NEW COMPANY LAW

New Zealand Herald, Volume LXXI, Issue 21807, 23 May 1934, Page 7

NEW COMPANY LAW

EFFECT ALREADY SEEN STYLE OF BALANCE-SHEETS HOLDING IN SUBSIDIARIES Although the Companies Act, 1933, has been in operation only about two months, it has already involved a considerable amount of extra work in some offices in conforming with tho new requirements. Tho effect of some, but not all, of the new provisions is apparent to tho general public. The most striking outward change is the 'form in which balance-sheets aro now being presented. Under the 190S Act, the various liabilities and assets could bo so grouped that in extreme cases only a few items appeared, lieservos could be hidden and a liberal regard for the items "sundry debtors" and "sundry creditors" allowed the use of theso for concealing the nature of debts or assets. If it was so desired, a balance-sheet could be made practically worthless as a "guide to tho financial position of a company. The 1933 Act makes fairly complete provision for the contents of a balancesheet. Fixed assets require an explanation how thoy are arrived at, and it is now usual to see in balance-sheets assets stated at cost or less so much depreciation. Tho general nature of other assets is required to be stated and, in order to conform with the Act, shares in and loans due by subsidiaries have been shown separately in recent accounts.

The Act also requires a presentation of the general nature of liabilities and which aro secured. Indebtedness to'subsidiaries requires specific statement. The commercial documents of many firms now appear with the rubberstamping "incorporated in . . This is a new provision affecting all overseas companies. On the last day of the operation of the 1908 Act, registration of new companies at the Auckland companies' olfico was exceptionally brisk. However, since April 1 thero havo been no new registrations of public companies at Auckland. A provision in tho now Act which will tend to restrain excessive flotations is that requiring- that 60 per cent of the least amount of capital necessary to justify a public company commencing business must bo obtained within such time as will enablo tho company to be registered and the shares to be allotted not later than four months after the date of filing tho prospectus. A further reason advanced for tho activity prior to April 1 is that the new Act has gone further in restricting the uso of certain words in the names of companies. Inquiries show that tho section of the 1933 Act dealing with subsidiary companies has been responsible for careful thought in some directions. Particulars asfH> holdings in subsidiary companies must now bo shown by public companies, although it is not necessary to disclose names. This provision has some bearing on cases of inter-locking companies, where control of the business even of apparent competitors has been secured. Whero tho fact of extension outside lias not previously been disclosed, tho' general statements now required under tho Act may give -rise to inquiry by shareholders for particulars.

Various other matters arising from the Act aro now engaging the attention of company secx-etaries. Included among these are the additional particulars required from private companies, such as an annual summary, and the registration by all companies within six months of certain charges upon their assets.

FINANCE LOAN COMPANY REDUCTION OF LIABILITIES The annual meeting of the Reliance Loan, Mortgage and Discount Corporation, Limited, was held yesterday, Mr. \V. C. Whitney, chairman of directors, presiding. Details of the company's operations for the last two years and a-lialf were submitted to the meeting, in addition to a report from the managing director. It was shown that very substantial liabilities had been paid to creditors, while, taking into consideration the limited funds available fcv reinvestment, tho return was satisfactory to shareholders.

A resolution was passed empowering the directors to consider ways and means of further reducing liabilities both to depositors and on bearer debentures to the bank. In this the directors will confer with a committee appointed by tho shareholders. With tho exception of Mr. Whitney, who will be abroad during the coming year and did not seek re-election, all the retiring directors were re-elected. A vote of thanks was also recorded to tho directors for the efforts made to reduce tho company's liabilities.

WEIGHT OF WHEAT

QUESTION OF REDUCTION

Tho need for the immediate and favourable consideration of a reduction of the standard weight of wheat this year was impressed on a representative of the Timaru Herald when opinions were sought on the recent motion passed by the Timaru Agricultural and Pastoral Association: "That the Wheat -Purchase Board be asked to endeavour to have the standard weight of wheat reduced this year, and that other agricultural and pastoral associations and branches of the Farmers' Union bo asked to give their support." It was pointed out by farmers and others interested that the season in South Canterbury this year had -been abnormal, and that if the wheat standard for supplies going into store was to be maintained at 611b., and wheat under that standard would not bo taken into store as milling quality, tho position would, so far as growers wero concerned, be very serious. "Tho mills are at present full up, and 75 per cent ol' the wheat remaining will not come up to milling standard," was how one merchant described tho position. It would present no end of difficulty if all that wheat was thrown on to a fowl wheat market when ordinarily it was difficult to secure 2s 9d a bushel on trucks for fowl wheat. He said he was sure that the Wheat Purchase Board would havo to do something in the matter. CALL AND DIVIDEND LIST Dividends— ,P ue Northern Investment —final, 4 p.o. May 23 Wes'iport Coal— int., f>d a share May 29 Nat. Bank A'asia— final. 21 p.c . . May 30 Bank New South Wales—quarterly. 5s a share ... . . . . May 30 Farmers' Trading—ftial. prcf., 7 p.c. p.a. (less 20 p.ct) . . .. Mny 31 Burns Pnilp—final. 5 p.c.. . . .. May Tooth's Brewery—int., 4 J p.c. . . May Dominion Fart.—3 p.c June 1 Perpetual Forests—B p.c. . . .. Juno 1 \ Henry Jones —int., 6d a share . . Juno 1 Wilsons Cement—final, 6d a share Juno 6 \Vaihi Junction —Id a share .. June 8 Bank New Zealand—final, 5 p.c.; D prof., 35 p.c. . . .... June 15 Broken Hill South—la 6d a share June 15 Australian Glass—final, pref., 4J p.c.; ord., 5 p.c June 27 Morris Hedstrom —final, 2 p.c. . . June 30 N.Z. Breweries—final. 31 p.c. • « July Colls— „ , _ Reserve Bank N.Z. —£2 a shore June J