person may inspect them on
payment of a fee of one shilling. This has important consequences,
because every person dealing with the company is presumed to be
acquainted with its constitution, and to have read its memorandum and
articles. The articles also, upon registration, bind the company and its
members to the same extent as if each member had subscribed his name and
affixed his seal to them.

The total cost of registering a company with a capital of L1000 is about
L7; L10,000 about L34; L100,000 about L280.

Capital.

The capital which is required to be stated in the memorandum of
association, and which represents the amount which the company is
empowered to issue, is what is known as the nominal capital. This
nominal capital must be distinguished from the subscribed capital.
Subscribed capital is the aggregate amount agreed to be paid by those
who have taken shares in the company. Under the Companies Act 1900,
Companies Act 1908, s. 85, a "minimum subscription" may be fixed by the
articles, and if it is the directors cannot go to allotment on less: if
it is not, then the whole of the capital offered for subscription must
be subscribed. A company may increase its capital, consolidate it,
subdivide it into shares of smaller amount and convert paid-up shares
into stock. It may also, with the sanction of the court, otherwise
reorganize its capital (Companies Act 1907, s. 39; Companies
(Consolidation) Act 1908, s. 45), and for this purpose modify its
Memorandum of Association; but a limited company cannot reduce its
capital either by direct or indirect means without the sanction of the
court. The inviolability of the capital is a condition of
incorporation--the price of the privilege of trading with limited
liability, and by no subterfuge will a company be allowed to evade this
cardinal rule of policy, either by paying dividends out of capital, or
buying its own shares, or returning money to shareholders. But the
prohibition against reduction means that the capital must not be reduced
by the voluntary act of the company, not that a company's capital must
be kept intact. It is embarked in the company's business, and it must
run the risks of such business. If part of it is lost there is no
obligation on the company to replace it and to cease paying dividends
until such lost capital is repaid. The company may in such a case write
off the lost capital and go on trading with the reduced amount. But for
this purpose