Name.

Office.

Objects.

Liability.

Capital.

MODEL ARTICLES OF ASSOCIATION.

DIRECTIONS FOR THE FORMATION OF A COMPANY,

19

To establish a Company with Limited Liability, it is necessary to send a memorandum of association, signed by at least seven persons, and stamped with a 35s. stamp, to the office of the Registrar of Joint Stock Companies, which, for England, is 13, Sergeant's Inn, Fleet Street, London.

The fee to be paid to the Registrar is stated in clause v. above.

This memorandum must be accompanied by articles of association, signed by the subscribers to the memorandum, and stamped with a 35s. stamp, and a further stamp of 10s. for every 1,080 words contained in them after the first; otherwise the Company will be taken to have adopted the articles of association printed at the end of the 20 Vict., c. 47.

The proper form of a memorandum of association is added below, together with a model form of articles of association, containing provisions founded upon those given in the act, but shorter, more complete, and adapted to give the Company a true Co-operative character,

MEMORANDUM OF ASSOCIATION.

(1) The name of the Company is [here insert the_name] Limited.

(2) The Registered office of the Company will be situate in [England, Scotland, or Ireland, as the case may be].

(3) The object for which the Company is established is to carry on the business of [here insert the description of the business] for the purpose of thereby improving the moral and social position of the persons therein engaged, and to do all such things as are incidental or conducive to the attainment of the above objects.

(4) The liability of the members is limited.

(5) The capital of the Company is [here state the nominal amount divided into [here state the number of] shares of [here state the amount of] each.

We, the several persons whose names and addresses are subscribed, are desirous of being formed into a company in pursuance of this memorandum of association, and we respectively agree to take the number of shares in the capital of the Company set opposite to our respective names.

Transfer.

Indebted mem-
bers.
Closing of
register.

Deceased, bank

and married members.

MODEL ARTICLES OF ASSOCIATION.

ARTICLES OF ASSOCIATION.

PART I.-AS TO SHARES.

Allotment, Registration, Transfer and Transmission of Shares. I. The shares of the Company shall be numbered in regular succession, and shall be allotted by the Committee of Direction hereinafter mentioned, at their discretion, with exception of onefourth part thereof, which shall be reserved for distribution as hereinafter is provided.

II. A Register of members shall be kept in such form as the Committee of Direction from time to time order, wherein all shares allotted and all transfers of shares shall be entered as soon as they are made, and the person or persons in whose name or names any share is entered in the Register for the time being, shall be deemed to be the owner or owners thereof.

III. Shares standing in the names of more than one person shall be entered under the first of such names, but any one of the holders may give effectual receipts for any dividend payable thereon.

IV. Transfers of shares shall be made in the form following, and shall be signed both by the transferor and transferee before they are registered.

I [or we] A. B., of

sum of

in consideration of the paid to me [or us] by C. D., of do hereby transfer to the said C. D. the share

[or shares] numbered
standing in my [or our] name in the books of the

Company (Limited), to hold unto the said C. D. his [her or their] executors, administrators, or assigns, subject to the several conditions on which I [or we] held the same at the time of the execution thereof. And I [or we] the said C. D., do hereby agree to take the said share [or shares] subject to the same conditions. As witness our hands this

day of

V. All transfers shall be left at the office of the Company, and shall be filed as the Committee of Direction order.

VI. The Committee of Direction may decline to register any transfer of shares made by a member indebted to the Company.

VII. The Committee of Direction may order the Register of members to be closed for such periods preceding the general meetings of the Company, as they judge expedient, so that they do not exceed thirty days in any year; upon giving previous notice by advertisement in some newspaper circulating in the district where the office of the Company is situate.*

VIII. The executors, administrators, or assignees of deceased rupt, insolvent, bankrupt or insolvent members, and the husbands of female members, shall be entitled, on their written application, and on producing evidence of their title satisfactory to the Committee of Direction, either to be registered as members in place of such members as aforesaid, or to have their shares transferred to any persons to whom they respectively execute a transfer of their rights.

Certificates of shares.

IX. Every person in whose name any share is entered on the Register shall pay one shilling, or such less sum as any general meeting may fix as registration fee, and shall be entitled to a certificate under the common seal of the Company, stating him or her to be the registered owner or joint owner of such share specified by its number and the amount paid thereon.

