Petition to the Préfet of the department.

One-fourth of the capital must be reserved.

anonymes to companies of a large number. In an anonymous. company no partner has an unlimited liability, none can lose more than the sum they have invested. Such company can only be formed by the authority of the State, which will consider whether the capital is proportionate to the extent of the enterprise, and whether the management is placed upon a proper footing. The company must be formed by deed before a notary, and until the authority of the State has been obtained, partners would only bind each other conditionally. The mode of obtaining the authority is as follows. The deed and documents of the company must be enclosed to a petition, addressed to the Préfet of the department. The petition must be signed by all who have signed the deed, and by parties subscribing at least one-fourth of the real capital. The same must be accompanied with an authentic copy of the deed. The deed must state the business which the company will undertake, the name by which it will be carried on, the domicile, duration, and amount of capital, the number of shares issued, and the mode of management. After one-fourth of the capital has been secured, permission may be obtained to commence the business before the whole has been subscribed. The Préfet will send the petition and documents to the Minister of the Interior, with his opinion:-1. As to whether the enterprise is contrary to law, morals, or good faith, or opposed to the interests of commerce; or whether the success is likely to be improbable or inconvenient to the shareholders. 2. As to the character of the subscribers, especially where the subscribers of one-fourth of the capital only are known, and the character of the managers, if they are named. 3. As to the extent of means of the subscribers, and whether they are in a position to pay the amount of their shares. The documents and opinion of the Préfet are examined by the Council of State with a view to enable the Ministers to decide-1. Whether the conditions of the deed are in conformity with the laws and ordinances which secure their execution. 2. Whether the object of the company is lawful. 3. Whether the capital is sufficient. 4. Whether it is well guaranteed. 5. Whether the interests of all the partners are sufficiently secured. 6. Whether the administration offers moral guarantees both to the parties interested and to the public. When the proposed company is for banking, the opinion of the Préfet

Government

directors.

must be given especially as regards public utility. The author- Authority of ity of the Government may be refused if there be proper may be recause, and the Minister may hear any objection which may be fused. offered to the establishment of such companies. The decree and the deed itself must be posted up in the same manner as the documents of other partnerships. The affairs of an anony- Authority of mous company are administered by directors or clerks, sometimes chosen from among the partners; sometimes strangers, after a council, composed of shareholders, is formed to direct and watch over the management, and no one else has a right to mix himself in the affairs. When the deed does not specify the authority of the directors, or managers, their powers are such as a salaried agent possesses. The authority of the manager may be revoked, especially when he is not a partner. The capital of an anonymous company is divided into shares, which may be created to order or to bearer. The shareholders participate in the profits by dividends, which increase or diminish with the profits. The creditors of an anonymous partnership can only sue the managers; but they are not personally responsible except in case of fraud. If the estate has not sufficient to pay its debts, it may be wound up, and declared bankrupt. If the creditors discover that dividends were made when there were no profits, they may institute a criminal suit for the same against the managers, and any one who gave authority to that effect. Neither the managers of anonymous companies, nor the creditors in case of bankruptcy, would have any means of suing the original shareholders for the completion of payment of their shares after they have transferred them, unless they have taken the precaution to receive some security when they issued the shares (a).

companies must be

formed by deed.

Germany.-An anonymous company is a company in which Anonymous all the partners advance a certain amount of capital, without incurring any personal responsibility for its obligations. The capital is divided into shares, and parts of shares. Such companies can only be established with the authority of the State. It must be formed by deed, which must set forth the name and domicile of the company, its object and duration, the amount of capital, and the number of shares, the kind of shares, whether

(a) French Code of Commerce, §§ 29, 30, 42, and 45; Pardessus, Droit Commercial, Vol. iii. p. 136.

