THE COMPANIES ACT

Otago Daily Times, Issue 22366, 13 September 1934, Page 7

THE COMPANIES ACT

DUTIES OF SECRETARIES A TASK FOR THE EXPERT The fact that the new Companies Act has greatly increased the responsibilities of company secretaries and calls for the greatest care on their part was well brought home to a combined meeting of members of the local branch of the New Zealand Accountants’ Society and the Otago University Commerce Ex-Students’ Society, which was addressed in the University Club last night by Mr J. M. Paterson. . At the outset of hi* remarks Mr Paterson said that there was nothing to compel any company to have a secretary, but in practically every company there was some person who had to attend to the many duties required by the Act. The secretary had no authority to bind a company by contract. The company was not liable for share certificates that might be forged by its secretary, but it might be liable for fraud by him. On the other hand the secretary, whien signing bills or cheques, must be careful that the company’s name was correctly stated, otherwise he ran the risk of being personally liable. For the purpose of default fines he was an officer of the company, but if the directors misappropriated the company’s funds the secretary was not liable with them, although he might know all about it. Generally speaking, if he acted under the orders of the directors he was not liable for their acts. He must be careful, however, that he was not guilty of the act of conspiring with the directors in any wrongful act, and the best plan would be to get out quickly if there was any “ funny business.” If he issued * statement knowing it to be false he was liable to two years’ imprisonment. While the secretary might be merely a glorified office boy, he might also be almost the company itself. The “bad old days” when the young lady who made the morning tea and answered the telephone was appointed secretary were now over, and what had previously been in many cases a nominal position now required a very alert brain. The list of documents which the secretary now had to keep in mind, the lecturer added, was formidable, and the very infrequency with which certain duties required to be carried out might well trap him. Mr Paterson then went on to refer iu detail to duties which the secretary was required to perform, enumerating the penalties to which he was liable in the case of default. He referred in detail to the responsibilities of companies in registering charges, and went on to state that the annual return must be supplied within a month of the annual meeting. A copy must also be placed in the share register. It was now required that minutes must be kept not only of general meetings, but of all directors’ meetings. He had noticed some criticism of the fact that shareholders did not have the right to inspect the minutes of meetings of directors, but to him this seemed reasonable, for to allow members to “ butt in ” to minutes of current proceedings of directors would be little less than an intolerable burden. . Another provision of the new Act was that every member, and also holders of debentures were entitled to copies of the balance sheet, and secretaries should be eareful to see that a copy of the balance sheet was sent to every person who was entitled to receive notice of annual general meetings. Mr Paterson covered new provisions that applied to mining companies and also pointed out that it was an offence to increase the number of members of a private company beyond 25. Private companies, lie- added, now had to file annual returns. In conclusion, -he advised secretaries to keep something in the nature of a calendar to remind them of their duties. The day of the amateur secretary was past, and many ticklish points had to be watched. He felt sure that compaity directors would_ see the benefits to be gained by obtaining the most competent people to carry out the duties which the Act required. Mr Paterson answered several questions, and at the conclusion of his remarks was accorded a vote of thank*.