partnership of more than ten persons may be formed for banking purposes, unless it is registered under the Act, or is formed in pursuance of some other Act, or by letters patent. 3. Banking companies existing before the Act of 1862, and intending to register under it with limited liability, must give, thirty days previous, written notice to every customer of the intention so to register. The notice is either to be delivered personally to the individual who deals with the bank, or (in case of a firm) to a member of the firm, or is to be sent by post to the last known address of the individual or firm. The consequence of the omission to give this notice to any customer is that, as regards his account, and as between him and his representatives, or the persons standing in his place, the certificate of registration with limited liability will have no operation. 4. By sec. 44, every limited banking company and every insurance company, and deposit, provident, or benefit society under the Act, is required, before it commences business, and also on the first Monday in February and the first Monday in August in every year, during which it carries on business, to make a statement in the form D. in the first schedule to the Act. The statement is to be put up in a conspicuous place in the registered office, and in every branch office; and if the Company makes default in this, it is liable to a penalty of £5 for every day's default, and so is every director who knowingly allows of such default. Every member or creditor is entitled to a copy of the statement on payment of sixpence. The following is the form of the statement: FORM D. FORM OF STATEMENT REFERRED TO IN PART III OF THIS ACT. The capital of the Company is £ divided into pounds per share have been pounds has been received; on the first day of January If the Company has no capital divided into shares, this portion of the statement must be omitted. Debts owing to sundry persons by the Company: On judgment, £ On notes or bills, £ On simple contracts, £ On estimated liabilities, £ The assets of the Company on that day were: Other securities, £ 5. The 205th section of the Companies' Act, 1862, preserves in force part of sec. 12 of 20 & 21 Vic., cap. 49 (1857), which provides that (notwithstanding the 7 & 8 Vic., cap. 113, passed "to regulate joint stock banks in England," or any other Act) it shall be lawful for any number of persons not exceeding ten to carry on in partnership the business of banking in the same manner as any company of not more than six persons could do before the passing of that Act (1857). Banking partnerships, therefore, of not more than ten, may, since 1857, carry on business in the same way as banking partnerships of not more than six might do so before 1857; except that, not being founded before 1844, they cannot issue notes. This restriction against issuing notes is imposed by the 7 & 8 Geo. IV, cap. 46, on banking co-partnerships of more than six. 6. This statute still remains in force as to companies formed before 6th May, 1844, and not registered under the Joint Stock Companies' Acts, 1856, 1857, and 1858. But, since 1857, a banking co-partnership of not more than ten may lawfully carry on business, and, if of more than ten, it must register under the Act, with or without limited liability, or must be formed in pursuance of some other Act, or by letters patent. As banking partnerships formed before 6th May, 1844, are regulated by the 7 & 8 Geo. 4, c. 46, I will shortly describe its provisions. It enables banking copartnerships of not more than six to carry on the business of bankers in England, sixty-five miles distant from London, provided they have no office in London. Every member is made liable for all bills and notes issued, and for all money owed or borrowed by the partnership if (1) 3 § he was a member at the date of the bills, &c., or of the incurring of the debt; or (2) if he was a member at any time when such bill, &c., or debt was owing or unpaid; or (3) if he was a member when they were due and payable. Thus, a man might not have been a party to the contract, or liable on it at common law, and might not have been a partner when the proceedings were taken to enforce it, but still he was made liable in theory (though there were practical difficulties in the way of enforcing the claim) if he became a member at any intermediate period. This Act did not authorise co-partnerships to issue, within the limits mentioned, any bills payable on demand, nor to draw bills on any partner, agent, &c., so resident, for less than £50, nor to borrow money or take up or issue bills contrary to 39 and 40 Geo. 3, c. 28. Such co-partnerships, before issuing notes, &c., even beyond the sixty-five miles, were required to deliver at the Stamp Office in London an account containing the name of the firm and of the names and residences of every partner, and of every bank or branch bank, and of every "public officer" (that is, the officer in whose name the partnership was enabled to sue and be sued), and of the places where