meeting of the company duly called for considering the same and representing two-thirds of the stock of the company, or unanimously sanctioned in writing by the shareholders of the company.

4. Holders of shares of such preference stock shall be share- Rights of holders within the meaning of this Act, and shall in all respects holders of preference possess the rights and be subject to the liabilities of share- stock. holders within the meaning of this Act; provided, however, that in respect of dividends and in any other respect declared by by-law as authorized herein, they shall, as against the ordinary shareholders, be entitled to the preferences and rights given by such by-law.

to execution

39. The company shall not be bound to see to the execu- Company not tion of any trust, whether express, implied or constructive, bound to see in respect of any share; and the receipt of the shareholder in of trusts. whose name the same stands in the books of the company, shall be a valid and binding discharge to the company for any dividend or money payable in respect of such share, and whether or not notice of such 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.

INCREASE OR REDUCTION OF CAPITAL, &C.

shares.

40. The directors of the company may, at any time, make Subdivision of a by-law subdividing the existing shares into shares of a smaller amount.

41. The directors of the company may, at any time after Increase of ninety per cent of the capital stock of the company has been capital. 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 requisite for the due carrying out of the objects of the company:

that

2. Such by-law shall declare the number of the shares of By-law for the new stock, and may prescribe the manner in which the purpose. same shall be allotted; and in default of its so doing, the control of such allotment shall vest absolutely in the directors.

of capital.

42. The directors of the company may, at any time, make Reduction a by-law for reducing the capital stock of the company to any amount which they consider advisable and sufficient for the due carrying out of the undertaking of the company;

that purpose.

2. Such by-law shall declare the number and value of the By-law for shares of the stock as so reduced, and the allotment thereof, or the manner in which the same shall be made :

Liability to

creditors not

3. The liability of shareholders to persons who were, at the time of the reduction of the capital, creditors of the company, affected. shall remain the same as if the capital had not been reduced. 97

VOL. I-7

43.

Such by-law

by share

holders and

43. No by-law for increasing or reducing the capital stock to be approved of the company, or for subdividing the shares, shall have any force or effect whatsoever, until it is approved by the votes of shareholders representing at least two-thirds in value of all the subscribed stock of the company, at a special general meeting of the company duly called for considering the same, and afterwards confirmed by supplementary letters patent.

confirmed by supplementary letters patent.

Application for supple

mentary

44. At any time, not more than six months after such sanction of such by-law, the directors may apply to the Secreletters patent tary of State, for the issue of supplementary letters patent to confirm the same:

to confirm

by-law.

By-law, etc., to be produced with petition.

Evidence may be taken and

2. The directors shall, with such application, produce a copy of such by-law, under the seal of the company, and signed by the president or vice-president and the secretary, and establish to the satisfaction of the Secretary of State, the due passage and approval of such by-law, and the expediency and bona fide character of the increase or reduction of capital or subdivision of shares, as the case may be, thereby provided for:

3. The Secretary of State shall, for that purpose, take and kept by Secre- keep of record any requisite evidence in writing, by oath or tary of State. affirmation or by solemn declaration, as above mentioned

Granting of supplementary letters patent; -notice ;

effect of such letters patent.

Calling in of moneys unpaid on shares.

Interest on

calls overdue.

45. Upon due proof so made, the Secretary of State may grant such supplementary letters patent; and notice thereof shall be forthwith given by the Secretary of State in the Canada Gazette, in the form E in the first 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 subdivided, 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 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 company originally subscribed.

CALLS.

46. Not less than ten per centum upon the allotted shares of stock of the company shall, by means of one or more calls formally made, be called in and made payable within one year from the incorporation of the company; the residue when and as the letters patent, or the provisions of this Act, or the by-laws of the company direct.

47. A call shall be deemed to have been made at the time when the resolution of the directors authorizing such call was passed; and if a shareholder fails to pay any call due by him, on or before the day appointed for 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 payment to the time of actual payment thereof.

advance on

be allowed.

48. The directors may, if they think fit, receive from any Payment in shareholder willing to advance the same, all or any part of the shares. amounts due on the shares held by such shareholder, beyond the sums then actually called for; and upon the moneys so Interest may paid in advance, or so much thereof as, from time to time, be exceeds the amount of the calls then made upon the shares in respect of which such advance is made, the company may pay interest at such rate, not exceeding eight per cent per annum, as the shareholder who pays such sum in advance and the directors agree upon.

shares for

49. If, after such demand or notice as is prescribed by the Forfeiture of letters patent, or by resolution of the directors, or by the by- non-payment laws of the company, any call made upon any share is not paid of calls. within such time as, by such letters patent or by resolution of the directors or by the by-laws, is limited in that behalf, the directors, in their discretion, by vote to that effect 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 the by-laws of the company Proviso: or otherwise, they prescribe; but, notwithstanding such liability of forfeiture, the holder of such shares at the time of forfeiture continued. shall continue liable to the then creditors of the company for the full amount unpaid on such shares at the time of forfeiture, less any sums which are subsequently received by the company in respect thereof.

holders

of calls by

50. The directors may, if they see fit, instead of declaring Enforcement forfeited any share or shares, enforce payment of all calls, of payment and interest thereon, by action in any court of competent action. jurisdiction; 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, What only stating the number of shares, and is indebted in the sum of need be money to which the calls in arrear amount, in respect of one proved. call or more, upon one share or more, stating the number of calls and the amount of each call, whereby an action has accrued to the company under this Act.

