279.

280.

281.

commencement of the winding-up, shall be void to all intents. -(S. 163.)

And by section 153, any disposition of the property, effects, and things, in action of the company, and every transfer of shares, or alteration in the status of the members made between the commencement of the winding up and the Order for windingup, shall, unless the court otherwise orders, be void.

Where Order made for winding-up subject to supervision, the court may in such Order, or subsequent Order, appoint additional liquidators, who shall in all respects stand in the same position as if they had been appointed by the company. The court may also remove any liquidators so appointed, and fill up any vacancy --(S. 150.)

The liquidators appointed to conduct the winding-up under supervision, may, subject to any restrictions imposed by the court, exercise all their powers without its sanction or intervention, as if the company were being wound-up voluntarily; but save as aforesaid, any Order made by the court for a winding-up subject to its supervision, shall for all purposes be deemed to be an Order for winding-up the company by the court; and in the construction of the provisions of the "Act," whereby the court is empowered to direct any matter or thing to be done to or in favour of the official liquidators, the expression, "official liquidators," shall be deemed to mean the liquidators conducting the winding-up, subject to the supervision of the court.-(S. 151.)

282. In case the winding-up Order, subject to supervision, is superseded by an Order for winding-up compulsorily, the court may, by the latter Order, appoint the voluntary liquidators, or any of them, provisionally or permanently, and with or without the addition of any other persons, to be official liquidators.— (S. 152.)

283.

284.

All books and documents of the company, and of the liquidators, shall, as between the contributories, be prima facie evidence of the truth of all matters recorded therein.—(S. 154.) As to the disposal of the same on dissolution of the company, see Cl. 246, the method being the same as if the company were wound up by the court.

Also see Cl. 228, as to inspection of same by creditors or contributories of the company.

As to class of debts that may be proved, &c., see Cl. 210 and 229.

As to power to pay any classes of creditors in full,
Cl. 210.

see

As to undue or fraudulent preference of creditors, see Cl. 231.
As to punishment of delinquent officers, see Cl. 342 to 358.
As to power of liquidators to compromise any call or debt
due to the company, see Cl. 211.

As to power of the court to make rules, see Cl. 197.
And as to unpaid capital of a guarantee company, see Cl.

252.

285.

286.

287.

288.

289.

AS TO WINDING-UP UNREGISTERED COMPANIES.

Although the present work relates more particularly to companies formed and registered under the "Act" we have, for the sake of completeness, deemed it, desirable to state as briefly as possible the conditions under which an unregistered company may be wound up in accordance with its provisions.

By section 199, any unregistered partnership, association, or company, having more than seven members, except railway companies, incorporated by Act of Parliament, may be wound up under the "Act," the winding-up provisions whereof are (subject to the following exceptions and additions) made applicable thereto :—

(1.) An unregistered company shall, for the purpose of determining the jurisdiction of the court, be deemed to be registered in that part of the United Kingdom where its principal place of business is situate (or if more than one principal place of business, in the place where the proceedings have been instituted); and such place of business shall for all the purposes of winding-up be deemed to be the registered office of the company:

(2.) No unregistered company shall be wound up under the Act" voluntarily, or subject to the supervision of the court:

(3.) An unregistered company may be wound up under the following circumstances:—

*These are afterwards to be understood as included in the term "unregistered companies."

290.

(a.) When the same is dissolved, or has
ceased to carry on business, or is
merely continuing such business for
the purpose of winding-up its affairs:
(b.) When it is unable to pay its debts:*
(c.) When the court is of opinion that the
company should be wound up:

DEFINITION OF CONTRIBUTORY.

