COMPANIES BILL

Northern Advocate, 18 October 1933, Page 8

COMPANIES BILL

UNITED KINGDOM FOLLOWED. MEASURE READ A FIRST TIME. MIX IST E RIA L STATE M EXT. (Per Press Association. —Copyright.) WELLIXGTOX, This Day. The Companies Bill was introduced by Governor-General's message in the House ot Representatives last evening, and read a first time.

The Leader of the Opposition, Mr M. J. Savage, asked whether the bill would be, referred to a Parliamentary Committee, so that companies and others would have an opportunity to present their case. The Rt. Hon. J. G. Coates, Minister of Finance, said he was not in favour of referring the hill to a Parliamentary Committee. The Committee of the "Whole House would no doubt go very closely into each clause. The bill was the result of some three years of study by' a committee set up -by the late Sir Thomas Side)", and consisting of lawyers, accountants, auditors, company' secretaries and company’’ lawyers. If it wore referred to a committee of the House, it might be another two or three years before it was possible to pass it into law.

Continuing:, Mr 'Coates said that the bill was as nearly as possible an adaptation of New Zealand company law to that of the United Kingdom. The. opinions of departments of State had been sought and expressed on the subjects. The bill also dealt with some matters that had not been considered by the committee. These included restrictions on whst was commonly known as “share hawking.” The Minister pointed out that the bill had been based on the Imperial Companies Act, and some notice had. also been taken of the Queensland Act, and other contemplated amendments in Australia. The Minister road to the House a brief report submitted by the committee which had framed the legislation. The report stated that the committee' had endeavoured to follow the Imperial Act as closely as circumstances would permit. The committee had also com sidered many suggested departures from principles of company law, which, although they seemed advantageous, might have been dangerous as alterations, and, if adopted, might have been followed by unexpected effects and undesired consequences. <• One important departure had been made from the existing law and the practice both in New Zealand and England regarding provisions for the registration of debentures. “In England,’' the report stated, “the pinctice is ’to file notice of particulars of the debentures. In Now Zealand, a copy of the instrument creating the charge is registered, and, as doubts have been raised whether this registration was or was not. a notice of the contents of the instrument, it was decided to make a do/ini to recommendation that the registration ot a copy of an instrument should he notice of the contents of a document to all persons having dealings with the properly charge. The committee realises the difficulty of the subject, and that some unforeseen difficulty and consequences may arise.” The committee had not considered any recommendations as to winding-up itiles, which it considered was a most important part ot the law of companies. The absence of such rules was a serious defect, and the committee trusted that winding-up rules would be issued at the earliest possible date.

it was emphasised by the committee that the lull ’did not alter the general principles pertaining to private, companies, bill some .additional provisions had been included imposing on them the necessity of disclosing more information material to shareholders and creditors.

The prohibition of house-to-house canvassing for the sale of shares was consideied to be a desirable amendment. The committee believed Dial the bill, as now drafted, would give greater protection 1 o .shareholders and creditors, and further protect the public in the matter of new flotations.

In unanimously recommending that the bill be passed this session, the committees, although holding differences o r opinion on some details of Ihe legislation, expressed the opinion Hint the measure in its present form was a very great advance in company law in New Zealand.

_ ( '°a)es expressed his appreeia lion of the work done by the commit I c o.

Mr W. L. Barnard (Labour, Napier, suggested that 11,ft Minister should volar tlio liill to 1 hr* Statutes Revision (oinmittoo, which would not lake two years to deal with it. He believed U,p committee would merely fasten on to those aspects which involved anv eliaii:{e. Ife imagined the w<.rk would be completed in, say, a week. -Mr IT. (i. Tb Mason (Labour, AnckInnd Suburbs') expressed disappoinlmi'nt that the bill contained no clauses to “dear up the mesa about windingup companies, Ife said the law on (his subject was (he mos( anlbjualrd and most hopeless pat ( of New Zealand company law.