The Bengal Bonded Warehouse Association Act, 1838 was enacted on March 14, 1838. The Act states that the name of those persons included in the 1st Schedule which is added with the enactment shall from the date of formulation of the Act constitute to be the status of a Company for the Warehousing of commodities under the authority of Association created for the Bonded Warehouse in Bengal. The legislation further provides that the Association so created shall have the power to litigate under the name of the Company and consist of a common seal in the status of the head of the Association which is appointed in the specified period. It shall also purchase and sell off properties and shall hold the property in the form of pledge. The Association shall reassign any property or assets as described under the Act.
By virtue of the provisions of the Act, the amount of rupees ten lakhs which is promised for the needs of the Association by those members who are embraced shall be said as the Capital Stock as specified for the activities of the Association. Such amount shall be parted into two thousand shares each with rupees five hundred value and all the persons who are added will be given single share out of the Stock mentioned for the entire five hundred rupees which is given by that person. The Directors of the warehouse association shall include the name, address, shares given to the association, details of the owners etc shall be kept under a record which shall be given serial numbers and the record of the book shall be maintained at the office. The book shall be given for the purpose of scrutiny of the details of the persons at the time of common hours of the commerce. The certificate shall be issued to the shareholders and undersigned by the Directors appointed under the Association. The proprietors with numerous shares shall have the choice to accept the certificate for the entire shares bought by the shareholders. It shall also be at liberty for the shareholder to select a certificate for every share or different certificates as detailed in the enactment.
Furthermore, the shares that are divided from the Capital Stock shall be reassigned by approval made in the certificate for the issued shares by the shareholders who hold those shares. It shall also be dome by an attorney who is empowered by the shareholder. The proviso states that the approval so granted shall indicate the name of the person to whom such shares are reassigned. It further states that the sanction so given shall be effected to reassign the shares at the time of giving sanction shall be undergone registration which shall be maintained as a record for any further scrutiny. Where a membership of a shareholder comes to an end shall thereby cease to be a member of the corporation as well. They shall have the same obligations as that of the original shareholder. The dealings of the association will be administered by the Directors who are stipulated under the Act. The Act provides for the dismissal, termination as well as election of the Directors. When a Director is removed or terminated or the seat of Director becomes vacant, after giving proper notice to the general public, choose a successor in the mode denoted in the enactment. A person shall be eligible to be appointed as the Director only if he permanently resides in the Presidency town of Bengal.
In addition, the Act states provision for conducting immediate general meeting and voting process in the association. The Directors shall have the power to acquire and erect warehouses. They shall also bond commodities and to enter into agreements and shall perform such other functions as stated in the enactment. The Directors shall issue direction the shareholder to pay the balance share amount in periodical intervals. The Act also gives provisions of the closure of the association.