By section 200, contributory shall include every person who is liable to contribute to the payment of the liabilities of the

*The company shall be deemed unable to pay its debts.-(S. 199.)
(a.) Whenever any creditor of the company in a sum exceeding

£50 then due has left at the company's principal place of
business, or otherwise served the same as the court may
approve or direct, a demand under his hand requiring
payment of the sum so due, and the company has for
three weeks succeeding such service neglected to pay, or
to secure or compound for the same to the satisfaction of
the creditor:

(b.) Whenever any legal proceeding has been instituted against any member of the company for any claim due, and notice thereof in writing has been left at its principal place of business, or by otherwise serving the same, as the court may approve or direct, and the company has not within ten days after such service paid, secured, or compounded for such claim, or procured such legal proceeding to be stayed, or indemnified the defendant (or member so sued), to his reasonable satisfaction:

(c.) Whenever, in England or Ireland, execution or other process, in any proceeding instituted by such creditor against the company or any member thereof, as such or other authorised nominal defendant, is returned wholly or partly unsatisfied:

(d.) Whenever, in the case of an unregistered company_working mines, subject to the Stannaries, a customary decree or order absolute for the sale of the machinery and effects of such mine has been made in a creditor's suit in the Vice-Warden's Court:

(e.) Whenever, in Scotland, the Induciæ of a charge for payment on an extract decree, or an extract registered bond, or an extract registered protest, have expired without payment being made:

(f.) Whenever it is otherwise proved to the satisfaction of the court that the company is unable to pay its debts.

291.

company, or the cost of adjusting the rights of the members among themselves, or of the winding-up; but in the event of the death, bankruptcy, or insolvency of any contributory, or the marriage of a female contributory, the provisions comprised in Cl. 215 to 217 shall also be applicable to the pre

sent case.

EFFECT OF PETITION AND ORDER ON PROCEEDINGS AGAINST
COMPANY.

After presentation of the petition for winding-up, and before making the order the court may, on the application of any creditor, restrain any proceedings against the company or any contributory upon such terms as it thinks fit.-(S. 201.) 292. Also by section 202, no proceedings shall be commenced or continued against any contributory for a debt of the company, after the order is made, except by leave of the court.

293.

294.

POWER FOR LIQUIDATORS TO SUE ON BEHALF OF THE

COMPANY.

By section 203, if any such company has no power to sue and be sued in a common name, or if for any reason it appears expedient, the court may by its order vest any of the company's property, effects, or rights in the official liquidators, upon which the latter may, in their official or other names, and after giving such indemnity as the court directs, bring or defend any legal proceedings necessary for winding-up the company and recovering its property.

PROVISIONS OF THE ACT TO BE CUMULATIVE.

By section 204, the provisions of this part of the "Act" shall be in addition to, and not in restriction of, any of the provisions with respect to winding-up companies by the court, and the court or official liquidator may, in addition, exercise any of the powers, or do any act in the case of unregistered companies, which might be exercised or done in winding-up companies formed under the "Act;" but an unregistered company shall not be deemed to be a company under the Act," except in the event of its being wound up, and then only to the extent provided by this part thereof.

66

295.

296.

297.

PART V.

MISCELLANEOUS MATTERS.

DIRECTORS AND PROMOTERS.

Before a person consents to become a director of a public company, he cannot be too careful in satisfying himself of the accuracy of all the allegations contained in the prospectus proposed to be submitted to the public, for should the latter be framed so as to mislead intending shareholders, he not only compromises his good name, but renders himself liable to actions for recovery of the deposit money. And, moreover, should any false statements be made which show a fraudulent intent to deceive, he will also become criminally amenable to the laws of the land, and all kinds of unpleasant consequences may ensue.

Any promoter (whether a director or not) is liable for all preliminary expenses connected with the getting up of a public company, and unless the payment thereof is expressly provided for in the Articles of Association, the company cannot be called upon after its incorporation to refund the same.

An action tried at Kingston, in April last, before Lord Chief Justice Erle, fully illustrates the liability of a director for preliminary expenses, and a brief report thereof may, therefore, not be out of place.

The action was brought by an advertising firm, against a Mr. Marshall, who was one of the directors of a proposed undertaking, entitled "The Adelaide North Arm Port and Railway Extension Company (Limited)," to recover the sum of £1378 for advertising. It was not attempted to dispute that such sum had been expended by the plaintiffs, but it was urged on behalf of the defendant, that by arrangement all these and other preliminary expenses were to be borne by Mr.