PROVISIONS OF MEASURE

Evening Star, Issue 21545, 18 October 1933, Page 3

PROVISIONS OF MEASURE

STRICTURES ON SHARE CANVASSING INCORPORATION OUTSIDE DOMINION The practice commonly known as “ sharehawking ” is severely dealt with by the Bill, which proposes straightout prohibition of house-to-house canvassing of company shares and debentures. The Bill makes it clear that the terra house shall not include an office used for business purposes. With respect to the offering for sale or subscription of shares of companies incorporated outside New Zealand, another clause enumerates the particulars which must accompany the offer. These include - full details of the authorised share capital and voting rights, dividends paid within the previous three years, outstanding debentures, and whether or not the shares are fully paid up and arc quoted by recognised stock exchanges in New Zealand or elsewhere, or the reason why they are not. The actual circulation in New Zealand of prospectuses issued by oversea companies is also dealt with. An essential preliminary is the deposit with the registrar of companies in New Zealand a copy of the prospectus, certified by the chairman and two other directors, and the prospectus must contain tho particulars required in the issue of a dominion prospectus, described elsewhere.

Interesting provision is made respecting companies incorporated outside New Zealand and carrying on business within the dominion. They must make out balance-sheets at intervals not exceeding fifteen months, and deliver them to the registrar; also they must keep at the principal New Zealand office hooks of accounts showing all receipts and expenditure, sales and purchases, assets and liabilities in relation to their New Zealand business. The fact that the company is incorporated overseas must be disclosed on all official documents. Failure to comply with these and other requirements renders offenders liable to a fine up to £SO, or in case of continuing the offence £5 a day. A new feature of the legislation is a clause in the Bill prohibiting a company from assisting a subscriber in the purchase of its shares. Another new feature is an authorisation of the issue of redeemable preference shares repayable only out of the profits of the company, and power to issue shares at a discount, subject to resolution of a general meeting of the company, sanctioned by the court. Following the Imperial Act, the maximum commission on the sale of shares will be 10 per cent., and balancesheets must disclose tho commissions and discounts.

A, complete section of tho Bill is devoted to private companies. A new provision is that the Articles of Association must be registered within sis months of tho passing of tho Act, and membership is limited to twenty-five.