COMPANY LAW.

Auckland Star, Volume LIV, Issue 131, 4 June 1923, Page 6

COMPANY LAW.

ITS GENESIS AXD EVOLUTION Upwards of 150 members of the Wellington Accountants Students' .Society assembled to hear the lecture on "Some Points on Company Law," delivered by Mr. J. S. Barton, S.M., of Wanganni, who is an authority on accountancy, being the author of several works on accountancy which are in daily use. Mr. H. D. Edwards, vice-president, occupied the chair.

Mr. Barton said that all the lax; relating to joint stock companies were not to be found in the Companies Act Joint stock companies registered under the Companies Act were distinct corporations. There was the corporation sole and the corporation aggregate. Companies might be formed by common law. The only stipulation now was that the number be limited. Previously this had been done by Royal charter. Most of the great colonising companies had been incorporated by Royal Charter. The Bank of Australasia, no" , operating in our midst, had been so incorporated. By letters patent was another allied form of incorporation. Then there was the form of incorporation by Act of Parliament. Bailway and tramway companies were usually incorporated xinder Act of Parliament. There was also the method of incorporation known as prescription, which was really the right of long usage. The King and the Archbishop of Canterbury was a corporation sole, as were all t-ie bishops. They could buy and sell property, but could not will it. The idea was contained in the words, "The King is dead, long lire the King."' The Public Tiistee was a corporation sole, and he had exactly the same entity as the hoHer of the office had in 1000. Where they had a corporation they had contractual powers and continuity. The Bank of England had been formed in 1864 t>? a man named Patterson, who conceived the idea that instead of the Crown going round with a bag and a book, tte wealthy people should subscribe over a million sterling. It was to this that they owed the spirit of joint enterprise right up to the South Sea Bubble. AH sorts of -wild schemes were then afloat, and an epidemic of general madness set in. The law at first frowned on these great stock companies. In 1720 "The Bubble Act" was passed, which lasted for a little over one hundred years. Then came the Webb Corporation, "which was formed to give better and cheaper bread for the people of Birmingham. An action was brought against it, but the jury and judge held "that it was not against the interests of His Majesty's liege subjects. The judge held that '"The Bubble Act" was only "designed to protect the unwary inve?cor.

The first Companies Act came in in 1544. The speaker went on to sive instances of litigation in England which clearly laid down that companies incorporated under the Companies Act could only carry out what was set forth in the articles of association, and also that a company could not buy its own share?. These now self evident facts were uot always so clear, and they could sympathise with the early judges who had t> interpret company law.