THE ARCHAEOLOGY OF THE COMPANIES ACTS
| Date | 01 July 1962 |
| Published date | 01 July 1962 |
| DOI | http://doi.org/10.1111/j.1468-2230.1962.tb00685.x |
| Author | RALPH INSTONE |
THE
ARCHAEOLOGY
OF
THE
COMPANIES
ACTS
IT
is
a
commonplace of archaeology that successive strata
will
frequently reveal
the
former existence of several successive cities
on
the same site. The Companies Acts have developed in
a
not
dissimilar manner. Changes in the law have been superimposed
upon, and periodically consolidated with, the previous legislation;
with the result that the patient excavator is able to unearth relics
of
an
earlier culture which are quite different from the later develop-
ments by which they were thought to have been superseded. The
purpose of
this
paper is to draw attention to some of the more sur-
prising anomalies of this character in the Act of
1948
which might
usefully
be
eliminated in the next consolidation.
I
Scction
1
(2)
of the Act of
1948
offers a choice between three modes
of incorporation. A company limited by shares is defined by
subsection
(2)
(a)
as one which has the liability of its members
limited by the memorandum to the amount, if any, unpaid
on
the
shares respectively held by them.
If
it
is not such
a
company, it
must
be
either a company limited by guarantee or one which has
no
limit on the liability of its members,
i.e.,
an unlimited company.
In
view of the terms of subsection
(2)
(a),
one would have expected
that Table
B
in the First Schedule to the Act, which purports (see
section
11
(a)
)
to
constitute the standard form
of
memorandum
for
a company limited by shares (but which can be amended as
the circumstances may require), would comply with this reqiiire-
ment. All it does in this respect
is to contain
a
statement that the liability of the members is
limited, without saying what, if any, limitation they enjoy. This
is
evidently in compliance with section
2
(2)
of the Act, which
requires the memorandum of a company limited by shares to state
that the liability of its members is limited. But section
2
(2)
is
wholly superfluous, for a company limited by shares has already
been
defined
by section
1
(2)
(a)
as one which includes in its
memorandum a much more specific limitation than the bald state-
ment which section
2
(2)
requires. Moreover, mere compliance
with section
2 (2)
will obviously not satisfy the requirements of
section
1
(2)
(a);
with the result that a company which complies
only with section
2
(2)
will not be a company limited by shares.
In
fact it will not have any limit on the liability
of
its members,
since the mere statement that their liability is limited, without
406
In fact it does nothing of the sort.
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