COMPANY. LAW

Evening Post, Volume CXIV, Issue 1, 1 July 1932, Page 9

COMPANY. LAW

PREPARING... PROSPECTUSES

.'' There are going to be great - opportunities for the men, bo they secretaries or solicitors, who -will specialise in company law," said' Mr. F. H.. Bass, F.A.I.S.,■F.P.A. (N.Z.), in addressing the "Wellington branch, of the Australasian Institute of Secretaries upon "Prospectuses" in-the Dominion Farmers'; Institute. '•■ The president/ Mr.' C. S. Falconer presided. "Owing to the largo number of businesses which have gone under owing'to the prevailing depression," continued Mr. Bass, "there will bo plenty of work ahead in re-establishing these ventures, arid .ill of them will be re-formed as limited liability companies, as the day of the private trader.and partnerships has passed for ever." Mr. Bass mentioned that the new Companies Act, which was being promoted would tighten up the pains and penalties directors wero liablo for, and capable company secretaries would be invaluable i.v seeing that prospectuses were issued according to-law,, and that companies conducted their business according to statute. "At the same time," ho said, "earo should be taken to .see: that, in removing abuses, the- new Act is not made so strict as to frighten pcoplo from forming companies." In instancing tho caro which should be exercised in issuing prospectuses, Mr. Bass referred to the conviction of Lord Kylsant, chairman o£ a largo shipping combino in England, who whs convicted for the offence of publishing' a falsa statement in .a prospectus inviting subscriptions I o a debenture issue in the Royal Mail Steam Packet Company. A statement in this prospectus purported to give the result, of ten years' operations of the company, but an average result only had been given, whereas liad" a full disclosure been made tho investors would have seen that tho company had enjoyed three good years at the beginning of "tlie' ten-year period, followed by seven years in which trading losses had been sustained. In reply to a question, Mr. Bass said there had been very few instances of fraud or deceit in connection with tho issue of prospectuses for new companies in New Zealand. A vote of thanks to Mr. Bass was carried, on tho motion of Mr. W. 1\ Morrison, F.1.A.5., hon. secretary of the local branch.