COMPANY LAW

Hokitika Guardian, 15 January 1935, Page 2

COMPANY LAW

NtS.W. REVISION

SOME STRICT PROVISIONS. SYDNEY. January 6. I New South Wales Ministries have for many years talked about amending the companies law. On all sides it is admitted that the law is so obsolete in many of its provisions that, the proverbial* hnrso and cart can be driven through it. but to change it has been so arduous a task that Ministers of Justice have shirked the job. Tb" present Minister (Air L. 0. Marti"! ’"'s t>ken un the burden, and in the last week before the Christm's recess of Parliament he introduced a measure which had Units object a complete revision aid the modernis'tion of the Companies Act. Its policy comes u"d:;r thr-'° main lrnds: (1) to provide a code under which companies may be formed .worked and wound rp: \2) to prevent the dishonest cxoloitn t"on of the investing public: and “A to follo'v the English code as far : s possible, incorporating also ’wrvp-pns wMch have been found satisfactory in other Dominions a”d States, as well ag in New South AYales.

NO SHAPE-HAWKING. Prastie and entirely now restrictions of the sale of company shares to the public are proposed in the bill. Tt contains a: straighont prohibition of hawking from house to house shares for subscription or purchase. If shares are offered in writing (except to agents) the offer must

be accompanied by a written statement containing full particulars. Penalties for breaches of this section are as high as £SOO and 12 months’ imprisonment. AY hero the offence is committed by a company, every director and officer concerned in its management will be deemed guilty unless he prove s that the offence took place without his knowledge The bill "ill prohibit the •circulation m tho State of any prospectus of a company 'incorporated outside the State unless the prospectus has lirse been do Si vcmed tfofi registration to the Registrar-General; the prospectus must state this fact The Minister will have power to appoint Inspectors to investigate the affair s of a company on an application of fixed proportions of the shareholders, who must, however, provide reasons for the application. These inspectors may demand all hooks and examine on oath officers and agents of a company, and the •Minister shall institute proceedings if the inspection warrants such action.

Every prospectus must bo dated and registered with the Repistrur-Geneial. Every director at the time of the issue of the prospectus, and every person who -ha s agreed to become a. director, will be liable to compensate all persons who subscribe for shares or debentures on the faith of the prospectus for loss or damage sustained bv reason of any untrue statement in the prospectus.