missible into articles of association, and fully binding, whereby a promoter may be constituted secretary or managing director; and 7322. Reasonable Condition.—It frequently happens that such appointment is only a reasonable and judicious arrangement; and 7323. Unobjectionable.-When a promoter is appointed secretary or manager under articles of association, with a proviso that he is to hold office until removed by a special resolution (7838), it is generally unobjectionable; but,

7324. Unqualified Term.—If articles of association appoint a secretary or manager for a definite term, it cannot be qualified; or, 7325. For Life.-If such an appointment is for life it is perfectly binding; and

7326. Extravagant Salary.-However extravagant a salary may be, if it be stipulated for in articles of association, it must be faithfully paid, unless the claimant consents to forego it; and

7327. Irrevocable.—An unqualified (7324) appointment under articles of association, together with all its consequences, cannot be subsequently revoked by the company under any circumstances; for,

7328. Gross Impropriety.-The only chance of removing an official, contrary to articles of association, is in the unlikely event of his being guilty of unusually outrageous impropriety; in that case, 7329. Removal.-The Court of Chancery is empowered to set aside the appointment; but,

7330. Strong Evidence.-Evidence of the strongest and most unqualified kind, against the fitness of a secretary or managing director, is necessary to induce interference by the Court.

DIRECTORS.

7331. Spontaneous Appointment.-When articles of association are silent about directors (7240), the subscribers to the memorandum of association (7416) are deemed to be the provisional directors, until superseded by others.

SPECIFIC APPOINTMENT.

7332. Various Modes.-The modes of appointing and empowering directors of a company are by no means limited to proceedings resembling those prescribed by the statutory articles; thus,

7333. Perpetual Directors.-A provision in articles of association constituting the subscribers to the memorandum, or their heirs or assigns, perpetual directors is perfectly binding and operative, and cannot be altered without the consent of such directors; and

expressly empower members to vote by proxy (7236), the right of so voting cannot be exercised; but,

7354. Interest of Directors.-As a provision empowering votes to be taken by proxies is calculated to increase enormously the power of directors, and as the originators of companies almost always aspire to be its future directors, they generally take good care that vote by proxy is a part of the articles of association of every company consisting of a numerous body of members; and

7355. Statutory Provision.-Votes by proxy are anticipated and provided for in the statutory articles of association (7239); notwithstanding,

7356. Not Essential.—It is not an essential requisite of articles of association that they should accord the power of voting by proxy. at general meetings of the company; for,

PERSONAL VOTES.

7357. May be Compulsory.-It is quite legal and binding for articles of association to provide that all votes shall be personally given at every meeting connected with the company.

THE BALLOT.

7358. Articles of association may include a provision that votes at general meetings of members shall be taken by ballot there and then; either,

7359. Invariably; or,

7360. On demand of one or more present;

7361. Either before or after a decision by open voting; or, 7362. As a test of opinion previously to a binding decision by open voting; or,

7363. As a confirmation or negative of open voting previously recorded; for,

7364. Reversed Decisions.—Cases are on record where important questions at public meetings have been decided one way by open voting, and afterwards the contrary way by means of a ballot, insisted upon by a dissentient entitled to challenge an application of the ballot test.

POLLING.

7365. Five Members.-The statutory articles prescribed for a company provide (7230-1) that any five members dissatisfied with the vote of a general meeting may demand a poll; and

7366. Definition.—A poll is an appeal to the whole body of shareholders, whether present at the meeting or not; but,

7367. No Obligation.-There is no obligation to admit the principle of polling into articles of association; and

7368. Express Exclusion.-It is quite competent for articles of association to provide that the decision of every public meeting of the company, by votes there and then recorded, shall be final and irrevocable.

QUORUMS.

7369. Small Majoritics.—If there is no provision about quorums in the articles of association of a company, the majority of a meeting (however few in number) have power to transact business, and make resolutions, binding upon the whole company.

7370. Statutory Quorums.-The statutory articles of association provide for the regulation of quorums (7225); but,

7371. Optional. The adoption of statutory quorums is quite optional.

7372. Antagonistic Interests.-In considering the legal quorum authorized to transact business at a meeting of a company, it may be well to note, as in the case of proxies (7354), that the interests of directors and shareholders are rather antagonistic upon the point; for,

7373. Small Quorums.-Conferring powers on small quorums is calculated to enable directors to carry, by accident or contrivance, points which a large meeting would not concede; on the other hand, 7374. Large Quorums.—A provision insisting upon too large a quorum for constituting a meeting of a company may have the effect of needlessly impeding important business, when time is of importance.

