"trade." Having thus cleared the ground the act goes on to provide in
what manner a company may be formed under the act. The machinery is
simple, and is described as follows:--

"Any seven or more persons associated for any lawful purpose may, by
subscribing their names to a memorandum of association and otherwise
complying with the requisitions of this act in respect of registration,
form an incorporated company with or without limited liability" (S 6).
It is not necessary that the subscribers should be traders nor will the
fact that six of the subscribers are mere dummies, clerks or nominees of
the seventh affect the validity of the company; so the House of Lords
decided in _Salomon_ v. _Salomon & Co._, 1897, A. C. 22.

Memorandum of Association.

The document to be subscribed--the Memorandum of
Association--corresponds, in the case of companies formed under the
Companies Act 1862, to the charter or deed of settlement in the case of
other companies. The form of it is given in the schedule to the act, and
varies slightly according as the company is limited by shares or
guarantee, or is unlimited. (See the 3rd schedule to the Consolidation
Act 1908, forms A, B, C, D.) It is required to state, in the case of a
company limited by shares, the five following matters:--

1. The name of the proposed company, with the addition of the word
"limited" as the last word in such name.

2. The part of the United Kingdom, whether England, Scotland or Ireland,
in which the registered office of the company is proposed to be situate.

3. The objects for which the proposed company is to be established.

4. A declaration that the liability of the members is limited.

5. The amount of capital with which the company proposes to be
registered, divided into shares of a certain fixed amount.

No subscriber of the memorandum is to take less than one share, and each
subscriber is to write opposite his name the number of shares he takes.

These five matters the legislature has deemed of such intrinsic
importance that it has required them to be set out in the company's
Memorandum of Association. They are the essential conditions of
incorporation, and as such they must not only be stated, but the policy
of the legislature has made them with certain exceptions unalterable.

The most important of these five conditions is the third, and its
importance consists in this, that the objects defined in the memorandum
circumscribe the sphere of