JOINT-STOCK COMPANY. Joint stock companies are such companies as are unincorporated, and which trade upon a joint stock. All trading associations, however numerous, and although not esta blished by charter or act of parliament, are legal, provided their purposes be legal, and provided they do not attempt to exercise the privileges of a corpora tion, such as the power of making their shares transferable at the will of the holder. The partners in joint-stock com panies are of two classes : one consists of directors, trustees, and others who are actively employed in conducting the con , the other, of a number of persons I who take little or no part in its manage ' meat, and many of whom become share !holders for the sake only of a profitable investment of their money. The general conduct of the trade falls upon the di rectors, while the more particular trans actions are usually managed by paid agents who are not shareholders. The funds and other property of the company are vested in the trustees. The deed of settlement is a covenant made between a few of the shareholders chosen as trustees for that purpose, and the others ; by which each of the latter covenants with the trustees, and each of the trustees covenants with the rest of the sharehold ers, for the due performance of a series of articles which are specifically set forth, and which point out the duties of the trustees, directors, and auditors ; define their powers, and all other necessary matters. In all matters which might have been provided by the deed, but are not, the law of partnership prevails.
The private property, to its full extent, of every member of an unincorporated trading company is liable for the whole debts of the company. The most im portant object to be gained by an act of parliament for a joint-stock company, is by the clause which enables it to sue and be sued through the medium of one of its officers ; without which advantage the dif ficulties attendant upon suits by or against such companies are beyond calculation.
A partnership in the working of a mine is considered by courts of equity as a partnership in a trade, and therefore sub ject to the usual rules as to partnership.
The chief rules of Roman law as to partnership may be collected from Gaius, 148-154; Dig., xvii. tit. 2; Cicero, Pro Publio Quintio.
The constitution and regulation of joint stock companies have been more particu larly defined by several recent statutes.
The act 7 & 8 Vict. c. 110, applies to companies formed subsequent to 1st Nov. 1844, which consist of more than twenty-five members, provided they are not constituted by charter or by act of parliament. The most important feature of the act consists of provisions for sub jecting joint-stock companies to certain regulations while in their provisionary state, and before operations have been commenced. It is required that before any public advertisement of an intended joint-stock company be issued, the pro.
moters are to effect a "provisional re gistration " at an office established for the purpose, which registration must set forth the name and nature of the proposed company, the names, occupations, and places of abode of the promoters and of ficers, the names of subscribers, with vari ous other particulars ; and copies of each prospectus must be deposited before being issued. There is a penalty for issuing advertisements which falsely pretend that any joint-stock project is patronized, directed, or managed by eminent or opulent persons.
When the company is formed a " com plete registration" is to be made, and until this is effected, all their proceed ings are of a provisionary character. The "complete registration" is accom plished by sending in schedules which give full particulars respecting the con stitution of the company. Every share holder must enter into a covenant to pay up instalments ; the deed is to be regis tered ; accounts are to be audited, and balance-sheets made and produced to the shareholders, yearly, and the right of the shareholders to examine the books for a certain time must be granted. The balance-sheet and auditors' reports are also to be annually registered. The act imposes other conditions on joint-stock companies, amongst which are the follow ing: shareholders whose instalments are all paid, have a right to be present at all general meetings, and to take part in the discussions ; to vote on any ques tion, either in person or by proxy, unless the deed of settlement precludes proxies ; and they have a vote in the choice of electors and auditors. Patrons and di rectors must hold shares in the company under a penalty of 20/. A "register of shareholders" is to be kept which must show the number and amount of shares held by each shareholder : each share holder has a right to inspect this register on demand ; and he is entitled to a cer tificate of the number of shares which he holds, and the amount paid thereon, which certificate may be evidence in a court of law. When completely registered, shares may be transferred, but all the instal , ments due must first be paid up, and the transfer must be registered before the holder is entitled to share in the profits or to vote. The act contains a number of other regulations. The registrar of joint-stock companies is required to make an annual report, which is to be presented to parliament. This act does not apply to joint-stock banks, nor to schools or sci entific and literary institutions ; nor to loan or benefit building societies duly enrolled, nor to friendly societies or simi lar institutions, unless they assure to the amount of 2001. on any one life. The act does not extend to companies in Scot land, except they have branch establish ments in England or Ireland.