The first step towards the formation of a corporate company is to draw up the articles of association, containing the conditions and rules upon which the company’s business is to be conducted.
A memorandum of association, the form of which is given by the above quoted Act of 1862, is then to be executed by the parties and deposited, together with the articles, at the Companies’ Register Office.
Form of the memorandum of association for a company with limited liability:-
1. The name of the company is: The Eastern Steam Navigation Company, Limited.
2. The part of the United Kingdom in which the registered office of the company is proposed to be situated.
3. The objects for which the company is established are: The conveyance of passengers and goods by steam vessels between such places as the company may from time to time determine, and the doing of all such other things as are incidental or conducive to the attainment of the above object.
4. The liability of the members is limited.
5. The capital of the company is Two hundred thousand pounds, divided into one thousand shares of Two hundred pounds each.
We, the several persons whose names and addresses are subscribed, are desirous of being formed into a company, in pursuance of this memorandum of association, and we respectively agree to take the number of shares in the capital of the company set opposite our respective names.
Certificates of incorporation are issued in the following form:-
The peculiar object for which some companies are formed, such as the building of railways, ports or other public works, the protection of British marine interest abroad, etc., renders it necessary for them to be vested with extraordinary powers or privileges, which cannot be conferred by simple registration.
An incorporation by Act of Parliament then takes place, a mode of incorporation which has superseded the incorporation by charter, formerly used in similar cases.
Capital and Shares.-
The capital of a company is divided into shares, each representing a fixed amount; thus the members of the company are called shareholders.
The capital is either nominal or paid-up. The former is represented by the amount of shares originally subscribed, the latter by the sum actually paid in by the shareholders.
Payment of Shares.-
The payment of shares is usually done by fixed proportional installments at stated intervals; extraordinary calls may, however, be made at any time on the unpaid capital, to meet the requirements of the concern.