Companies Clauses Acts 1845, 1863 and 1869 supply the general powers and provisions which are commonly inserted in the constitution of such public company, regulating the distribution of capital, the transfer of shares, payment of calls, borrowing and general meetings. The Lands Clauses Consolidation Act 1845 supplies the machinery for the compulsory taking of land incident to most undertakings of a public character. The Railway Clauses Consolidation Act, the Waterworks Clauses Acts 1847 and 1863, the Gasworks Clauses Act 1847, and the Electric Lighting (Clauses) Act 1899 are other codes of law designed for incorporation in special acts creating companies for the construction of railways or the supply of water, gas or electric light. A distinguishing feature of these companies is that, being sanctioned by the legislature for undertakings of public utility, the policy of the law will not allow them to be broken up or destroyed by creditors. It gives creditors only a charge—by a receiver—on the earnings of the undertaking—the “fruit of the tree.”
3. British Companies Abroad.
The status of British companies trading abroad, so far as Germany, France, Belgium, Greece, Italy and Spain are concerned, is expressly recognized in a series of conventions entered into between those countries and Great Britain. The value of the convention with France has been much impaired by the interpretation put upon the words of it by the court of cassation in La Construction Lim. According to this case the nationality of a company depends not on its place of origin but on where it has its centre of affairs, its principal establishment. The result is that a company registered in Britain under the Companies Acts may be transmuted by a French court into a French company in direct violation of the convention. The convention with Germany, which is in similar terms to that with France, has also been narrowed by judicial construction. The “power of exercising all their rights” given by the convention to British companies has been construed to mean that a British company will be recognized as a corporate body in Germany, but it does not follow from the terms of the convention that any British company may as a matter of course establish a branch and carry on business within the German empire. It must still get permission to trade, permission to hold land. It must register itself in the communal register. It must pay stamp duties.
Foreign companies may found an affiliated company or have a branch establishment in Italy, provided they publish their memorandum and articles and the names of their directors. Where no convention exists the status of an immigrant corporation depends upon international comity, which allows foreign corporations, as it does foreign persons, to sue, to make contracts and hold real estate, in the same way as domestic corporations or citizens; provided the stranger corporation does not offend against the policy of the state in which it seeks to trade.
There is, however, a growing practice now for states to impose by express legislation conditions on foreign corporations coming to do business within their territory. These conditions are mainly directed to securing that the immigrant corporation shall make known its constitution and shall be amenable to the jurisdiction of the courts of the country where it trades. Thus, by the law of Western Australia—to take a typical instance,—a foreign company is not to commence or carry on business until it empowers some person to act as its attorney to sue and be sued and has an office or place of business within the state, to be approved of by the registrar, where all legal proceedings may be served. New Zealand, Manitoba and many other states have adopted similar precautions; and by the Companies Act 1907, s. 35; C.A. 1908, s. 274 foreign companies having a place of business within the United Kingdom are required to file with the registrar of joint stock companies a copy of the company’s charter or memorandum and articles, a list of directors, and the names and addresses of one or more persons authorized to accept service of process. Special conditions of a more stringent nature are often imposed in the case of particular classes of companies of a quasi-public character, such as banking companies, building societies or insurance companies. Regulations of this kind are perfectly legitimate and necessary. They are in truth only an application of the law of vagrancy to corporations, and have their analogy in the restrictions now generally imposed by states on the immigration of aliens.
4. Company Law outside the United Kingdom.
Australia.—Company law in Australia and in New Zealand follows very closely the lines of company legislation in the United Kingdom.
In New South Wales the law is consolidated by Act No. 40 of 1899, amended 1900 and 1906. In Victoria the law is contained in the Acts Nos. 1074 of 1890 and 355 of 1896; in Queensland in a series of Acts—No. 4 of 1863, No. 18 of 1899, No. 10 of 1891, No. 24 of 1892, No. 3 of 1893, No. 19 of 1894 and No. 21 of 1896; in South Australia in No. 56 of 1892, amended by No. 576 of 1893; in Tasmania by Nos. 22 of 1869, 19 of 1895 and 3 of 1896; in Western Australia by No. 8 of 1893, amended 1897 and 1898.
In New Zealand the law was consolidated in 1903.
Canada.—The act governing joint stock companies in Canada is the Companies Act 1902, amended 1904. It empowers the secretary of state by letters patent to grant a charter to any number of persons not less than five for any objects other than railway or telegraph lines, banking or insurance.
Applicants must file an application—analogous to the British memorandum of association—showing certain particulars—the purposes of incorporation, the place of business, the amount of the capital stock, the number of shares and the amount of each, the names and addresses of the applicants, the amount of stock taken by each and the amount and mode of payment. Other provisions may also be embodied. A company cannot commence business until 10% of its authorized capital has been subscribed and paid for. The word “limited” as part of the company’s name is—as in the case of British companies—to be conspicuously exhibited and used in all documents. The directors are not to be less than three or more than fifteen, and must be holders of stock. Directors are jointly and severally liable to the clerks, labourers and servants of the company for six months’ wages. Borrowing powers may be taken by a vote of holders of two-thirds in value of the subscribed stock of the company.
South Africa.—In Cape Colony the law is contained in No. 25 of 1892, amended 1895 and 1906; it follows English law.
In Natal the law is contained in Nos. 10 of 1864, 18 of 1865, 19 of 1893 and 3 of 1896.
In the Orange Free State in Law Ch. 100 and Nos. 2 and 4 of 1892.
For the Transvaal see Nos. 5 of 1874, 6 of 1874, 1 of 1894 and 30 of 1904.
In Rhodesia companies are regulated by the Companies Ordinance 1895—a combination of the Cape Companies Act 1892, and the British Companies Acts 1862–1890.
France.—There are two kinds of limited liability companies in France—the société en commandite and the société anonyme. The société en commandite corresponds in some respects to the British private company or limited partnership, but with this difference, that in the société en commandite the managing partner is under unlimited liability of creditors; the sleeping partner’s liability is limited to the amount of his capital. The French equivalent of the English ordinary joint stock company is the société anonyme. The minimum number of subscribers necessary to form such a company is (as in the case of a British trading company) seven, but, unlike a British company, the société anonyme is not legally constituted unless the whole capital is subscribed and one-fourth of each share paid up. Another precaution unknown to British practice is that assets, not in money, brought into a company are subject to verification of value by a general meeting. The minimum nominal value of shares, where the company’s capital is less than 200,000 fcs., is 25 fcs.; where the capital is more than 200,000 fcs., 100 fcs. The société is governed by articles which appoint the directors, and there is one general meeting held every year. A société
anonyme may, since 1902, issue preference shares. The doctrine