meeting . . . 248

56. Requisition for meeting ........ 249

57. Agreement by American bondholders to deposit bonds, with a

view to united action ........ 249

58. Agreement for appointment of a company's manager . . . 253

59. Agroomont for the ajipointment of a company's secretary . . 254

60. Commission on surplus profits 255

61. Commission on profits ........ 255

62. CommiHsion on dividends ........ 255

63. Agioeuient for service 255

64. Agiooinont as to agent examining title and character of mining

property abroad ......... 256

66, 66. Agroemont to employ mining expert abroad . . . 258



TABLE OF FORMS.



IX



Chap. VI.— MEMORANDA OF ASSOCIATION (pp. 263-370).



Form

67.

68.

69.

70.

71.

72.



Memorandum of company limited, by eliares
Memorandum of guarantee company ....

Memorandum of guarantee company under sect. 23 of 1867
Licence of Board of Trade .......

Notice, application for Board of Trade licence
Memorandum of unlimited company ....



PAGE

292
293
291
297
298
300



Object Clauses
Form PAGE

73. To acquii'e a business . 301

74. To acquire undertaking

of another company . 301

75. To acquire and amalga-

mate otber concerns . 301

76. To acquii-e mines . . 301

77. To acquire patents . . 301

78. To acquire concessions . 301

79. To acquii-e and amalga-

mate otber concerns . 301

80. To enter into a contract . 302

Common Forms.

81. To carry on other busi-

nesses .... 302

82. To purchase other busi-

nesses . . . . 302

83. To purchase patents . 303

84. To enter into partnership,

take shares, &c. . . 303

85. To take shares in other

companies . . . 303

86. To make arrangements

with authorities . . 303

87. To benefit employes, &c. 304

88. To promote companies . 304

89. To purchase property, &c. 304

90. To build, &c. . . . 304

91. To construct works . . 305

92. To invest . . .305



(pp. 301—357).
Form PAGE

93. To receive money on de-

posit, lend, and gua-
rantee . . . . 305

94. To borrow and mort-

gage, &c. . . . 305

95. To remunerate . . . 305

96. To accept bills, &c. . 306

97. To act as trustee . . 306

98. To sell undertaking . 306

99. To advertise products of

company

100. To obtain Acts . . .

101. To register abroad

102. To sell, &c. .

103. To act as trustees, &c. .

104. General words . . .

105. Interpretation clause .

Additional Object Clauses.

106. 107. To build on and

improve land

108. Amalgamation . .

109. To divide assets in specie

110. To obtain Act of Incor-

poration

111. To acquire the com-

pany's own shares

112. Interest out of capital .

113. Special, for guarantee

companies .



307
307
308
308
308
308
308



309
309
309

310

310
311

311



[Objects for Specific Companies.— Forms 114—192, pp. 312—357.
See Alphabetical Index at p. 312.]



Capital Clauses.

193. Life governor's share

194. Cumulative preference shares

195. Power to alter .....•••••

196. Non- cumulative preference shares

197. Preference shares, fixed dividend, and to participate pari passu

in sru'plus ......••••

198. Preference shares, fixed dividend, with half surplus profits



360
361
362
362

362

362



X TABLE OF FORMS.

Form PAGE

199. Preference shares 363

200. Another 364

201—203. B. shares carrying special rights . . . 364, 365

204. Management shares ........ 365

205. Ordinary and deferred, fonner taking all profits until 100 p.c.

paid ............ 365

206. Founders' shares 367

207. Special voting power to holders of founders' shares . . . 367

208. Eeserve cajjital 369

209. Statement of capital and shares where company formed to

acqmre mining property in France (stamp duty lessened) . 369



Chap. VII.— AETICLES OF ASSOCIATION (pp. 371—545).



210. Articles of association .......

211. Ai-ticles of association (Table A modified) .

212. Short form based on Table A (one director)

213. Guarantee company (capital not in shares) .

214. Guarantee company (shares of no fixed nominal amount)



381
471
474

474
476



Miscellaneous Clauses in Articles.

215, 216. Powers to acquire business 481

217. Capital in cumulative preference and ordinary shares . . 482

218. Non-cumulative preference shares . . . . . . 482

219. Preference (non-cumulative) and ordinary shares . . . 482

220. " A " and " B " shares, each with fixed dividend. Balance of

profits pro rata. Priority of " A " shares as to capital . . 483

221. Preference shares with further rights 483

222. Guaranteed preference and ordinary shares . . . . 484
223—226. Provisions for appropriation of profits . . . 484,485

227. Special foi-m 485

228. Conversion of preference into ordinary shares .... 485

229. Power to holders of certain shares to convert others into

preference shares ......... 486

230. 231. Conversion of preference and ordinary shares . . 486, 487
232, 233. Management of one company by another company . 488, 489
234, 235. Debenture directors 489, 490

236. Power for trustees of will to appoint permanent director . . 490

237. Alternate or substitute directors 491

238. Assistant directors 491

239. Share of surplus profits to directors 491

240. CominiHsion to directors ........ 491

241. l)iroctors to have poi'contago on profits 492

242. Managers 492

243. Appointment of first manager ....... 492

244. Couimon seal 492

245. C'usfody of socuritios 493

240. A])])oiiitini:iitH of sliips' husbands . . . ... 493

247. I'rovisions for managers and committoo ..... 494

248. ]']xocutivo committoo 496



TABLE OF FORMS. XI

Form PAGE

249. Special provisions as to debontui'os 496

250. Eegvxlations for club 496

251. Eomuneration of promoter ....... 497

252. Members' inventions, &c. — company to have right of pre-

emption .......... 497

253. Ascertaining profits — single accoimt ..... 498

254. Ascertaining profits — separate capital and revenue accounts to

be kept and dividends payable out of latter . . . . 498

255. 256. How profits to be ascertained ..... 499

257. Differences referred to arbitration . . . . . . 500

258. "Winding-up — how surplus assets to be distributed . . . 500