The Company at company having now been duly formed, the original owner of the business now being the managing director of the com pany, it is necessary that he should know something of the many regulations imposed by statute for the conduct of the company's business. But notwith standing the very general powers and authority with which he may have been entrusted, there is one official of the company who represents it in the flesh to the outside world—the secretary. In the case of our imaginary company he may be merely the old managing or chief clerk under a more dignified name ; but he may be, and very often is, a public accountant well versed in company procedure who has undertaken the secretarial duties of this com pany. But whoever he may be, the secretary is the official who should be the chief authority amongst the officers of the company, in all questions relating to its formal management and administration. He must know what books must be kept, what meetings of directors and shareholders are required Cy law, the different classes of meeting, the nature of resolutions and their various kinds, what registers are to be kept, and what accounts and documents are required to be filed at Somerset House. Many other things too he must he acquainted with the knowledge of which is a practical know ledge of the constitution and formal working of a company ; particulars of all this will be found in the article on the SECRETARY OF A COM PANY. The directors, too, will find further information relating to their office under the heading of DIRECTORS; whilst the ordinary shareholder, who has bought shares in a company on the strength of a PROSSECTUS, will find the law relating thereto under that title, and under CALLS; CAPITAL ; PROVOTERS ; and SHARES. Other articles that may be consulted are ARTICLES OF ASSOCIATION; BALANCE-SHEET; CONTRIBUTORIES ; CORPORATION DEBENTURES ; DID IDENDS ; MEMORANDUM OF ASSOCIATION ; RECONSTRUCTION ; and WINDING-UP. To understand the Articles of Association appended hereto, they should be read together with TABLE A.
Powers and Liabilities of a Company.—It has already been stated that an incorporated company is in law a person ; and it follows that it should have the same rights and be subject to the same obligations. But as a company is a fictitious and created person, it also follows that under some circumstances its rights and obligations may necessarily be either more limited or extensive than those of a natural person. A corporation, which is the general title that includes a company incorporated under the Acts we have been considering, has from time immemorial been said by the law to have no soul; here is at once a startling difference well recognised by the law, and the logcial inferences to be drawn therefrom might very reasonably make the legal position of a company very different to that which it to-day occupies in the sight of the law. And attempts have at times been strenuously made to force the judicial authorities to adopt a legal attitude consistent with logical inference. In the matter of crime, it has been urged that a company can incur no criminal responsibility, because it has no "mind" to be capable of a guilty intent, which generally speaking is a necessary ingredient in every criminal offence ; and on similar grounds it has been urged that a company cannot be liable for any private wrong, in respect of which the law requires proof of express malice on the part of the wrongdoer as a necessary condi tion before the person wronged can obtain damages.
And yet in face of the first contention, a company may be criminally indicted and fined for a breach of duty imposed by the law ; and in respect of many crimes and offences, either by the common law or by special statutory provision, directors and officers of the company may be called upon to per sonally stand a criminal trial. With regard to the second contention, it is now well settled that a company is liable in damages for malicious prosecu tion and for libel. Generally in respect of torts, it would be liable e.g. for assault and battery, nuisance, fraud, negligence, and trespass. As a con tracting party, a company may enter into agreements as freely as a natural person, subject to two main limitations: (1) Except where the contract is in respect of an everyday and ordinary transaction of its ordinary business, all contracts entered into by a company must have its seal duly affixed thereto ; the seal is the legal signature of a company. (2) Its contracts must be within its powers. These powers are contained in the memorandum of association; but speaking generally, it may be said that a company may enter into any contract which is a necessary incident in the carrying int8 effect of the objects and powers contained in the memorandum, even if the subject o$ the particular contract in questjpn is not referred to therein, A company may act through an agent, and is accordingly liable for and bound by his acts. It may also he bound by acquieicence and conduct, for although it may not have eves of its own wherewith to see, it has agents who should Upon most trading companies the law confers an implied power to borrow money, and to make, accept, indorse, or issue bills of exchange ; but it would always be wise to look at thy, memorandum of association before entering into such a transaction with a company. In fact the reader may be here usefully advised to request to be furnished with a copy thereof before he engages with a company in any business of an important character ; if it will not give him a copy, he may see it at Somerset House, though if the registered office of the company is in Scotland or Ireland, or the company is a mining company conducting its operations in Cornwall or Devon, search should be made at the Companies Registration Offices at Edinburgh, Dublin, or Truro respectively, as the case may be.
Bills of Exchange.—Partienlar care must be taken in the mutter of bills of exchange and cheques. The most important points are that the word " limited" must never be omitted from the termination of the company's name, and that the latter is always correctly stated ; failure in either of these details will entail personal liability upon the directors in respect of the bill, not to mention certain penalties. So, too, the directors or others sign ing the bill must be careful to let it clearly appear that they are signing merely "for " or " on account of" the company, and not stiff as to incur personal liability thereon. Any person duly authorised so to do may sign a bill or cheque on behalf of a company ; sometimes the company affixes its seal. We now append a few examples of bills, a cheque, and a promissory note.