It may be fairly said that in Canada also the ex press powers granted by charter or letters patent are usually correlated, tho it is in the discretion of the official desig,nated by the various Companies Acts to grant letter patent, to grant a charter for any of the purposes or objects (with certain exceptions) to which the legislative authority of the Parliament of Canada or the particular provincial legislature extends. Ac cordingly the applicants for charter powers must com ply with the prevailing practice of the Department of the Secretary of State for Canada or of the Pro vincial Secretary. The annual reports of the Secre tary of State bear witness to the very wide diversity of powers which certain companies have been author ized to exercise. Thus there is under Canadian prac tice no reason why a company authorized to manu facture sewing machines should not be authorized to manufacture bicycles, automobiles and typewriters. Among the certain exceptions above noted to which the discretion of the Secretary of State does not apply are, for instance, banks and insurance com panies which are incorporated lirs:p-ecial stit-ute.
A cori-iffariy, itimigf-not be forgotten, has only such powers as are expressly conferred upon it, and such incidental powers as may reasonably be inferred from those powers. Incorporators should therefore be most careful to define in their application in con siderable detail the primary objects and purposes for which incorporation is sought, and also such sub sidiary and ancillary powers as are not given by the Companies Act, either in express terms or by reason able implication. The reader will find it of interest to refer, in the Canadian papers, to the "Notices of Incorporation" of companies chartered from time to time by Dominion or provincial authority, and to ob tain an idea of how carefully (and at times how care lessly) the objects are expressed.
As to Canadian companies it may be said further that the Department of the Secretary of State at Ottawa has issued a booklet of instructions and sug gestions for use by intending incorporators. The statement of objects, we are told, should be clear and concise and should not embody powers which are al ready embodied in the act under which the company is to be incorporated. For instance, the right to ac quire land for the purposes of the company, to mort gage assets and to issue debentures is given by the act, and should not and need not be asked for in the application—unless it is intended to vest the bor rowing power permanently in the directors and thus exclude the necessity of having a by-law for this pur pose approved by the shareholders, as required by the act. Where the act contains no express provisions
on the subject, the power sought should not be left to inference or implication, but should be expressly stated in the incorporating instrument.
When the courts come to construe object clauses they lean toward distinguishing (at least under Eng lish and Canadian practice) the primary pr express from the subsidiary objects, the latter being deemed to be limited and controlled by the former. Conse quently a company could not carry on a subsidiary business if it had ceased to carry on the principal business for which it was chartered. This defect may be to some extent overcome by inserting in the objects clauses a clause providing that the company can carry on any one or more of the objects, powers or purposes, without regard to the others; and such a clause cannot, be made too explicit.
6. Incidental powers.—The incidental powers in elude those privileges reasonably necessary to carry out the express and implied powers. For example, suppose a company had express power to conduct a leather business. Incidentally it would have the right to engage in the linnber business, since to sell the lum ber left after the tanning bark had been stripped from trees would be an ordinarily prudent method of mak ing the best of property the company bad to acquire. Unless specifically prohibited by law every company has an implied power to borrow money. It there fore has the incidental power of mortgaging its prop erty to secure the loan.
The various Canadian Companies Acts (there is a Dominion act and a local or provincial act in each province) have provisions which may be generalized by saying that companies incorporated under the par ticular acts are vested with all the powers and priv ileges and immunities, requisite or incidental to the carrying on of their undertakings—that is, over and above those powers specially conferred by the gen eral act or by the special act or letters patent. In a word, without it being necessarily so stated in the general or special act or the letters patent, a com pany may acquire, alienate and possess property, sue and be sued, contract, incur obligations, and bind others in its favor. A company is not like an indi vidual; it is created with certain definite powers ; these, and such powers as may fairly be regarded as incidental or consequential upon those things which the legislature has authorized, it alone may exercise.