ut it is occasionally used
for the purpose of committing a fraud, as where an insolvent trader
turns himself into a limited company in order to evade bankruptcy; and
it is to an abuse of this kind that the term "one-man company" owes its
opprobrious signification.

_Companies Limited by Guarantee._--The second class of limited companies
are those limited by guarantee, as distinguished from those limited by
shares. In the company limited by guarantee each member agrees, in the
event of a winding-up, to contribute a certain amount to the
assets,--L5, L1 or 10s.--whatever may be the amount of the guarantee.
The peculiarity of this form of company is that the interests of the
members of a guarantee company are not expressed in any terms of nominal
money value like the shares of other companies, a form of constitution
designed, as stated by Lord Thring, the draftsman of the Companies Act
1862, to give a superior elasticity to the company. The property of the
company simply belongs to the company in certain fractional amounts.
This makes it convenient for clubs, syndicates and other associations
which do not require the interest of members to be expressed in terms of
cash.

_Companies not for Gain._--Associations formed to promote commerce, art,
science, religion, charity or any other useful object may, with the
sanction of the Board of Trade, register under the Companies Act 1862,
with limited liability, but without the addition of the word "Limited,"
upon proving to the board that it is the intention of the association to
apply the profits or income of the association in promoting its objects,
and not in payment of dividends to members (C.A. 1867, s. 23). This
licence was made revocable by s. 42 of the Companies Act 1907
(Consolidation Act of 1908, ss. 19, 20). In lieu of the word "Company,"
the association may adopt as part of its name some such title as
chamber, club, college, guild, institute or society. The power given by
this section has proved very useful, and many kinds of associations have
availed themselves of it, such as medical institutes, law societies,
nursing homes, chambers of commerce, clubs, high schools,
archaeological, horticultural and philosophical societies. The guarantee
form (see _supra_) is well adapted for associations of this kind
intended as they usually are to be supported by annual subscriptions. No
such association can hold more than two acres of land without the
licence of the Board of Trad