company registered under the Companies Acts usually has Its capital divided into shares. Thus, if its capital is, say, R100,000, the division may be into 100,000 shares of ..V1 each, a share being held by every member who has subscribed or agreed to subscribe a pound. Such a member, who is called a " shareholder," is at liberty to subscribe as much as he pleases towards the capital of the company, and in respect of every pound of his subscription he possesses a share in the company. This liberty may be restricted, however, in many ways. The regulations of the company, for instance, may exclude a particular class of persons from becoming share holders or may prohibit them from holding more than a certain number of shares ; or the company will generally be entitled to refuse to accept a person as a shareholder, on the ground that he is under some legal incapacity or is not in a position to assume a responsibility in respect of his proposed subscription ; or the demand of the public for shares in a particular company may be so great as to prevent more than a limited number being available. A shareholder receives a certificate as evidence of title to his shares, and this certificate states whether the shares are fully paid or only partly paid, in which latter case the shareholder is liable to the cotnpany in the event of the balance of the subscription they represent, or any part of it, beieg called up.
The right of a shareholder to transfer his shares and the mode in which a transfer may be effected are usually the subject of special regulation by the company's articles. Where, however, there is no such special regulation tile shareholder should look to the provisions of Table A. As a rule, the special reuulations of a company follow those provisions, the substance of which ill now be set out.
In the first place it is provided that when several persons are registered as joint holders of a share, then any one of them can give effectual receipts for any dividend thereon. Every shareholder is entitled, on payment of a fee of not more than one shilling, to a certificate under the common seal of the company, specifying the shares held by him, and the amount paid up thereon. Should the certificate be worn out or lost, it may be renewed, on payment of a fee not exceeding one shilling. Calls.—The directors are entitled, as and when they think fit, to make calls upon the shareholders in respect of money unpaid on their shares. But this power may be limited by express stipulation in the prospectus, and cannot generally be exercised unless twenty-one days' notice is given of each call. If a call is not paid by the appointed day the shareholder may render himself liable to payment of interest thereon at the rate of 5 per cent. The directors may, if they think fit, receive from a willing member all or any part of the moneys due upon the shares he holds beyond the sums actually called for ; and upon the moneys so paid in advance, or upon any sum paid in excess of calls, the company can pay to the shareholder an agreed interest. Tranifer.—The
following is the usual form of transfer of shares 1, A.B., of , in consideration of the sum of pounds paid to me by C.D. of , do hereby transfer to the said C.D. the share [or shares] numbered standing in my name in the books of the Company, to hold unto the said C.D., his executors, administrators, and assigns, subject to the several conditions on which I held the same at the time of the execution hereof, And I, the said C,D., do hereby agree to take the said share [or shares], ombject to the same conditions. As witness our hands and seals the day of Signed, sealed, and delivered A. B.
by, &e.
C. D. 8 [Name and address of witness.] This instrument should be executed by both the transferor and transferee. And as the transferor is considered to remain the holder of the shares until the name of the transferee is entered in the register of the company in respect of the transfer, it is advisable that the transfer be left at the office of the conipany for registration directly it has been executed by both parties. The company have the right to decline to register a transfer of shares made by a shareholder who is indebted to them. The transferor has the same right as the transferee to make an application for registration of a transfer. During the fourteen days immediately preceding the ordinary general meeting of the company the books are closed, and there can be no registra tion of transfers. It frequently happens that the transfer is only concerned ith a certain number of shares which are part of a larger holding by the transferor, and that the latter has only one certificate in respect of his whole holding. It is obvious that under such circumstances the transferor will not hand over his certificate to the transferee. To meet the difficulty of the situation and to place the transferee, until new certificates have been issued, in as nearly as possible the same position as if he had received a share certificate as well as the transfer, a practice has been established whereby the transferee receives a " certified transfer " from the transferor. The transferor takes his certificate and the executed transfer to the com pany, and the latter indorses upon the transfer a certificate to the effect that : " Certificate for — shares has been lodged at the company's office. Date ---. Secretary." A transfer so certified is "good delivery " of the shares according to the rules of the London Stock Exchange. In some cases the transfer is certified by an official of the Stock Exchange.