NO LIABILITY AND LIMITED LIABILITY.

Evening Post, Volume LXXVI, Issue 73, 23 September 1908, Page 4

NO LIABILITY AND LIMITED LIABILITY.

[BT TELEGEAPH. — PBESS ASSOCIATION.] AUCKLAND, 22nd September. Speaking at, a meeting of the shareholders of the Waitangi Gold Mining Company to-day, the chairman of directors (Mr. Chas. Hudson) referred in very plain -terms to what he contended were the evils of the system of no-liability mining companies. He said the "no liability" company seemed more adapted) to new and untried ventures, in which] investors did not wish to incur the slightest risk of any expenditure other than their original outlay, and to leave themselves perfectly free to throw up their shares at any time they wished. For the purposes oi the speculator, pure and simple, there %vas much to be said for the no-liability system, but any genuine investor might urge that thisdisadvantage might arise — he might in all good faith pay his calls only to find that others had not had such faith in the company, and had forfeited their shares. These investor rnfeht also be disappointed to learn that the mine had collapsed, and be indignant with the directors for having abandoned an enterprise at an early stage as^ hopeless without calling on the shareholders for support, when the directors would have had no option in the matter, as they would be personally liable for any expenditure over and above that which could be defrayed irom the funds in hand. From the company's standpoint (said Mr. Hudson) there was no doubt that the status of a limited liability company was infinitely better than that of a no-liability one. The directors were in a "position to enter upon contracts and to make engagements that would bo im•possible for a company of the latter description. For instance, a deep level scheme was now contemplated iD the Thames, and ono of « the companies interested was a no-liability one, and it would be necessary for them to guarantee the payment of a certain sum of money. They found it impossible, and they were now considering changing to a limited liability company to give them the desired power. The liability assumed by shareholders under a limited ' liability company was practically confined to a liability to pay ; two calls. If any shareholder refused to pay a call hia shares went to forfeiture, and it was possible that another call might be made before, the matter-was settled, for which ho would also be liable.