LOOSE-LEAF MINUTES

Evening Star, Issue 22248, 28 January 1936, Page 6

LOOSE-LEAF MINUTES

IMPORTANT ENGLISH DECISION ‘ Legal Aspect of Loose-leaf Minute Books,’ is the\subject of an important article in the New Zealand ‘ Accountants’ JourneL’ “While section 129 of the Companies Act, 1933, provides that every company shall cause minutes of all proceedings of general meetings, and, where there are directors or managers, of all proceedings at meetings of its directors or of its managers, to be entered in books kept for that purpose, a practice has grown np of keeping minutes on the loose-leaf system,” the writer remarks. “ One advantage, of course, is that it enables the minutes to be typed so that several copies can he made simultaneously for circulation amongst the directors. “It has. been commonly supposed that if a loose-leaf system is adopted, and proper precautions taken of numbering each sheet, each individual sheet to be afterwards initialled by the chairman, this would meet the requirements of the Act. Members of the accountancy profession, however, will be surprised at a recent decision given in Great Britain. It has just been held by Mr Justice Bennett in_ the Hearts of Oak insurance case, that a loose-leaf minute book is not a minute book for the purpose of the Companies Act, and he rejected it as evidence. • “It would appear that the learned judge holds that a loose-leaf book is not a ‘ bookJ at all since it is merely a collection of sheets fastened in such a way that one sheet can be taken out and another substituted. He has held that a_ book, on the other hand, is something which is . sewn or pasted together, and which cannot readily be tampered with by any dishonest person. “ For the purpose of the Companies Act there is no definition of the word ‘ book,’ but one would have thought that the Legislature must be presumed by now to have envisaged the modern loose-leaf system of keeping records, and the possibility that minute books as well might be kept in this manner. If it had been intended to express disapproval of the practice ample opportunity was afforded when framing the Companies Act, 1929, in England, and in recasting the law on the subject in this Dominion in 1933.

“ A practice in the case of some companies is to have the minutes typed on loose sheets, and for the sheets to be pasted into a guard book, the pages of which are consecutively numbered. The system has much the same advantage as the loose-leaf method, but in order to safeguard the records it is suggested that each sheet should be signed or initialled by the chairman, and it is a good plan to have the signatures partly on the minute sheet and partly on the sheet on which it is pasted. It is probable that the courts would look more favourably on the records being kept in a guard book on the lines suggested than would be the case if the sheets were simply in loose form.”