TRANSFER OF SHARES.

alleged and

shares valid

51. No transfer of shares, unless made by sale under exe- Transfer of cution, or under the decree, order or judgment of a court of only after competent jurisdiction, shall be valid for any purpose what- entry. ever, until entry thereof is duly made in the register of transfers, except for the purpose of exhibiting the rights of the parties thereto towards each other, and of rendering the transferee liable, in the meantime, jointly and severally, with the transferrer, to the company and its creditors.

to stock ex

2. This section shall not apply to companies whose stock is Exceptions as listed and dealt with on any recognized stock exchange by change deal

VOL. I-73

99

means ing by scrip.

Liabilities of directors as regards transfers of

shares in certain cases.

How only a director may avoid liability.

Provision when shares are transmit

than by

transfer.

may be

obtained on

means of scrip commonly in use, indorsed in blank, and transferable by delivery, which shall constitute valid transfers; the scrip holder shall not, however, be entitled to vote upon the shares until they are registered in his name in the books of the company.

52. No transfer of shares, whereof the whole amount has not been paid in, shall be made without the consent of the directors; and whenever any transfer of shares not fully paid in has been made with such consent, to a person who is not apparently of sufficient means to fully pay up such shares, the directors shall 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 such transfer, would have been; but if any director present when any such transfer is allowed does forthwith, or if any director then absent does, within twenty-four hours after he becomes 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 place 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 director may thereby, and not otherwise, exonerate himself from such liability.

⚫ 53. Whenever the interest in any shares of the capital stock of the company is transmitted by the death of any shareholder ted otherwise or otherwise, or whenever the ownership of or legal right of possession in any shares changes by any lawful means, 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 Order of court make and file, in one of the superior courts in the province in which the head office of the company is situated, a declaration and petition in writing, addressed to the justices of the court, setting forth the facts and the number of shares previously belonging to the person in whose name such shares stand in the books of the company, and praying for an order or judgment adjudicating and awarding the said shares to the person or persons legally entitled to the same,-by which order or judgment the company shall be guided and held fully harmless and indemnified and released from every other claim to the said shares or arising in respect thereof:

petition.

Notice of petition.

2. Notice of the intention to present such petition shall be given to the person claiming such shares, or to the attorney of such person duly authorized for the purpose, who shall, upon the filing of such petition, 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 before the said superior courts:

Provided always, that the costs and expenses of procuring such Proviso: as order or judgment shall be paid by the person or persons to to costs. whom such shares are declared lawfully to belong; and that such shares shall not be transferred in the books of the company until such costs and expenses are paid,-saving the recourse of such person against any person contesting his right to such shares.

to transfer.

54. No share shall be transferable until all previous calls Restriction as thereon are fully paid in.

by debtor to

55. The directors may decline to register any transfer of As to transfer shares belonging to any shareholder who is indebted to the the company.

company.

personal re

56. Any transfer of the shares of other interest of a deceased Transfer by shareholder, made by his personal représentative, shall, not- presentative. withstanding such personal representativ isot himself a shareholder, be of the same validity as if he had been a shareholder at the time of his execution of the instrument of trans fer.

BORROWING POWERS.

57. If authorized by by-law, sanctioned by a vote of not less than two-thirds in value of the subscribed stock of the company represented at a general meeting duly called for considering the by-law, the directors may from time to time,(a.) borrow money upon the credit of the company; (b.) limit or increase the amount to be borrowed;

Borrowing.

(c.) issue bonds, debentures or other securities of the com- Issue of pany and pledge or sell the same for such sums and at such bonds, etc. prices as may be deemed expedient; but no such bonds, debentures or other securities shall be for a less sum than one hundred dollars each;

(d.) hypothecate, mortgage, or pledge the real or personal Security. property of the company, or both, to secure any such bonds, debentures or other securities and any money borrowed for the purposes of the company.

DIVIDENDS.

58. No dividend shall be declared which will impair the Dividend not capital of the company.

to impair capital.

company may be

59. The directors may deduct from the dividends payable Debts to to any shareholder all such sums of money as are due from him to the company, on account of calls or otherwise.

DIRECTORS.

deducted from dividends.

60. The affairs of the company shall be managed by a Board of board of not more than fifteen and not less than three direc

directors.

tors.

101

61.