COMPANY SHARES FOR FRUITGROWERS

North Canterbury Gazette, Volume 6, Issue 66, 9 April 1937, Page 5

COMPANY SHARES FOR FRUITGROWERS

Anomaly in Association Constitution PECULIAR POSITION OF LOBURN MEMBERS An old constitution, still in force, creates an unusual position in the Loburn Fruitgrowers’ Association. Drafted originally to provide for the possibility that the Association might become a trading organisation, the existing constitution makes it necessary for new members to pay a 2/share levy.

The Association was registered as “limited” so that, in the events of its becoming a trading company, individual members would not be responsible for liabilities.

Now all thought of trading has been abandoned, since the Fruitgrowers’ Federation provides an organisation for trading which meets the requirements of most growers or their subsidiary organisations. In short, the Loburn Association has become a purely benefit organihation, and is never likely to assume the functions of a company. But the old constitution still provides for the possibility and the share levy is still payable by all new members. This constitution holds until it is revised, although in this respect particularly it differs from the standard constitution framed by the Federation.

Another unusual feature of the position is that no shareholders’ register exists or has been kept. No refunds have been claimed by or paid to transferred, dead, or lost members. No dividends have been paid or are ever likely to be paid and, in fact, the money paid as shares is lost in the coffers of the Association’s general fund.

AVheri the constitution is revised an interesting point will arise: by changing the constitution the Association will, in effect, be winding up an organisation created by this payment of share capital. No share certificates have been issued, and the amount paid has been small, but it is possible that any shareholder who wished could raise •a legal point about the Association’s liability for the amounts paid in. Unfortunately, cash balances are never sufficient to meet the amount of share capital received.