7375. Compromise.-Some companies have adopted a plan whereby, if there is not a quorum at an original meeting, it is adjourned, with a notification to every member of the fact and of the time for holding the adjourned meeting, which adjourned meeting (all the members having been duly notified) is empowered to proceed to business, whether there be a quorum present or not.

CALLS.

7376. By Directors.-The statutory articles of association give power to directors to make calls at their sole option and discretion, whenever they shall think fit (7191), which is another instance of a point of antagonism (7272); for,

7377. By Instalments.-The most reasonable mode of providing for calls upon shares is to make a proportion payable by instal

ments at stated intervals, which may be calculated so as to meet the probable requirements of the business; provided that,

7378. By Meetings.-There can be no objection to placing in the hands of general meetings the power to grant calls in addition to those expressly provided by the articles, should any emergency arise; or,

7379. Postponement.-Postpone calls expressly provided by the articles, should an increase of working capital seem needless.

TRANSFER OF SHARES (510).

7380. Personal Character.—As in the case of a private partnership (6686), it may be sometimes desirable to prohibit (6873), or restrain (7010), the transfer of shares in a company, when success manifestly depends upon the personal character of the men in it; and

7381. Objectionable Members.—When the introduction of an objectionable member or members might have ruinous consequences; therefore,

7382. Reasonable Facilities.-Facilities accorded by articles of association for the transfer of shares, may or may not be unreasonable, according to the nature of the business a company may be engaged in; at any rate,

7383. Freedom not Essential.-Free transfer is not an essential condition of shares in joint stock companies; for,

7384. Restraint.-The articles of association may restrain the transfer of shares by any kind of check or precaution that may be devised; and

7385. Prohibition.-The transfer of shares in a company may be absolutely prohibited by the articles with complete effect; and

7386. Death. When the transfer of shares in a company is prohibited, they can only change hands by the death of the holder; notwithstanding,

7387. Rarity of Restraint.-Excessive restraint upon the transfer of shares in a company is rare and almost unknown, though quite possible; and

7388. Hand to Hand.-Shares cannot, in any case, be sold merely from hand to hand; because,

7389. Compulsory Forms.-In order to their effectual transfer the forms prescribed must be gone through (7195-6); for,

7390. Invalid.-Unless a transfer of shares is formal and duly registered (8050), the law will not recognize it as valid.

7367. No Obligation.-There is no obligation to admit the principle of polling into articles of association; and

7368. Express Exclusion.—It is quite competent for articles of association to provide that the decision of every public meeting of the company, by votes there and then recorded, shall be final and irrevocable.

QUORUMS.

7369. Small Majorities.—If there is no provision about quorums in the articles of association of a company, the majority of a meeting (however few in number) have power to transact business, and make resolutions, binding upon the whole company.

7370. Statutory Quorums.-The statutory articles of association provide for the regulation of quorums (7225); but,

7371. Optional.-The adoption of statutory quorums is quite optional.

7372. Antagonistic Interests.-In considering the legal quorum authorized to transact business at a meeting of a company, it may be well to note, as in the case of proxies (7354), that the interests of directors and shareholders are rather antagonistic upon the point; for,

7373. Small Quorums.—Conferring powers on small quorums is calculated to enable directors to carry, by accident or contrivance, points which a large meeting would not concede; on the other hand, 7374. Large Quorums.—A provision insisting upon too large a quorum for constituting a meeting of a company may have the effect of needlessly impeding important business, when time is of importance.

7375. Compromise.-Some companies have adopted a plan whereby, if there is not a quorum at an original meeting, it is adjourned, with a notification to every member of the fact and of the time for holding the adjourned meeting, which adjourned meeting (all the members having been duly notified) is empowered to proceed to business, whether there be a quorum present or not.

CALLS.

7376. By Directors.-The statutory articles of association give power to directors to make calls at their sole option and discretion, whenever they shall think fit (7191), which is another instance of a point of antagonism (7272); for,

7377. By Instalments.-The most reasonable mode of providing for calls upon shares is to make a proportion payable by instal