Subscribers to shares bound

in favour of persons nominated or of bearer; the principle on which the accounts are to be made up, the mode of appointing the board of directors, the mode of voting, and the form of advertisements. The deed must be registered at the Tribunal of Commerce, and an abstract of it, containing the principal provisions, must be published. The company does not exist till the authority of the State has been obtained. No shareholder can at any time withdraw any part of his investment, and not fixed rate of interest can be secured to the shareholders. Where the whole amount of the share has not been paid up, notice for calls should be advertised at least three times, and the last time at least four weeks before the time fixed for payment. If the shares are in favour of persons nominated, and not to bearer, special circulars should be sent to them instead of resorting to advertisements. If the shares are in favour of bearers they should not be issued till the whole amount has been paid up. Bills or notes are not sufficient. The subscriber is bound unconditionally to pay forty per cent. of the share; he cannot avoid this obligation by transferring the share to a third person, nor can the company exonerate him from it. A subscriber who to pay 40 per is declared to have forfeited his share for delaying to pay his calls, remains still bound to pay forty per cent. of the amount. A shareholder may, by agreement, be exonerated from further payment after he has paid forty per cent. As long as the amount of the share has not been paid in full the shareholder cannot release himself from his responsibility by transferring his share to another, unless the company consent to transfer his liability to that other person. Even in that case the retiring shareholder would remain bound to the company for his arrears, and for all the obligations entered into by the company up to the period of his retirement. In the general management of the company the shareholders have one vote for each share. If a board of inspection has been appointed, such board has the same rights in anonymous partnerships as in commandite partnerships by shares. The company may have a board of management to consist of one or more members, paid or unpaid, shareholders or not. The names of the members of such board must be entered in the registers of trade. The board must sign in the name of the company, and in the form specified by the deed. They cannot exceed the authority given to them as regards the trans

cent.

Power of board of inspection.

anonymous

actions of the company. The members of the board are not personally bound for the debts of the firm. An anonymous Dissolution of company is dissolved by the expiration of the time fixed by the companies. deed; by a resolution of the shareholders duly recorded, by a decision of the board of directors, when the capital has been reduced by half, and by bankruptcy. The dissolution of the company for any reason other than bankruptcy, must be entered in the register of trade. The winding up of the company is to be entrusted to the board of directors, unless other persons are nominated by the shareholders. The property is divided among the shareholders according to their shares, after all the debts have been paid. The books of the company must be kept for ten years. The merging of one company into another can only take place by authority of the State. A general regulation provides that the Government may, in special cases, consent that the advance necessary for the formation of the company may be reduced to twenty-five instead of forty per cent. (a).

Holland. The Royal authority is required for the formation Royal authoof anonymous companies. Such authority is granted where the rity necessary. company is not against good morals and public order, and provided the conditions of the deed are duly fulfilled. The company may also be dissolved by Royal ordinance, if the conditions of the deed are not observed. The Royal authority must be published in full in the official journal, and duly registered. The capital of the company is divided into shares, either personal or in blank. No share in blank can be issued till the whole amount of it has been paid in cash. The deed must provide for the transfer of shares, and for the registration of the transfer. If the company sustains a loss of fifty per cent., the same must be recorded in the register. If the loss amounts to seventy-five to one hundred per cent., the company must be dissolved, and the directors will become personally responsible for cent. the comall obligations contracted after the discovery of such a deficit. dissolved. The Royal authority will only be granted when the original partners represent at least one-fifth of the capital. The company cannot commence till ten per cent. at least of the capital has been paid up. The deed must provide for the mode of voting. Once a year the directors must present to the shareholders a balance sheet of the affairs of the company (b). (b) Dutch Code, $$ 36 to 56.

(a) German Code, §§ 207 to 249.

When the loss

amounts to 75

to 100 per

pany must be

Anonymous companies require the authority of the State.

Portugal. An anonymous company is an association designated by the name of the object it undertakes, and managed by directors, shareholders, or not, salaried or not. Such companies can only be formed by public deed, and such deed must be entered in the Register of Commerce. Till the company has been registered each shareholder is personally responsible for the contracts of the company (a).

Russia. Anonymous companies may be formed with a capital divided in shares. Such companies may be instituted for carrying out any useful invention not exclusively the property of a third person, any enterprise for science, art, trade, navigation, or any industrial operation. No anonymous company can be formed without the special authority of the State. Such authority may be granted either pure and simple or with temporary exemptions, as with freedom of taxes or with concession of monopolies or privileges. The authority of the Government does not in any case imply any guarantee for the success of the company. Anonymous companies are either for railways, aqueducts, or other objects implying scientific or technical knowledge or for general business, such as insurance. The authority with concession of privileges or monopoly can only be granted to companies for the first of these objects. A A patent is company desiring to obtain a privilege for the exclusive use required where of an invention made in Russia, must first receive a patent for exclusive pri vileges are the purpose. The privilege of the patent must be transferred by the patentee to the company, in which case the patentee would reserve to himself no other right than as the head or founder of the company. The duration of the company may be limited or unlimited, but the privilege or concession can only be granted for a limited time, having regard to the nature of the undertaking, the extent of the risk, the amount of the capital, and other considerations. It is understood that the exclusive use of the privilege cannot exceed the duration of the privilege itself, whatever be the duration of the company; that the expiration of the privilege does not imply the dissolution of the company, and that at the expiration of the time the shareholders may agree to renew the company, whilst in no case can the exclusive privilege be either renewed or extended.

sought.

(a) Portuguese Code, §§ 538 to 516.