their bills or notes were issued. And the partnerships were required annually to make a similar return showing any changes that had taken place in any of these matters. Certified copies of these returns were to be given by the Commissioners of Inland Revenue, on payment of £10, which copies were to be evidence against the copartnership of the facts stated therein. But, by 3 and 4 Will. 4, c. 98, partnerships even of more than six persons were allowed to carry on the business of banking in London or within sixty-five miles thereof, provided they did not issue anywhere in England bills or notes payable on demand, or at less than six months from date, during the continuance of the privileges of the Bank of England. So that now the only difference between banking co-partnerships within the sixty-five miles, and other co-partnerships beyond that distance, is, that the former may not issue bills, notes, &c., but the latter may, if formed before the 6th of May, 1844. Companies having power to issue their own notes were authorised by statute 7 & 8 Vict., c. 32, to agree with the Governor and Company of the Bank of England for surrendering this right, after which such companies might establish an office in London, and within sixty-five miles thereof, and also, of course, beyond this limit. Those who have availed themselves of this provision may still sue and be sued by their public officer. See statute 27 and 28 Vict., c. 32, which was passed with this object. 7. The 7 and 8 Vict., c. 113 (1844), however, requires that all such co-partnerships as are formed after 6th May, 1844, shall be formed under letters patent to be granted in accordance with the provisions of that Act. All banks formed since the passing of the Act to regulate Joint Stock Banks in England (1844), and the Acts to regulate Joint Stock Banks in Scotland and Ireland (1845), were required to be registered under the 20 & 21 Vict., cap. 49; and if they failed to do so, the following consequences ensued: (1.) The company became incapable of suing either at law or in equity, but not incapable of being made defendants to a suit either at law or equity. (2.) No dividend could be paid to any shareholder in such company. (3.) Each director or manager of the company for each day during which the company is in default, incurred a penalty of five pounds, and such penalty might be recovered by any person, whether a shareholder in the company or not, and be applied by him to his own use. Nevertheless such default did not render the company so being in default illegal, nor subject it to any penalty or disability other than the above. 8. All these companies are now invited to register under the Companies' Act, 1862, in which case the liability of their members will be regulated by sec. 38, which provides that, when a company formed under the Act is wound up, every present and past member shall be liable to contribute an amount sufficient for the payment of its liabilities and the costs of winding up, subject to the following qualifications: (1.) That no past member shall be liable to contribute if he has ceased to be a member for a year before the winding up began. (2.) That no past member shall be liable to contribute in respect of any liability contracted after the time at which he ceased to be a member.* (3.) That no past member shall be liable to contribute unless it appears to the court that existing members are unable to pay the contributions required of them. (4.) That where the company is limited by shares, no member shall be required to contribute more than remains unpaid on the shares in respect of which he is liable as a past or present member.† (5.) That where the company is limited by guarantee, no contribution shall exceed the amount for which the members have undertaken to be liable by the memorandum of association. (6.) That nothing in the Act is to interfere with the force of any words in a policy of insurance by which the liability of the members of the company is to be restricted. (7.) That no dividend or other sum due from the company to a member shall be paid to him until the creditors are satisfied; but he will have credit for it when the amount of his contribution is being reckoned. 9. The Act 7 & 8 Vict., c. 113, required as a condition to a banking co-partnership obtaining a charter under that Act, that the capital should not be less than £100,000, of which one half at least was to be paid up, and the shares were not to be less than £100 each. The 20 & 21 Vict., c. 49 (1857), only required that the shares should be £100 shares, but not that half should be paid up. But the Act of 1862 is silent on the subject. 10. When a joint stock bank advertises in its prospectus any particular plan of banking operations, or any * Which means, where he has sold his shares, until the transferee's name has been entered on the register; i. e. where the company is under table A. (See table A, clause 8, p. 66.) † Which means, on shares which he then holds, or which he held within a year from the commencement of the winding up. |