COMPANIES OF LIMITED LIABILITY.

Nelson Examiner and New Zealand Chronicle, Volume XIV, Issue 57, 13 October 1855, Page 4

COMPANIES OF LIMITED LIABILITY.

[From the Leeds Mercwry, June 2.]

Tbe Government Bill for introducing into our mercantile system the feature of partnerships with limited liability has been brought into tbe House of Commons and printed. Its leading provisions and intended safeguards against abuse are contained in the first clause, which is as follows :—

"Any joint stock company to be formed under tbe Act of the eighth year of her Majesty, chapter one hundred and ten (other than an insurance company), having a capital stock of the nominal amount of not less than twenty thousand pounds, divided into shares of a nominal value not less than twenty-five pounds eacb, may obtain a certificate of complete registration with limited liability upon complying with tbe conditions following, in addition to doing all other matters and things now required in order to obtain a certificate of complete registration, tbat is to say— (l.) The promoters shall state on their returns to the office for provi • sional registration that such company is proposed to be formed with limited liability : (2.) The word 1 limited ' shall be the last word of the name of the company : (3.) The deed of settlement shall contain a statement to tbe effect that the company is formed with limited liability: (4.) The deed of settlement shall be executed by shareholders holding shares to the amount in the aggregate of at least three-fourths of tbe nominal capital of the company, and there shall have been paid up by each of sucb sharehalders, on account of his shares, not less than twenty pounds per centum: (5.) The payment of the above per centage shall be acknowledged in or endorsed on the deed of settlement, and the fact of the same having been bona fide so paid, shall be verified by a declaration of the promoters, or any two of them, made in pursuance of tbe Act made in the sixth year of tbe reign of his late Majesty King William the Fourth, chapter sixty-two : And upon such conditions being complied with, and other matters and things done, the Registrar of Joint Stock Companies shall grant a certificate of complete registration with limited liability to such company." By the second clause it is provided, that existing joint stock companies (except insurance companies) if completely registered under the Bth Victoria, may obtain a certificate of complete registration with limited liability, on application from the directors, authorized by at least three-fourths in number and value of the shareholders present at a general meeting summoned for the purpose, and on complying with all the conditions specified in the Ist clause. Other clauses require the painting or affixing of the name of the company (expressed as above), on the outside of their premises. It is also provided that no increase shall be made in the nominal capital of any company until sucb increase has been registered with the Registrar of Joint Stock Companies : and that no such registration shall be made "unless a deed is produced to the Registrar, executed by shareholders holding shares of the nominal value of not less than £25 to the amount in tbe aggregate of at least three-fourths of the proposed increased capital of the company," and on which shares £20 has been paid up. Pro vision is made to enable companies duly registered to sue and be sued by their officers ; but if there should not be found effects to satisfy any execution levied on their own property, the individual shareholders shall be liable to tbe extent of tbe unpaid portion of their shares. When it is found, on taking a yearly account of the company, that three-fourths of the subscribed capital has been lost, the business is to cease and the concern to be wound up. The provisions of the Acts 8 Victoria c. 110, and 11 Victoria c. 78, are to apply to tbe persons and companies obtaining limited liability.

The conditions imposed as securities against the abuse of limited liability would of course, to soms extent, restrict the possible mischief. What we fear is, that the alteration in the law may stimulate to the formation of numerous companies, by the instrumentality of clever but speculative and reckless projectors, either for prosecuting ordinary business on a large scale, or for new and doubtful enterprises, without such an amount of personal responsibility resting on any individual as to induce proper caution. No doubt, every facility will be offered to the public by professional men, who will take upon themselves all the arrangements, so aa to exempt shareholders from the necessity for that careful examination into the merits, grounds, and prospects of the enterprise, which would be given by a capitalist undertaking it for himself. The risk being so low as £25 for a single share, it is conceivable that a multitude of very small capitalists, such a 8 the humbler class of shopkeepers and tradesmen, and even wo i king men, most of whom are ignorant of the devices of adventurers, might be beguiled into inventing their small savings in some plausible and magnificent project. Tbe money thus raised might then be employed in a dashing style, on tbe plea of "small profits and rapid returns ;" serious injury might be done, by the competition of such poweiful companies, to private persona engaged in the same line of business ; the regular course of trade might be ruin* ously disturbed ; a great show of prosperity might at first be put on, if not actually realized ; share* holders might long be blinded by cooked accounts, fraudulent stock- takings, and masses of accommodation bills; and at length the bubble might burst, to the loss of all the capital invested and the more serious loss of those who had trusted the company. Our experience of the Railway mania, the early Joint Stock Bank mania, and other manias, proves that there is almost boundless facility in getting up companies where the liability to loss is limited. Nothing can exceed the cleverness of projectors, except the credulity of the shareholders. Nor is it necessary to assume dishonesty in a projector : he may be a man of sanguine and speculative turn, or merely reckless, without any deliberate intention to defraud : and yet he may do as much mischief as the veriest knave.

