N.S. W. to examine company law

Press, Volume CXI, Issue 32660, 16 July 1971, Page 16

N.S. W. to examine company law

(N.Z. Press Association— Copyright)

SYDNEY. July 14

The attorney-general of New South Wales (Mr K. M. McCaw) has announced that he proposed to ask the New South Wales Law Reform Commission to undertake a complete review of the fundamental principles of company law.

He said “the limited liability company is one of the most important legal concepts in our whole social and economic system. It is therefore surprising that the basic system of law applying to companies has hardly changed in the last hundred years.” He said he made the following reference to the Commission, to review the principles of law relating to: (A) The formation of corporations under the Companies Act, 1961. (B) Corporation so formed, and (C) Corporations formed under similar legislation in places outside New South Wales.

He asks the Commission to consider the following matters relating to corporations under the Companies Act, 1961:

(A) The minimum number of members; (B) The liability of members and officers to creditors and others having claims against the corporation; (C) The liability of one of a group of corporations tp creditors and others having claims against others of the group; (D) The rights and liabilities arising where a member of a corporation is also an officer of the corporation; (E) The interests of members of a corporation in the property of a corporation; (F) The classification of corporations under section 14 (2) of the Companies Act, 1961; (G) The distinctions under that act between (1) public companies and • proprietary companies; and (2) exempt and other _ proprietary companies. Mr McCaw said the time had come to ask such questions as: what is the basic nature of a company? What should its powers be? What rights and interests should members and others have in its property? What legal consequences should follow from the setting up of a “one man company?” Is the distinction between public and proprietary companies still useful, and if not, should we adopt some other classification? He said the Law Reform Commission would set out to answer these and many similar questions in a major project probably extended over the next two years. "I look forward to a report which will bring some of the more archaic concepts of our company law into line with commercial reality and thus facilitate the day to day running of corporate enterprises,” he said.