THE I,EGAL REGIME OP THE COMMERCIAL SOCIETIES 15 



satisfied with one tenth. It must be proved by an authenticated deed 

 that these conditions have been observed. 



Further: to prevent abuses of frequent occurrence in the formation 

 of societies, above all through the exaggerated value given to con- 

 tributions, in meeting the claims of which the future of the undertaking 

 is sometimes sacrificed, wise precautions have been taken by the f ramers of 

 the Belgian law, in the provision lapng down that the deed of constitution 

 of a society must henceforth contain : 



(i) the specification of all contributions other than those in money, 

 the conditions on which they were made, and the nam.e of the contributor ; 



{2) The transfers of which the real estate contributed was the 

 subject in the five preceding years, and the conditions under which it was 

 transferred ; 



(3) The mortgages on the real estate contributed ; 



(4) The conditions to which the realisation of the rights contributed 

 optionally is subject; 



(5) The reasons for which special advantages are granted to any of 

 the founders, and the amount of these. 



Article 40 bis of the new law provides for further guarantee of the real- 

 ity of the contributions at least in those cases in which securities are 

 given in return. 



This'article says : " Shares (actions) representing contributions not made 

 in money and any security directly or indirectly giving a right over these 

 shares, shall only be negotiable ten days after the publication of the second 

 yearly balance sheet. Until the expiration of this term, they can only 

 be transferred by public deed or private writ, of which notice has been 

 given to the society within a period of a month, under pain of nullity of 

 the transfer. Deeds relating to transfer of these shares shall indicate 

 their nature, date of creation and the conditions laid down for their transfer." 



Up to the present, the promoter of a society, seeking unlawful gains, 

 obtained in exchange for his contributions an extraordinary quantity of se- 

 curities which he hastened to realise, taking advantage of the favourable 

 current, easily produced by astute propaganda in favour of the foundation 

 of the society. Henceforth, the above provision will prevent his negotiating 

 these securities, until after a minimum period of two years, when the 

 financial results of the society have established the real value of the shares. 



The new law, like the pre\dous one, contemplates two modes of forming 

 societies. The first, the most frequent, by means of one or more authentic- 

 ated deeds, to which the members are parties, either personally or by proxy. 

 The parties to these deeds shall be considered founders of the society. 

 The other is the constitution of the society by subscription, preceded by 

 an authenticated public deed, undci the name of prospectus. 



The same formalities and conditions as are required for the found- 

 ation of the societies are also necessary in the case of each increase of cap- 

 ital. The rules therefore can no longer, as was frequently the case, authorize 

 the t>oard of management to increase the capital, but must in this respect 

 follow regulations definitely laid down. 