There are some enterprises, and amongst them railways, of such gigantic magnitude that the funds could not be raised to execute them except by companies on the principle of limited liability; but such companies, before they can begin to ope> rate, are obliged to obtain an Act of Parliament, and to undergo tbe severe ordeal of Committees of both bouses, in which tbe merits of their schemes are open to the criticism and opposition of all interested parties. Even these safeguards have not preset ved tbe public from a host of unadvised and mischievous projects. By the proposed Bill, bowever, there would be no such ordeal to test the merits of a joint stock company engaging in trade : the shareholders might be ignorant men, each fully engrossed with his own occupation, and not one of them having such an amount of interest in the company as to induce him to devote much attention to it. Experience would indicate that, in <{ood times, our prosperity might be marred by a flood of projects, eacb one contributing to heighten the fever of speculation, and to blow out a mighty bubble which must ultimately explode and vanish. The existing safe-guard against such joint-stock delusions is, tbat each partner is liable to the amount of his whole property for the debts

of tbe concern. Tbjf liability puts a wholesome check upon speculation; yet 6ven this i« not always effective. What might we expect if tbert wai no such check. In the United States t law of limited Kibijity exists, but weTwlieve it produces therVftrat the evils whictT we anticipate from it here, namely, undue and reckleu speculation, a great disturbance of trade, and maoy gigantic bankruptcies. The opinion of Mr. William Brown, the member for Sooth Lancashire, and the great American inercbant, is very strong againit tbe introduction of sucb a law m this country, tf we ad not mi.ttkt, Mr. Card well, who consented To briDg' forward tbe measure, gave it a very hesitating and doubtful acquiescence. Many of the ChamTws of Commerce and of tbe most experienced of oar tankers and met chants, regard the proposed Bui with alarm. We commend the measure to the careful consideration of the commercial public.

Modern Dress. — This curious and Spartanesque eccentricity of oar era is thus i apokeft of by a late English writer:-— To the present generation, dress ia a mere matter of course. It is a neceuity to be clothed ; but not to a large number of " men/ the nature and description of their "habita" is a matter of sovereign indifference. Theindis. penaoble condition of not being conspicuous onca fulfilled, all the rest may be left to chance or [one'i tailor. Few men in thete dayi. are known or are describable by their costume. Dress ia thegreatest leveller of the age 1 Between the Cabinet Ministers and one of the juniorjclerks in his office, there ia no other difference, than that the latter are, in all probability, sprucer and better brushed than their masters. In the morning we bundle ourselves into our clothes in a sleepy, mechanical manner ; and in the evening we change them with no greater bestowal of serious thought upon the occupation. They who "give their minds " to a waistcoat or a neck-tie are deemed fit subjects for the satirical pencil. It is now, indeed, considered almost a dfsgrace to a man to spend miich time upon the adornment of his person. What it has now be* borne the fashion to call " a swell," is sneered at by i men, and held in no great estimation by women. As long as a man is externally distinguished by anything like a made-up appearance, as long, as there is any trace of art or study, any symptom of consciousness about him, he is altogether in the wrong. Tbe characteristic of modern refinement is ease. In this respect we have gained in on* direction, if we have lost in another. Oar grand* fathers and great grandfathers made themselves up to attract and to fascinate, spent hours at their toilets, and were turned out at last elaborate fine gentlemen, stately and starch. Now-a-days, tbo where-witbal we shall be clothed enters little into our calculations. No man of sense now ever thinks of dressing at a woman. Let him do what he may, he cannot beat in mere costume the unliveried waiters who stand behind his chair at dinner. That in one respect at least dress to the p'reseht generation is considerable, we hare incidentally admitted. But the picturesqueness of our manly costume is gone, and seemingly for ever. In these days a coat is a coat, and a prince of the blood cannot get a better one than bis valet. There are no longer any social gradations in this matter of costume, no longer any room either for display of taste, or prodigality of expenditure. We Wave by degrees fallen into a style of dress indinat'e and so uncostly, that it is attainable by mcd of all chieiet above the very poor. The distinction between gentle and simple poor, is to be looked for in carriage, in mien, in gesture, in a word, what Mr. Turveydrop, senior, calledjgenerally" deportment," and which is as distinctive and unmlstakeable as ia the difference between velvet and Sackcloth. There may, we repeat, be advantages hi all tbii. The costume of the present day is not provocative of foppery or extravagance, it encourages neither a waste of time, nor a waste of money; and so far it fulfils two important conditions. But a question will suggest itself as to whether it might not fulfil these and other important conditions, and jet b* less unpicturesque and unbecoming than it is.

