Bill alters meaning of word ‘director’

Press, 26 October 1982, Page 30

Bill alters meaning of word ‘director’

Parliamentary reporter A major change in the definition of a ‘ director" is one of the features of the Companies Amendment Bill, introduced into Parliament by the Minister of Finance. Mr Muldoon. The bill is the first of two bills amending the Companies Act. 1955. It contains those amendments required this year, while a second and bigger bill will be introduced later for study over the Parliamentary recess. A number of the provisions in the bills are based on the recommendations contained in the final report of the Special Committee to Review the Companies Act (the Macarthur Report) of March, 1973. The bill was strongly criticised by the Deputy Leader of the Labour Opposition, Mr D. R. Lange, on the grounds that it was being introduced in haste and had to be passed this session, but was based on the recommendations of a report nearly 10 years old. This showed the extent of the Government's commit-

ment to law reform, he said. But Labour did not oppose its introduction, and it has been referred to Parliament's Statutes Revision Committee for public submissions. Mr Muldoon said it had been necessary for the bill to be passed this year before some of the provisions of the Finance Bill expired. The main provisions of the bill came into force on January 1, 1984, but were being given 12 months introduction, he said. In Clause 2 of the bill, the definition of the term “director” in the 1955 legislation is repealed and a new one substituted. "Director” now’ includes — "any person occupying the position of director, by whatever name it is called; and a person in accordance with whose directions or instructions the persons occupying the position of directors of a company are accustomed to act.” Clause 10 continues the existing requirement for any company to have two "directors" but provides that a body corporate shall not be

capable of being appointed or holding office as a "director” of a company. Clause 11 provides that a body corporate shall not be appointed to hold office as the secretary, assistant, or deputy secretary of a company, or be authorised to act in that capacity. The Opposition welcomed those clauses as making it clear w’ho were the individuals responsible for the collapse of business enterprises, so that individuals could no longer hide behind the names of corporate bodies. Mr Muldoon said the most significant other amendments in the bill were over share premium accounts: the registration of trustees, executors and administrators of the estates of deceased people as the holders of shares in those estates; and the filing of annual returns, balance sheets and other documents. Clause 5 increases from $4OOO to $6OOO the limit at which the vesting of shares and debentures of a deceased person requires the production of probate or letters of administration.