*This notice is imperative. See clause xiv., page 12.

Payment on allotment.

Calls.

Interest on calls.

Payment of calls in advance.

Notice of forfeiture.

Consequences of forfeiture.

may be made

MODEL ARTICLES OF ASSOCIATION.

CALLS ON SHARES.

21

X. Every application for an original share shall be accompanied by the deposit of such sum not exceeding one-fourth of the amount payable thereon, as the Committee of Direction require, returnable to the person making application if the application is not granted.

XI. The remainder of the sum due on each share shall be paid by calls to be made by resolutions of the Committee of Direction, of such amount at such times and places, and with such previous notice as shall be fixed at the general meetings of the Company from time to time.

XII. All sums due in respect of any call shall bear interest at the rate of £5 per cent. per annum, from the day named for payment of the call by the resolution making the same to the day of payment.

XIII. Unless any general meeting direct otherwise, the whole or any part of the monies due on any share may be paid in advance, and shall bear interest at the rate of £5 per cent. per annum, on the excess paid for the time being beyond the amount due for calls thereon.

FORFEITURE OF SHARES.

XIV. The Committee of Direction may serve on any member in arrear for any call or calls, a notice-requiring payment of such arrears with all interest and expenses, if any, incurred in consequence of such default, on or before a time named, at the place ordinarily fixed for payment of calls-and stating that in default of such payment, the shares in respect whereof such default is made will be forfeited, and on default of payment according to the requisitions so made, may declare any share as to which such default is made to be forfeited.

XV. All shares so forfeited shall become the property of the Company, and shall be dealt with as unissued shares, but the member in default_shall, notwithstanding such forfeiture, continue liable to the Company for the sum due on such shares at the date thereof.

CONVERSION OF SHARES INTO STOCK.

When conversion XVI. The Committee of Direction may, by a resolution founded upon a previous vote of a general meeting, whereof a copy shall forth with be sent to the Registrar,* convert any paid up shares specified in such resolution into stock.

Effect of conversion.

Regular increase.

XVII. Such stock shall be transferable in the same manner as shares in the capital of the Company, excepting that in the instrument of transfer the amount of stock transferred shall be inserted in place of the number of the shares, and shall entitle the holders to participate in the dividends and profits of the Company rateably according to the amount held by them; and for all purposes of voting, qualification, or conferring any other right in the Company, every sum of stock equal in amount to a share shall be deemed to be a share.

INCREASE OF CAPITAL.

XVIII. Whenever all the shares of the Company, including any acquired by forfeiture, have been allotted, the Committee of Direction may, by a resolution, increase the capital of the Company to such an amount as may be required for the payment of the bonuses to be declared as hereinafter provided, by creating new shares of the same amount respectively as the original This is imperative. See clause xii., page 12.

Ordinary meetings.

Extraordinary meetings.

Notice of meeting, and business thereof.

MODEL ARTICLES OF ASSOCIATION.

shares, or of such other amount as any general meeting shall have previously directed.

XIX. With the previous sanction of a general meeting, the Committee of Direction may, by any resolution thereof, increase the capital of the Company by creating such number of new shares of such amount as is authorised by such meeting, and to be disposed of as it shall direct.

XX. Notice of any such increase of capital shall be sent to the Registrar within 15 days after the resolution declaring the

same.

XXI. All such new shares shall be subject to the same provisions as to payment of calls, numbering, transfer, transmission, and forfeiture, as if they had been part of the original capital.

PART II.-MANAGEMENT.

GENERAL MEETINGS.

XXII. The ordinary general meetings of the Company shall be held as follows:-The first within three months after Registration at such time and place as the Committee of Direction determine, and the subsequent meetings at such time and place as may be fixed at the first meeting to be so held, or at any subsequent meeting, and if no other time or place is so fixed, then on the first Munday in April and October in every year at such place and hour as the Committee of Direction determine.

