LOOSELEAF MINUTES.

Gisborne Times, Volume LXXXIV, Issue 12769, 27 January 1936, Page 2

LOOSELEAF MINUTES.

IMPORTANT ENGLISH DECISION

“Legal Aspect of Loose-leaf Minute Books” is the -subject of an important article in the New Zealand “Accountants' Journal." .

“While Section 120 of the Companies Act, 1933, provides that every company shall cause , minutes of all pioceedings 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 up 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 be 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 bo afterwards initialled h.v 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 Rennett in the Hearts ot Oak- Insurance case, that a loose-leaf minute hook is not a. minute book for the purpose of (lie Companies Act, and he rejected it as evidence.

“It would appear that the learned Judge holds that a loose-leaf book is not a. ‘book’ 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 hold 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.

. “lor tlie purpose ot the Companies Act there is no definition of the word ‘book,’ but one would have thought that the legislature must he 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 aflorded when framing the Companies Act. 1929. in England, and in ro-cast-ing 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 hook, the pages of which are consecutively numbered. The system lias much the same advantage as the loose-leaf method, but in order to safeguard the records it is suggested that each sheet should he 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 favorably on the records being kept in a guard hook on the lines suggested, than would he the case if the sheets were simply in loose form.”