R v Registrar of Joint Stock Companies, ex p More [1931] 2 KB 197

Facts

  • The Companies Act 1929 established procedures for the incorporation and regulation of joint stock companies in the UK, requiring submission of a memorandum and articles of association.
  • The Registrar of Joint Stock Companies was tasked with ensuring that these documents and the proposed company complied with statutory requirements, particularly the legality of the objects clause.
  • In this case, the applicant sought to compel the Registrar to register a company whose objects clause was deemed unlawful by the Registrar.
  • The Registrar refused to register the company based on concerns that the proposed objects were contrary to law.
  • The applicant challenged this refusal, bringing the matter before the court.

Issues

  1. Whether the Registrar of Joint Stock Companies has unfettered discretion to refuse registration of a company based on the content of its objects clause.
  2. Whether the grounds for refusal—specifically, that a company’s objects are allegedly contrary to law—have to be exercised strictly in accordance with statutory limits.
  3. Whether the Registrar’s decision to refuse registration is subject to judicial review and, if so, on what grounds.

Decision

  • The court held that the Registrar’s discretion to refuse registration is not absolute; it is circumscribed by the Companies Act 1929.
  • It was determined that the Registrar must ensure the proposed company’s objects are not unlawful, but this discretion is subject to statutory and legal limits.
  • The court confirmed that the Registrar's refusal to register a company must be reasonable, lawful, and in compliance with statutory provisions.
  • Judicial review is available where the Registrar acts outside their legal authority, misinterprets the law, or exercises discretion irrationally.

Legal Principles

  • The Registrar’s discretion in registering companies is limited by the statutory provisions of the Companies Act 1929.
  • The legality of the objects clause in the memorandum of association is central to the incorporation process; unlawful objects justify refusal.
  • Decisions of the Registrar are subject to judicial review, particularly for actions ultra vires, legal misinterpretation, or irrationality.
  • Proper and lawful drafting of the memorandum of association, especially the objects clause, is essential for valid incorporation.

Conclusion

The judgment clarified that the Registrar of Joint Stock Companies must act within the constraints of the Companies Act 1929, exercising discretion in accordance with statute and subject to judicial oversight. This ensures that company objects are lawful and that the incorporation process is conducted lawfully, with improper refusals open to review by the courts.

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