XXIII. An extraordinary general meeting may be convened by the Committee of Direction at any time, and shall be convened on a requisition in writing left at the registered office of the Company, signed by such number of members as shall be fixed by any ordinary general meeting, and expressing the object of the meeting proposed to be called, and if the Committee does not convene a meeting within twenty-one days after such requisition has been left, the requisitionists may themselves convene such meeting.

XXIV. An extraordinary general meeting shall be convened by a notice to each member given as hereinafter mentioned, not less than seven, nor more than ten clear days before the day of meeting, specifying the place, day, and hour thereof, and the nature of the business to be transacted. And a notice shall be similarly given of the place, day, and hour of every ordinary general meeting, and of any business to be specially brought on there, and no business other than the consideration of the accounts and balance-sheets of the Company since the last meeting, the report of the Committee of Direction, and the declaration of a dividend or bonus, shall be transacted at any ordinary general meeting after the 1st, unless a special notice thereof has been given.*

Receipt of notice. XXV. The non-receipt of such notice by any member shall not invalidate the proceedings of any general meeting.

Quorum at meetings.

Adjournment of meetings where no quorum.

XXVI. No business other than the declaration of a dividend or bonus, shall be transacted at any meeting except the first ordinary general meeting, unless there are present at the commencement of the business such quorum as shall be fixed by the resolution of the said first meeting.

XXVII. If within one hour after the time fixed for a general meeting a quorum is not present, the meeting, if convened on the requisition of the members, shall be dissolved, but in

* The mode of making any alterations in the Articles of Association is prescribed by the law. See clause xxiii. Therefore no provision relating to it is necessary in the articles.

Chairman.

Adjournment by chairman.

Mode of voting.

Votes of incom

MODEL ARTICLES OF ASSOCIATION.

23

any other case shall stand adjourned to the same place, day, and hour in the next week, and so on, provided that if a quorum is not present at the fourth adjournment, the meeting shall stand adjourned sine die.

XXVIII. The members present at any general meeting shall appoint a Chairman, unless any general meeting shall appoint a Chairman of the Company, in which case he shall take the chair at all general meetings during his office, if present when the business begins.

XXIX. The Chairman, with the consent of the meeting, may adjourn the same from time to time, and from place to place, but no business shall be transacted at any adjourned meeting which could not have been transacted at the original meeting.

XXX. The resolutions proposed at any general meeting shall be decided by show of hands, to be declared by the Chairman, unless five members demand a poll; and in case of an equality of votes on the show of hands or poll, the Chairman shall have a second casting vote.

XXXI. Idiots, lunatics, or infant members shall be represented, petent members. and may vote, by their committees, or other legal curators or guardians; and Bodies Corporate by such persons as they may appoint as their representatives, by any writing under the Corporate seal; and members jointly entitled to a share, by such one as they direct, and, in default of any other direction, by the one whose name stands first on the register.

Matters to be determined by the first general meeting.

THE FIRST GENERAL MEETING.

XXXII. The first general meeting shall be duly formed by a quorum of seven members, and may determine the matters following:

(1) Under what conditions shares shall be allotted, and members have votes in future, and how many votes a member may have:

(2) Whether, on a poll at a general meeting, the votes shall be taken by ballot, or otherwise, and how: and whether proxies shall be admitted, and under what conditions:

(3) What shall be the number and qualification of the Committee of Direction: and who shall be its first members:

(4) How long the Committee shall continue in office, and whether they shall retire by rotation or otherwise: whether they shall be removable during their tenure of office, and how: whether they shall be re-eligible, and how they shall be chosen in future: and how vacancies shall be filled up:

(5) Whether the Committee shall have any, and what, pay. (6) Whether there shall be any, and what, special officers of the Company other than auditors: and what shall be their functions, qualifications, and remuneration, and how they shall be appointed and removed:

(7) Whether the members shall be liable to any fines, and what: (8) Whether the Committee of Direction may make advances to members on the credit of their shares, and to what extent, and under what circumstances.

It may also determine, without special notice, any matter hereby made determinable by a general meeting, as well as the matters hereby specially made subject to its determination.*

*For these see clauses xxii., xxvi., xlii., xliii., lix., & lxix. Any other matter as to which no provision is made herein may also be determined by this meeting, by means of a special resolution, passed and confirmed as mentioned above. Clause xxiv. of the Statement of the Law.