WHAT IS A LEGAL MANAGER?

Nelson Evening Mail, Volume IV, Issue 270, 17 November 1869, Page 2

WHAT IS A LEGAL MANAGER?

Although we in Nelson are as yet totally inexperienced in the formation of Gold Miuiug Companies, we hope that ere many months are over we shall have passed through our novitiate, and shall be able to talk of shares, scrip, crushiugs and such like, as though we had been accustomed to deal with them all our lives. In the meantime, however, this kind of thing is quite new to us, and amon^ many other questions that we frequently heard asked upon the publication of the Prospectus of the Culliford Company was, " What is a legal manager ? We cannot answer this question more satisfactorily than by giving the following extract from the New Zealand Mining Journal. The term " Legal Manager" which has crept into use, as applied to the management of companies registered under the Mining Companies' Limited Liability Act, appears to lead to many misconceptions, and we devote ourselves to-day to setting clearly before the many thousand shareholders on this field and the public generally what are the real duties of the Manager, and what functions he is called upon and is in a position to perform. At the risk of being dry and somewhat prolix, we shall refer to, aud quote from, the Acts of 1865 and 1869, and in our analysis derived therefrom, display, we think satisfactorily, the fact, spirit, and inten-

tion of the legislation which created this office. la applying the principle of limited liability to companies formed for so, at the best, precarious an adventure as gold mining, it was necessary to hedge round the privilege with every possible precaution. The shareholders had to be protected, so to say, against themselves ; aud the outside public, so far as possible, against trusting overmuch to theoretical securities and opening their purses to the soft blandishments of speculative genius, without having the opportunity, with open eyes, of seeing facts for themselves. The greatest publicity and clearness ia the accounts of companies registered waa therefore made imperative ; as was also the keeping of such a register as should at any moment afford clear evidence as to the name and interest of every shareholder. To keep these aecoun.£s v ,3nd books is the principal duty of the.^Miinager. The sections referring thereto reads thus (Section v., Act of 1865): — The Manager of every Company registered under this Act shall keep or cause to be kept a book or books containing the names in full and residences of the shareholders, an account of the number of shares held by each of them, the said shareholders, and of the amount or amounts paid thereon, and every transfer of a share or parfe of a share, together with the names and residences of the transferees, and .*uchbookor books shall at all times be open free of charge for the inspection of creditors or shareholders. (Section xix., Act of 1865) : — The Manager of every Company registered under the provisions of this Act shall cause true accounts to be kept of the sum of money received and expended by the company, and the matter in respect of which such receipts and expenditure shall have taken place, and of the assets and liabilities of the Company. It is further enacted (Section xviii., Act of 1865) that the Manager shall publish in the New Zealand Gazette and the Gazette of the province, in the months of January and July, every year, " a full aud correct accouut of the assets and liabilities of the company," and (Section xiii., Act of 1869) "a true and faithful statement of the affairs " of the company iv a form appended in the Act. Any omission or neglect in these publications entails very heavy penalties upon the Manager personally (Section xiv., Act of 1869). Every company must have a registered office where the books and accounts may be at all reasonable times, i.c , during business hours, open for inspection, aud to which all communications are to be addressed ; hence another clearly defined duty of the Manager is to be present during those hours, either by himself or his clerk, at the service of any person entitled by law to examine into the affairs of the company ; and further, to receive calls, enter transfers, and keep the compauy carefully within the four corners of the Act. We exhaust the strictly defined functions of the Manager when we add that the law provides (Section vii., Act of 1865) that the company shall sue and be sued in his name, and that notices of extraordinary meetings shall be signed by him. With regard to carrying out the details of his doty there is uo doubt that the Manager is bound to follow the instructions of the directors, in whom vests the power of "carrying on aud transacting the business of the company," and who have "the custody of the common seal," the affixing of which is necessary to every document (Section xxvii., Act of 1865), and who also cleaily regulate for themselves the manner in which they may wish the books to be kept and the office business transacted. The Manager is practically the Secretary of the Board, although by the Acts made personally responsible for correct publication of accounts. A complete safeguard is thus laised by legislation against the possible existence of a pliant secretary in the hands of an unscrupulous Board ; somewhat marred, however, by the power given by the late Act (1869) to the directors to dismiss and change the Manager without referring to the company. We have endeavored thus to state clearly the whole duties of a 'Manager, as defined and intended by the law, and we will now briefly express our opinion as to matters which we differ apparently with many persons in considering do not by any means lie within his functions. The " Manager" has nothing whatever to do with the management of the mine, or with the conduct of the affairs of the company. These duties appertain to the directors, and to them alone. He is not a mining surveyor or reporter, nor is he necessarily qualified for either. He is not conse-

quently to-be considered responsible for blundering work, nor expected personally or by deputy to puff the compauy's ground with a view to the exultation of scrip! He is not the company's banker, ready at all times with overdrafts to meet wages ; aud the proper object of abuse when defaulting shareholders iguore their calls ! He is not the company's legal adviser, to take responsibility of proceedings involving large interests, or of incurring heavy fines for infringing upon the privileges of the legal profession by taking upon himself to draft deeds and assignments! If the principle of every man in his place was better understood in Limited Liability Companies, the Managers would be free from much undeserved ceusure, and the saddle would be put upon the right horse — in nine cases out of ten — the Directors.