ARTICLE 1. After a concession has been obtained for a railway, canal, or other public work, by virtue of a law, the Government may authorize, by means of royal decrees agreed to in the council of secretaries, the formation and definite constitution of the company which must carry the same into effect.
ART. 2. The domicile of these companies shall be established in a town of the Peninsula or of the adjacent islands.
ART. 3. The companies formed according to the provisions of article 1 may unite to the principal object of their organization that of the fusion of other associations of a like nature, providing always that for this purpose they secure the approval of the Government and comply with the other requisites which it may consider necessary.
ART. 4. The capital of the companies shall be determined with entire subjection to rule 1 of article 46 of the general railway law in its respective statutes, which shall determine the manner in which the stock shall be issued.
ART. 5. The shares shall be payable to bearer as soon as 30 per cent of their face value has been paid; and the first assessment, which in no case can be less than 15 per cent, shall be paid within the thirty days following that on which the by-laws of the combined companies have been approved by the Government. Any stockholder, however, shall have the right to deposit his shares in the treasury of the company, receiving from the same the proper receipt therefore made out in his name.
ART. 6. The provisions of article 283 of the Code of Commerce shall not have any effect against the grantors of these shares payable to the bearer.
ART. 7. Railway, canal companies, or those for other public works may also issue obligations to bearer with a fixed interest and redemption determined within the term of the concession, with a mortgage on the works and proceeds of the railway, canal, or other public work, to whose construction or operation it is destined. The total of all the obligations issued shall never exceed one-half of the ~ capital realized from the shares of the company.
ART. 8. Both the shares to bearer and the obligations issued shall be considered as public securities for purposes of negotiation only.
ART. 9. The directors of said companies shall be named by the respective general meetings of the shareholders. Nevertheless they may designate in their by-laws those who are to compose tie first board of directors, their appointment being subject to the approval of the first general meeting and of the Government. The general meeting of the shareholders shall fix the benefits and emoluments which the founders and directors of the company shall enjoy.
ART. 10. The resolutions with respect to the alienation, transfers, union or fusion referred to in article 3 shall be adopted at a general meeting of the shareholders in which are represented the holders of two-thirds of the capital stock, and in this manner they shall be binding upon all the shareholders. If at the first meeting said two-thirds should not be represented a second meeting shall be called, which, whatever be the number present, may adopt the resolutions mentioned, which shall be binding on all the shareholders.
ART. 11. The companies shall be obliged to present to the Government of Her Majesty, through the civil governor, a detailed balance indicating all its assets and liabilities, which shall be published in the Gaceta, and whenever the Government asks for it, they shall forward through the same channel statements which give full information of its operations, as well as the other notices and details relative to the receipts and expenditures of the company. The Government may also make an examination whenever it considers the same necessary, of the auditing and administration of the companies and verify their assets, naming for this purpose delegates to be paid by the companies themselves, and to whom the respective directors, superintendents, or managers must present whatever books, data, values, and documents may be asked for which exist or should exist in their offices.
ART. 12. The prescriptions of the general railway law of June 3, 1855, remain in force and are applicable to these companies in so far as not conflicting with the provisions of this law and those which may go into effect hereafter with reference to commercial corporations.