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Public Company in United Kingdom

History

Debentures

Public companies, i.e. companies incorporated by special act of parliament for carrying on undertakings of public utility, form a class distinct from trading companies. The borrowing powers of these companies, the form of their debenture or debenture stock, and the rights of the debenture-holders or debenture-stockholders, depend on the conjoint operation of the companies’ own special act and the Companies Clauses Acts 1845, 1863 and 1869. The provisions of these acts as to borrowing, being express, exclude any implicit power of borrowing.

The first two of the above acts relate to mortgages and bonds, the last to debenture stock. The policy of the legislature in all these acts is the same, namely, to give the greatest facilities for borrowing, and at the same time to take care that undertakings of public utility which have received legislative sanction shall not be broken up or destroyed, as they would be if the mortgagees or debenture-holders were allowed the ordinary rights of mortgagees for realizing their security by seizure and sale. Hence the legislature has given them only “the fruit of the tree,” as Lord Cairns expressed it.

The debenture-holders or the debenture-stockholders may take the earnings of the company’s undertaking by obtaining the appointment of a receiver, but that is all they can do. They cannot sell the undertaking or disorganize it by levying execution, so long as the company is a going concern; but this protecting principle of public policy will not be a bar to a debenture-holder, in his character of creditor, presenting a petition to wind up the company, if it is no longer able to fulfil its statutory objects. Railway companies have further special legislation, which will be found in the Railway Companies Powers Act 1864, the Railways Construction Facilities Act 1864 and the Railway Securities Act 1866. (1)

Shares and Membership of a Company: The transfer of shares

Interests in shares of public companies

Find under this subsection information about Interests in shares of public companies in relation to Shares and Membership of a Company: The transfer of shares.

Resources

Notes and References

  1. Encyclopedia Britannica (1911)

See Also

Further Reading

E. Manson, Debentures and Debenture Stock (London, 2nd ed., 1908); Simonson, Debentures and Debenture Stock (London, 2nd ed., 1902); Palmer, Company Precedents (Debentures) (3rd ed., London, 1907).

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(2016, 07). Public Company lawi.org.uk Retrieved 03, 2021, from https://lawi.org.uk/public-company/

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Emily Rowling, 'Public Company' (lawi.org.uk 2016) <https://lawi.org.uk/public-company/> accesed 2021 March 2

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Schema Summary

  • Article Name: Public Company
  • Author: Emily Rowling
  • Description: History Debentures Public companies, i.e. companies incorporated by special act of parliament for carrying on undertakings [...]

This entry was last updated: November 4, 2020

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