Books shall be evidence.

Penalty for

untrue

entries, &c.

Forfeiture of

right for not

keeping books.

Company not bound to see to execution of trusts.

Contracts, &c., by the company,

how executed.

Seal not necessary.

Proviso as to bank notes.

their representatives, at the office or chief place of business of the company.

All shareholders, creditors or their representatives may make extracts therefrom. 31 V., c. 24, s. 26.

4685. In any suit or proceeding against the company or against any shareholder, such books shall be primâ facie evidence of all facts purporting to be stated thereby. 31 V., c. 24,

s. 27.

4686. Every director, officer or servant of the company, who knowingly makes or assists in making 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. 31 V., c. 24, s. 28.

4687. Every company neglecting to keep such books so open for inspection, shall forfeit its corporate rights. 31 V., c. 24, s. 29.

§6.-Trusts, Contracts, etc.

4688. The company shall not be bound to see to the execution of any trust, whether express, implied or constructive, in respect of any shares; and the receipt of the shareholder in whose name the same may stand 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 shares, whether or not notice of such trust shall have been given to the company; and the company shall not be bound to see to the application of the money paid upon such receipt. 31 V., c. 24, s. 30.

4689. 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, in general accordance with his powers as such under the bylaws, 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, engagement, 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; nor shall the party so acting as agent, officer or servant of the company, be thereby subjected individually to any liability whatever to any third party therefor.

Provided, always, that nothing in this article shall be construed to authorize the company to issue any note payable to the bearer thereof, or any promissory note intended to be circulated as money, or as the note of a bank. 31 V., c. 24, s. 31.

ized, to buy

4690. No company shall use any of its funds in the pur- No company, chase of stock in any other corporation, unless in so far as such unless authorpurchase may be specially authorized by its charter, and also stock in the C. by the charter of such other corporation. 31 V., c. 24, s. 32. another.

S7-Dividends.

4691. No company shall declare a dividend, the payment Dividend not of which infringes upon or lessens the capital of the company. capital. to infringe No dividend shall be declared or paid, which shall not have Dividend unbeen actually earned by the company.

earned not to

be paid.

2. The annual dividend may, however, be supplemented or Dividend paid entirely out of the reserve fund; but payment of the divi- may be supdend in this way must be publicly announced to the share-plemented holders, at the annual meeting, and duly authorized by a fund. resolution of the company.

reserve

paid out of

In default of such resolution, the directors of the company, Liability if voting for or consenting to such increase, shall be jointly and dividend le severally liable to the creditors of the company for the amount reserve fund, of dividend paid in excess of that actually earned.

without reso

Jution.

3. Should any dividend be so declared or paid, the directors Liability of voting for, or consenting to the payment of such dividend, shall directors for be jointly and severally liable to the creditors of such company these provifor the amounts so paid. 47 V., c. 73, ss. 5, 6 and 8.

breach of

sions.

4692. The directors, who declare and pay any dividend Penalty for when the company is insolvent, or any dividend, the payment ends, when paying diviof which renders the company insolvent, or diminishes the company is capital stock thereof, shall be jointly and severally liable, insolvent. 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, respectively; but if any director, present How any when such dividend is declared, do forthwith, or if any director directors may then absent do within twenty-four hours after he shall have liability. become aware thereof and able so to do, enter on the minutes 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 company, such director may thereby, and not otherwise, exonerate himself from such liability. 31 V., c. 24, s. 37.

$8.-Suits.

avoid such

4693. Any description of action may be instituted between Actions be the company and any shareholder thereof.

tween shareholders and

2. No shareholder, not being himself a party to such suit, shall the company. be incompetent as a witness therein.

Witnesses.

on the com

3. Service of all manner of summons or proceedings what- How service ever upon the company may be made by leaving a copy thereof may be made at the office or chief place of business of the company, with any pany. grown person in charge thereof, or elsewhere with the president or secretary thereof.

Service, if no known president, &c.

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 judge shall order such publication as he or it may deem requisite to be made in the premises, for at least one month, in at least one newspaper. Such publication shall be held to be due service upon the company. 31 V., c. 24, ss. 40 and 41; C. C. P., 63.

SECTION II.

INCORPORATION OF JOINT STOCK COMPANIES.

$1.-Declaratory and Interpretative.

4694. This section may be cited as "the joint stock companies' incorporation act." 31 V., c. 25, s. 57.

4695. The following expressions, in this section and in all letters-patent and supplementary letters-patent issued under the same, 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 incorporating a company for any purpose contemplated by this section;

2. The expression "supplementary letters-patent" means any letters-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. The expression "real estate " or "land" includes all immoveable property of every kind;

6. The expression "shareholder or stockholder," means every subscriber to or holder of stock in the company, and extends to and comprises the personal representatives of the shareholder. 31 V., c. 25, s. 1; 44-45 V., c. 11, s. 5.

§2.-Granting of the Charter.

4696. 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.

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 Legislature, except for the construction and working of railways and the business of insurance.

2. It is not necessary that an order in council be passed for

granting any such charter, but the Lieutenant-Governor may council not grant any charter upon a favorable report from the Attorney required. General. 38 V., c. 39, s. 2; 44-45 V., c. 11,

s. 1.

4697. The applicants for such letters-patent shall pre- Notice in viously give notice of their intention to make such application. cial Gazette. 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 Contents of not be that of any other company, or any name liable to be notice. confounded therewith or otherwise on public grounds objection

able;

2. The object for which the incorporation is sought;

3. The place, within the limits of the Province, selected as its chief place of business;

4. The proposed amount of its capital stock;

5. The number of shares and amount of each share;

6. The name 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. 44-45 V., c. 11, s. 2.

4698. At any time not more than one month after the last Petition for publication of such notice, the applicants may petition the letters-patent. 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, What it shall and must further state the amount of stock taken by each contain. 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 Required half of the total amount of the stock of the company.

amount of subscription.

4. The aggregate so paid in thereon must be at least ten per Required cent. thereof, or five per cent. of the total capital; unless such amount to be total exceed five hundred thousand dollars, in which case the paid. 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 How to be the company or of trustees therefor, and must be standing at paid. such credit, in 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, duly held by trustees therefor, and being fully of the required value over and above all incumbrances thereon.

6. The petition may ask the embodying in the letters- Other propatent of any provision which otherwise under this section visions. might be embodied in any by-law of the company when incorporated. 31 V., c. 25, s. 4; 41 V., c. 22, s. 1.

Preliminary conditions.

Evidence

4699. 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 may be taken. and keep of record any requisite evidence in writing under oath or affirmation, and may administer every requisite oath or affirmation. 31 V., c. 25, s. 5.

Facts to be

4700. The letters-patent shall recite all the material averrecited in let- ments of the notice and petition, as so established. 31 V., c. 25,

ters-patent.

Different

name than

that chosen

s. 6.

4701. The Lieutenant-Governor may, if he deem it expedient, give to the company a name different to that chosen for may be given. it by the applicants, if such name be objectionable, and may prescribe that the objects for which the company is constituted be changed, provided that they be of the same nature as that given in the notice. 44-45 V., c. 11, s. 3.

If name is same as that of any exist

4702. If it happens that the name of a company, constituted as aforesaid, is the same as that of any other existing company, ing 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.

Change of

name.

Notice of issuing letters-patent.

General cor

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. 44-45 V., c. 11, s. 4.

4703. Whenever a company, 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. 44-45 V., c. 11, s. 5.

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 of the letters-patent, the persons therein named and their successors, shall be a body corporate and politic by the name mentioned therein. 31 V., c. 25, s. 7.

$3.-General Powers.

4705. Every company so incorporated may acquire, hold,