A Microscopic Marvel.— At a convenazione lately held at Apothecaries' Hall, several microscopical inventions and improvements Were exhibited. Perhaps the most singular; if riot the most important object of attraction, was a curious piece of mechanism recently invented and actually constructed by Mr. Peters, the banker, for making microscopic copies of writing. The pencil written with was attached at the bottom of a vertical compound lever, which could be so adjusted that the upper end moved through only one ten-thousandth part of the space moved through by the point of the pencil. The microscopic Copy was scratched on glass with a diamond, and it was so tiiinnte is to require a powerful microscdpe to make it visible. The Lord's Prayer was by this meant written on • space not larger than a pin-hold, yet the writing was very clear 1 Many of the visitors were allowed to write their names, and the accuracy of the instrument was thus tested by the copies it made of the signatures in little. ■ * Pauperism in South Australia.— On the 16th July, says the Register, the number of persons in the colony subsisting on Government rations was 2.653. Of these, 698 are at present maintained on shipboard, under terms of charter party; 698 are able-bodied females in Adelaide and in the country districts; 1,134 are destitute poor; and 123 are sick in the hospital,. lunatic asylum, and elsewhere. Amongst the destitute poor, 357 males and 685 females ate infirm, of whom 971 are receiving out-door relief. The total number of males supported by the Government is 758, and the total number of females 1,895, With the exception of the immigrants on chipboard, only 5 able-bodied male adults are receiving Government relief, and these are in the Destitute Asylum, Little Kindnesses.— That humble current of little kindnesses which, though but a creeping streamlet, yet incessantly flows— although it glides in silent secrecy within the domestic walls, and along the walks of private life, and makes neither appearance nor noise in the world— pours, in the end, a more copious tribute into the store of human comfort and felicity than any sudden snd transient flood of detached bounty, however ample, that may rush into it with a mighty sound.

New Use for Chloroform. — We wer« present at the Patent Office, a few days since, while experiments were made to destroy weevil in wheat by the use of chloroform. In two or three minutes after a few drops of chloroform bad been administered, the insects naturally enough began to exhibit unmistakable symptoms of uneasiness, which proved to be (he certain precursors of a quiet, respectable death. It was the opinion of the experimenter that these destructive insects might be effectually exterminated through the agency of chloroform, and large quantities of fine wheat eared every year. We have no disposition to combat the opinion, but we think- that our present faith might be greatly strengthened if the agency of chloroform could be successfully invoked during moiquito time.— Washington Union, Love, the toothache, smoke, a coogb, and a tight boot, are things which cannot possibly be kept secret very long.

Cause and Effect.— Mra, Hollyhock thinks it " rather que^r" that the falling of a little quicksilver in a glass tube aboolflpfaave made the weather so awfol cold as it did.