STATUTORY COMPANIES There is another large class of companies, which for shortness may be called statutory companies, constituted by special Act of Parliament for the purpose of carrying on undertakings of public utility, such as railways, canals, harbours, docks, waterworks, gasworks, bridges, ferries or tramways. The objects of such companies nearly always involve an interference with the rights of private persons, often necessitate the commission of a public nuisance, and require therefore the sanction of the legislature. For this purpose a special Act has to be obtained. A private bill to authorize the undertaking is introduced in Parliament, con sidered in committee, and either passed or rejected. These private bill committees are tribunals acknowledging certain rules of policy, taking evidence from witnesses and hearing arguments from professional advocates. In many of these special Acts, deal ing as they do with a similar subject matter, similar provisions are required, and to avoid repetition and secure uniformity the legislature has passed certain general Acts—codes of law for particular subject matters frequently recurring—which can be incorporated by reference in any special Act with the necessary modifications. Thus the Companies Clauses Acts, 1845 to 1889, supply the general powers and provisions which are commonly inserted in the constitution of such companies, 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 Railways Clauses Acts, 1845 and 1863 (as amended by the Mines [Working Facilities and Support] Act, 1923), the Waterworks Clauses Acts, 1847 and 1863, the Gasworks Clauses Act, and the Electric Lighting (Clauses) Act, 1899, are other codes of law designed for incorporation in special Acts creating corn panies for the construction of railways or the supply of water, gas or electric light.
The provisions of the Companies Clauses Acts as to shares and stock are, with a few exceptions, analogous to those of the Com panies Acts. The capital is divided into shares of a certain number and amount. A share register is kept and certificates are issued to shareholders; power is given to convert paid-up shares into stock; preference shares may be created, but carry dividends only out of the profits of each year; shares and stock may be issued at a discount, but if the old ordinary shares are at a premium, any new shares must be offered first to the old shareholders.
The borrowing powers of these companies, the form of their debenture or debenture stock, and the rights of the holders de pend on the conjoint operation of the companies' own special Act and the Companies Clauses Acts. The provisions of these Acts as to borrowing, being express, exclude any implied power of borrowing. The policy of the legislature is to give proper facilities for borrowing, and at the same time to take care that under takings of public utility which have received legislative sanction shall not be broken up or destroyed, as they would be if the mortgagees or debenture-holders were allowed the ordinary rights of mortgagees for realizing their security by seizure and sale. Hence the legislature has given them only "the fruit of the tree." The debenture or debenture-stock-holders may take the earnings of the company's undertaking by obtaining the appointment of a receiver, but that is all they can do. They cannot sell the under taking or disorganize it by levying execution, so long as the com pany is a going concern; but this protecting principle of public policy will not be a bar to a debenture-holder, in his character of creditor, presenting a petition to wind up the company, if it is no longer able to fulfil its statutory objects. Certain statutory companies may now under the Stat. Companies (Redeemable Stock) Act, 1915, issue redeemable debenture stock, and also redeemable preference stock.
Railway Companies.—These have special legislation which will be found in the Railway Companies Powers Act, 1864, the Railways Construction Facilities Act, 1864, and the Railway Securities Act, 1866, and numerous other acts. The more im portant railways have been amalgamated under the Railways Act, 192I. (See GREAT BRITAIN : Communications.) AUTHORITIES: Sutcliffe on Statutory Companies. Browne & TheoAuthorities: Sutcliffe on Statutory Companies. Browne & Theo- bald on Railways.